Bryce Mayer, North Vernon Plain Dealer & Sun
A North Vernon auto parts factory is continuing operations even though its parent corporation began bankruptcy restructuring last week. The Metaldyne Corp. filed for bankruptcy protection Thursday.
How Metaldyne Sintered Components in North Vernon will be affected remains to be seen, though Kathy Ertel and others are cautiously optimistic.
"Our hopes are that the Metaldyne plant here will come out better than they are now," said Ertel, Jennings County Economic Development Commission director. "This is a restructuring and that can often lead to companies becoming more fluid."
Plant manager Dave Tempest declined to comment citing corporate policy.
The North Vernon plant currently employs 152 individuals with 25 temporarily laid off, said Marge Sorge, a spokesperson at Metaldyne's corporate office in Plymouth, Mich., in a telephone interview.
The local plant produces automotive connecting rods, which links pistons to crankshafts in engines for Ford, General Motors, International and Hyundai vehicles.
Located in what originally was the Carpenter Body Works plant at 3100 N. Highway 3, Metaldyne started production in North Vernon in 1994 when the company was known as Mascotech.
Metaldyne plans to sell a majority of its assets, and it said private-equity firms RHJ International (RHJI) and The Carlyle Group have expressed interest in the sintered components plants.
RHJI holds a majority stake in Metaldyne's parent, Asahi Tec Corp. of Japan. Asahi bought Metaldyne in 2007 but will withdraw its financial support after helping the company reduce about $400 million in debt.
"RHJI has offered a letter of intent (to buy Metaldyne's sintered division), but all offers will be considered (by the court)," Sorge said. "The future of the North Vernon plant will be up to whoever buys it."
Ertel thinks the local factory is in a good position based on its track record among Metaldyne's 17 facilities in the United States.
"They are at the top of the list for that company in production," she said. "They have good management and employees."
Metaldyne's entire corporation, which had 2008 sales of $1.57 billion, still has long-term debt of around $600 million.
"Unfortunately, despite this significant debt reduction, the impact from the macroeconomic environment of declining industry volumes, a tight credit market and the uncertainty in the marketplace were simply too large to overcome" without a bankruptcy restructuring," said Metaldyne Chairman and Chief Executive Thomas A. Amato in a news release.
Metaldyne filed for Chapter 11 protection in the U.S. bankruptcy court in New York. The filing doesn't include operations outside the United States.
Sorge said the bankruptcy won't necessarily mean any jobs will be lost or more layoffs will occur in North Vernon.
"That all depends on the customer demand," she said.
General Motors declaring bankruptcy itself this week could be a factor since the production of GM autos is being temporarily halted.
© 2024 North Vernon Plain Dealer and Sun