PDA

View Full Version : [NEWS] Corvette Wheel Maker Files For Bankruptcy



Rob
12-06-05, 10:47 AM
<img src="/images/design/front/c6wheel.jpg" width="175" height="175" border="1" alt="C6 Corvette Wheel" align="right" hspace="5" vspace="5" />Corvette wheel maker files for bankruptcy

By Robert Sherefkin
Automotive News / December 02, 2005

DETROIT --Amcast Industrial Corp. has filed for Chapter 11 bankruptcy court protection -- just three months after emerging from a previous Chapter 11 filing, according to court documents.

The Freemont, Ind., supplier of light vehicle aluminum wheels to General Motors listed assets of $81.6 million and debts of $80.2 million, according to documents filed in U.S. Bankruptcy Court for the Southern District of Indiana in Indianapolis.

About 80 percent of the company's revenue comes from GM. According to the documents, GM's auditors confirmed that the company loses significant money on each of the Corvette wheels manufactured and sold.

"All previous attempts to renegotiate contractual pricing to an acceptable level of profitability have been denied," according to Amcast's filing.

The company employs 727 people.

The largest trade creditor in the case is Zhejiang Wanfeng Auto Wheel Co. Ltd. of Southfield, Mich. It is owed $989,380.

You may e-mail Robert Sherefkin at rsherefkin@crain.com
<!-- / message -->

Rob
12-06-05, 10:48 AM
Amcast re-files for bankruptcy
Officials: Chapter 11 caused by loss of GM work
BY RACHEL KIPP
rlkipp@marion.gannett.com


GAS CITY - Amcast Industrial Corp. has filed for bankruptcy for the second time in a year, citing a loss of business from General Motors, its biggest source of revenue. The emergency petition filed Thursday in U.S. Bankruptcy Court in Indianapolis, raises questions about the future of the local plant, which employs about 200 people.

The expectation of new and continued business from GM, the source of about 80 percent of Amcast's revenue, was a key part of a reorganization that allowed the aluminum wheel manufacturer to emerge from its first Chapter 11 bankruptcy last summer, according to court documents.

"Neither of those assumptions has proven to be true," Amcast officials said in court documents. "Not only has GM cut back on existing programs in some areas, but has also told Amcast that no new business would be given to Amcast and existing programs would be migrated away from Amcast in the coming months."

The bankruptcy filing allows Amcast to continue doing business while resolving its issues with GM, company officials said in a news release.

"In the meantime, employees will be paid their normal wages and bonuses and all benefit programs will continue uninterrupted," said Richard A. Lindenmuth, Amcast interim chief executive officer. "We have funding arrangements in place with our existing lenders to continue operations during the bankruptcy case. We hope to conclude the process as promptly as possible."

Employees at Amcast's Gas City plant contacted by the Chronicle-Tribunesaid they could not comment on the bankruptcy filing.

When contacted about the filing, Mark Sullivan, president of the Gas City Area Chamber of Commerce, said he hoped the company would emerge intact.

"I think that with the technology, and I've been in there enough to know, that those (workers) seem to be on top of their stuff," Sullivan said. "Somewhere the American automakers are going to rebound, and if not, I'm sure they'll find foreign markets or specialty markets."

In an attempt to restore its profitability, GM recently announced it would cease production at 12 plants within the next two years and eliminate 30,000 jobs. Friday, GM spokesman Tom Hill said company officials were aware of Amcast's bankruptcy filing, but would not comment on any loss of business.

"As a policy we don't comment on contracts with any suppliers," Hill said. "I can tell you that Amcast is a GM supplier and we are aware they filed for bankruptcy."

In addition to losing business from GM, Amcast also is losing money each time it makes and sells a Corvette wheel to the automaker, court documents said. The documents said attempts by Amcast to renegotiate contractual pricing of the wheels have been unsuccessful.

Amcast, which was founded in Dayton, Ohio, in 1866, manufactures aluminum wheels for cars and trucks and aluminum casting used with automobile suspensions, brake systems and steering knuckles.

The company, now based in the northern Indiana town of Fremont, has about 727 employees at facilities in Fremont, Franklin and Gas City. The Gas City location opened in the early 1990s.

Nov. 30, 2004, the company initially filed for Chapter 11 bankruptcy, which typically results in companies either restructuring debt or seeking a buyer for the business. In the case of Amcast, post-filing efforts focused primarily on selling unprofitable businesses and restructuring debt through a reorganization plan.

In the new filing, Amcast estimates having 1,000 to 5,000 creditors, assets of more than $81 million and debts of about $80 million, court documents said.

With GM, the world's largest automaker, struggling with financial problems, suppliers like Amcast will naturally be affected, said Patrick Barkey, director of the Bureau of Business Research at Ball State University.

"GM has, for one thing, slowed down their payments to suppliers. Also, and the suppliers know this better than anyone else, they've - to the extent that they can within the scope of their contract - they've shall we say pushed inventory toward suppliers," Barkey said. "They're doing it to try to help straighten out their financial situation and it's a case of it doesn't leave the suppliers with many alternatives."

Amcast spokesman Joe McDonagh would not comment on any delaying of payments by GM.

Hill said General Motors is continuing to award contracts to suppliers and to source for new products, but that suppliers are always subject to consumer demand for cars and trucks.

"Any time you're a supplier, you're impacted by production," he said. "So as production goes up or down, you're going to be making less of your components for an automaker or more if demand goes up."

Originally published December 3, 2005

koolaid117
12-06-05, 10:59 AM
BY RACHEL KIPP
rlkipp@marion.gannett.com

In addition to losing business from GM, Amcast also is losing money each time it makes and sells a Corvette wheel to the automaker, court documents said. The documents said attempts by Amcast to renegotiate contractual pricing of the wheels have been unsuccessful.



How nice of GM. Now what will they do? Since they are going to lay off 3000 employees, maybe they will just buy Amcast and make their own wheels? Rrrriiight!

Jim

warren s
12-06-05, 08:46 PM
Looks like the cost of stock replacement rims for C6 is about to go way up. (Even if the clear coat starts to peel)

Dakota kid
12-06-05, 08:54 PM
So thast the reason why the c-6 wheels have so much problems.

B17Crew
12-07-05, 11:01 AM
No denying that the numbers quoted in that article look pretty grim, itís a shame.

B17Crew
:w

wx briefer
12-10-05, 02:12 PM
It was my understanding that the wheels were made in Mexico. Did the supplier change this year? Perhaps the castings were made in mexico and finished in Indiana? I am confused....

Norseman
03-10-06, 10:47 AM
So thast the reason why the c-6 wheels have so much problems.
It's many not much.;)

Rat Race
09-27-06, 07:13 PM
My rear wheels are polished good, my fronts are a hair milky. Can I have them chromed?