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Key Plastics, Special Devices Fall Victim to Automaker Woes
Two-tier three suppliers seek to reorganize their capital structure
Doug Smock, Contributing Editor -- Design News, December 16, 2008
Weak auto demand is taking an increasing toll on the supply chain, even in advance of a potential bankruptcy or bailout for the Big Three.
Special Devices Inc. of Moorpark, CA and Key Plastics LLC of Northville, MI both filed for bankruptcy protection on Dec. 15.
"Over the past 24 months we have made significant progress transitioning SDI into a global leader in the design and manufacture of precision engineered, mission critical pyrotechnic devices," says Christopher Hunter, CEO of Special Devices Inc. "Unfortunately, at the same time, factors beyond our control have resulted in a financial tsunami – a significant decline in automotive-related revenue and a tough global economy coupled with a credit crisis that makes it extremely difficult to support our debt structure."
The restructuring is aimed at SDI's capital structure and not its operations. The company will continue to supply pyrotechnic products for automotive occupant protection systems.
Key Plastics, a manufacturer of engineered plastic components for the global automotive industry, filed a voluntary Chapter 11 petition, accompanied by a prepackaged plan of reorganization, seeking to reorganize in the United States Bankruptcy Court for the District of Delaware.
"This process will give Key Plastics one of the strongest financial profiles in the industry, and allow us to persevere through the current industry environment," says Ralph Ralston, president of the company's North American operations.
Key Plastics is seeking approval of motions that will allow it to continue to manage operations. The motions include requests to make wage and salary payments and other benefits to employees and to pay suppliers. Key Plastics employs approximately 5,000 personnel in North America, Europe and Asia. North American products include door handles, pressurized fluid reservoirs and other precision molded parts.
Its top unsecured creditors include BASF and Jing Mae Automotive USA, with more than $1.3 million owed to each according to the bankruptcy petition.
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The Big Three need to stop deflecting blame towards economic woes. They need to look at what they controlled internally not blame it on the economy. The economy is what finally broke the camels back.'>Supplier's that have bad reputations with Customers, Suppliers and even employement recruiters should not be classified as falling victim to current Automaker Woes. Deflecting blame does not excuse bad leadership nor does it allow for corrective action to begin. If they truly want to recover and be competitive, they need to hold their leadership accountable. If they cannot accept their short comings and go after root cause, their customers, Suppliers and potential employee candidates will never trust them again.
The Big Three need to stop deflecting blame towards economic woes. They need to look at what they controlled internally not blame it on the economy. The economy is what finally broke the camels back.
Displaced Worker - 2009-15-1 13:20:12 EST
