Key Plastics, Special Devices Fall Victim to Automaker Woes

Weak auto demand is taking an increasing toll on the supplychain, even in advance of a potential bankruptcy or bailout for the Big Three.

SpecialDevices Inc. of Moorpark, CAand Key Plastics LLC of Northville, MIboth filed for bankruptcy protection on Dec. 15.

"Over the past 24 months we have made significant progresstransitioning SDI into a global leader in the design and manufacture ofprecision engineered, mission critical pyrotechnic devices," says ChristopherHunter, CEO of Special Devices Inc. "Unfortunately, at the same time, factorsbeyond our control have resulted in afinancial tsunami â€“ a significant decline in automotive-related revenueand a tough global economy coupled with a credit crisis that makes it extremelydifficult to support our debt structure."

The restructuring is aimed at SDI's capital structure andnot its operations. The company will continue to supply pyrotechnic productsfor automotive occupant protection systems.

Key Plastics, a  manufacturerof engineered plastic components for the global automotive industry, filed avoluntary Chapter 11 petition, accompanied by a prepackaged plan ofreorganization, seeking to reorganize in the United States Bankruptcy Court forthe District of Delaware.

"This process will give Key Plastics one of the strongestfinancial profiles in the industry, and allow us to persevere through thecurrent industry environment," says Ralph Ralston, president of the company'sNorth American operations.

Key Plastics is seeking approval of motions that will allowit to continue to manage operations. The motions include requests to make wageand salary payments and other benefits to employees and to pay suppliers. KeyPlastics 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 MaeAutomotive USA, with more than $1.3 million owed to each according to thebankruptcy petition.