From Automotive News, a Crain publication
DETROIT, MICHIGAN-Collins & Aikman Corp. is evaluating whether it should close additional plants and shed more workers because of production cuts by 'Big Three' US car makers.
The firm has already sold its European operations to a group led by investor Wilbur Ross, and its management continues to talk with prospective buyers of the rest of the company, said spokesman David Youngman.
Ross has expressed an interest in C&A's North American operation as well.
The supplier of vehicle interiors is taking the steps as it prepares to emerge from Chapter 11 reorganisation, according to David Barkholz, with Automotive News, a sister magazine to Urethanes Technology.
The firm, based in Southfield, Michigan, is cutting about 125 salaried employees in its corporate offices and plastic-trim division. That's about 10 percent of its salaried workforce, said Youngman.
The firm has asked the US Bankruptcy Court in Detroit to approve a severance package for the workers that consists of four weeks' base salary and continued benefits for four weeks.
The job cuts would save C&A about $8 million a year, Youngman said.Ford Motor Co. plans to slash US vehicle production 21 percent in the fourth quarter, while General Motors Corp. and the Chrysler group are cutting production by more than 10 percent in the quarter.
Collins & Aikman is a key supplier to all three car makers, with its carpeting, trim or cockpits on virtually every vehicle model they produce.
The firm may close or consolidate more plants beyond the 42 either closed or sold since it entered Chapter 11 protection in May 2005.Those divestments-including the sale of its European operations to the Ross group-caused sales to drop from about $4000 million in 2004 to $2800 million in 2005.
Collins & Aikman now has 45 plants in North America and about 12 500 employees. As Ford and GM shut assembly plants and production cuts take hold, the supplier is studying whether it may have to cut even more, Youngman said.
Collins & Aikman filed a reorganisation plan in August. The company has proposed that top-priority lenders that were owed money when it entered bankruptcy protection receive warrants for shares in a reorganised company rather than cash repayment.Collins & Aikman hopes to emerge from Chapter 11 protection by February 2007, Youngman said."