Tier-1 supplier Metaldyne files for Chapter 11 bankruptcy too
To the roll call of auto industry titans that have gone or are going bankrupt -- Visteon, Chrysler, GM, Saab, Karmann, ASC, Source Interlink -- we can now add Tier 1 supplier Metaldyne, which filed for bankruptcy for its American operations. Metaldyne makes metal bits for car and truck chassis and NVH components.The company has been restructuring its costs over the past year and a half, shedding $100 million in expenditures and reducing its debt. Still, as of the filing it had debt of $600 million on $2008 sales of $1.57 billion. Metaldyne's parent company, Asahi Tech Corp in Japan, helped the company lower its debt by about $400 million but has now walked away from further financial support.
There are two private equity firms interested in the company: Carlyle Group, which is looking to buy some of Metaldyne's chassis business, and RHJI, which is already a majority shareholder in Metaldyne's parent, Asahi. RHJI would throw about $100 million at the company and inject additional cash to run the business short term, as well as take on additional liabilities. Until (and if ever) a buyer is decided, Metaldyne is running on $18.5 million in debtor-in-possession financing from Deutsche Bank and customer funding.
[Source: Forbes]
Reader Comments (Page 1 of 1)
Sea Urchin 4:56PM (5/31/2009)
Mr. Ramsey, have you ever heard of a company called Raymond James? What about Duff & Phelps? Probably not. Well those are independent investment banks, they are the ones that survived the market that Bear Stearns and Merrill couldn't. Once the big boys of the investment world who made dumb investments died these guys came in and took the costumers, money and the spotlight. It's called capitalism.
If Metaldyne dies the market will win. Automakers will still need the products it produced. Some one will have to build them, automakers can simply ask other companies to start producing these products or ask a company that is currently not in auto business at all or ask a foreighn company to open up shop in USA and build these parts.
The fact that a poorly managed company died is not news, why do i say poorly managed? Do i know who its CEO is? No. Do i know if the CEO is from Harvard like "Red Ink" Rick Wagoner and Bush? No. But i do know that CEO is dumb enough to allow his company to remain in auto sector without diversifying into other industries knowing full well that automakers treat their suppliers like terrorists and would never attempt t to help them and that you as a CEO should make sure that a big chunk of money comes from a non auto sector.
This makes the management unqualified and weak, and that is why the company deserves to die.
End of story.
Let someone else come in and make money in Metaldyne's place. Auto supplying is not as advanced as say Aircraft building so government also should stay away.
Reply
Chris 6:03PM (5/31/2009)
Indeed. My company is a direct competitor to Metaldyne, and they have cut corners and lied about their capabilities (and products) for years. Metaldyne is a very poorly run company, and my company is more than happy to take up their market share. Just last month they underbid us on a contract with a price that was so staggeringly low that they must have been losing a significant amount of money just to secure the contract. They have been doing this for years, and up until now have been able to count on Japan to bail them out. Not anymore. Metaldyne has had this coming for years, and deserves to die a miserable death.
jpm100 10:47PM (5/31/2009)
Aside from some grandfathered exceptions, the International Banking Act limits what a foreign bank can do in the US without developing a presence here. When one institution fails, chances are extremely good business will be picked up across the street.
But even if it was lost, what about banking really requires something that can't be restored to something meaningful in a handful of months? Whereas, industrial infrastructures take decades to develop.
Equating the two just boggles.
jpm100 11:00PM (5/31/2009)
Aside from some grandfathered exceptions, the International Banking Act limits what a foreign bank can do in the US without developing a presence here. When one institution fails, chances are extremely good that the business will be picked up across the street.
Equating the two just boggles for more reasons than that.
jpm100 11:01PM (5/31/2009)
Lovin' AB's comment handling.