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.
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 â 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