Kinetic Die Casting Company produces many products for manufacturing companies. Many of the products are used every day and can be seen every day. One product that is used frequently is the Utility Knife also known as a Box Cutter. …
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Judge allows GM to buy Delphi assets to help supplier emerge from bankruptcy
Judge allows GM to buy Delphi assets to help supplier emerge from bankruptcy
by Bree Fowler | The Associated Press
NEW YORK — A bankruptcy judge on Monday approved a deal that could shift some of auto parts supplier Delphi’s assets to General Motors Co., which emerged from bankruptcy protection last week.
U.S. Judge Robert Gerber, who is overseeing the liquidation of Motors Liquidation Co., the collection of assets and liabilities left over after the sale of prized GM assets to a new company, gave his approval to the deal, allowing GM and an affiliate of Platinum Equity to buy the bulk of Delphi’s assets and help the auto supplier emerge from bankruptcy protection.
All of the assets and costs related to the agreement will transfer to the new GM and not effect the finances of “Old GM” or the possible returns for the old company’s creditors, GM attorney Robert Lemons told the court.
AP PhotoThis is an undated photo released by United States Bankruptcy Court Tuesday, June 2, 2009, of Judge Robert Gerber.
The agreement could help save Delphi Corp. from liquidation, but still hinges on the consummation of a deal between the Troy, Michigan-based auto supplier, the new General Motors and Platinum.
As part of deal reached in June, Beverly Hills, California-based Platinum will be allowed to operate Delphi’s businesses both in the U.S. and abroad. Detroit-based GM will contribute a total of about $3.9 billion, including a $2 billion equity investment in Platinum, to help finance the deal. Platinum will contribute a maximum of $500 million in financing.
In exchange, GM will get certain parts of Delphi, including its Saginaw, Michigan-based steering business, and assurance of a steady supply of many of the parts it needs to produce its cars and trucks. Other “noncore” plants and assets will be sold off over time.
Delphi, which was GM’s parts division before being spun off in 1999, filed for bankruptcy protection in October 2005. It still produces about 10 percent of the parts used in GM’s global production and its components go into nearly all of GM’s North American production lines.
At the same time, GM is Delphi’s largest customer and the automaker’s business is crucial to its survival.
But some Delphi lenders, who have been funding the company’s operations under bankruptcy protection, have objected, calling the deal with Platinum a “secretly negotiated transaction” that violated Delphi’s obligations to maximize the value of the lenders’ investment.
Meanwhile, Platinum has maintained that Delphi was forced to look for funding elsewhere because the lenders didn’t provide enough, and that its offer remains the best option for Delphi.
No other parties have stepped forward with a bid to buy Delphi, but the lenders have until Thursday to submit their own bid. If they do, an auction will take place the next day in front of U.S. Judge Robert Drain, who is overseeing Delphi’s case, to determine which bid is superior.
A hearing on the sale of Delphi’s assets is scheduled for July 23. If a sale is approved, the company has said it could emerge from bankruptcy later this summer.
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Chrysler Financial pays off $1.5B in TARP loans
Chrysler Financial pays off $1.5B in TARP loans
by The Associated Press
FARMINGTON HILLS, Mich. — Chrysler Financial, the former financing arm of automaker Chrysler LLC, said Tuesday that it has repaid in full its $1.5 billion in government loans.
The funds used to repay the TARP loans were obtained through the completion of an automotive asset-backed securitization. Chrysler Financial said its original TARP loan contained provisions that increased its costs over time, motivating the company to pay off the loan quickly.
Amid tight credit markets, Farmington Hills, Mich.-based Chrysler Financial secured the Troubled Asset Relief Program, or TARP, funding in January so it would be able to offer more loans to more consumers.
The hope was that by doing so, the increased loan availability would spur more vehicle sales at Chrysler and help keep the Auburn Hills, Mich.-based automaker out of bankruptcy protection.
Chrysler Financial said it used the TARP money to fund more than 85,000 consumer loans for purchases of Chrysler vehicles.
Chrysler Financial served as Chrysler LLC’s preferred lender until the automaker filed for Chapter 11 earlier this year and it was replaced by GMAC Financial Services as part of the government-backed restructuring of the automaker.
As Chrysler’s preferred lender, GMAC is allowed to provide showroom financing to Chrysler dealers and has the right to exclusively offer certain discounted financing rates to Chrysler customers.
Chrysler Financial continues to offer dealership insurance and financial products to consumers. It has a loan portfolio of $45 billion.
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GM’s Volt electric vehicle plans a go regardless of bankruptcy
GM’s Volt electric vehicle plans a go regardless of bankruptcy
by Eric English | The Saginaw News
No matter what happens with General Motors Corp.’s bankruptcy filed in New York today, a company official says the Volt electric vehicle project is still moving in high gear.
And that could be good news for GM factories and suppliers operating in the Great Lakes Bay Region and Flint.
GM plans to build the 4-cylinder gas engine for the Volt at a GM factory in Flint. It also has hinted that it plans to use Bay City’s GM Powertrain factory to produce parts for the project.
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While bankruptcy could drastically change the auto giant, the Volt remains a top priority, said Dave Darovitz, a GM spokesman in Detroit for the project.
“Absolutely, the Volt is still on track to start production in late 2010,” Darovitz said. “There is no slippage in time as it relates to what’s going on with our company. It’s still the No. 1 product at GM.”
GM estimates that the Volt engine would preserve 300 jobs in Flint. The company won state tax credits valued at $132.5 million over 15 years for a plan to make Volts using five GM facilities in Michigan: Flint, Bay City, Pontiac, Detroit and Warren.
GM has not announced any anticipated Volt-related production work for its Saginaw Metal Casting Operations, which makes aluminum engine blocks and heads.
And to date, the corporation has only announced specific plans for using Flint as an engine source for the Volt.
GM also expects to manufacture the batteries that power the car in Michigan, Darovitz said. An announcement is pending, he said. Darovitz said he could not address when GM may announce work for other plants, referring questions to GM spokeswoman Sharon Basel at GM Powertrain in Warren.
“We have not made any announcements beyond Flint,” Basel said today. “The project is on time. There’s no change to that.”
Bay City Mayor Charles Brunner is one person waiting with high hopes for Volt work coming to the region.
“I’m still hopeful they are going to get that work,” he said.
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Two Missouri die-casting companies weathering storm
HANNIBAL, Mo. — Automotive manufacturers in Marion and Monroe counties have been hit hard by the economic downturn and the slumping automobile industry.
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Pace Industries is closing its doors, and Intermet filed bankruptcy, and its assets were bought at an auction, leaving the future of the plants in Monroe City and Palmyra in doubt.
However, two area die-casting manufacturers have weathered the worst of the wild economic ride — Lakeside Casting Solutions in Monroe City and Spartan Light Metal Products Inc. in Hannibal.
Lakeside Casting Solutions has cut its employees’ hours, but none of its 24 workers has been laid off.
“That’s the decision we made,” Lakeside President Bob Lehenbauer said. “We didn’t want to have to lose anybody over the situation. We keep our staff so low to start with, and we do cross-training where everybody can do everybody’s job so it’s not so compartmentalized. We also took advantage of the slow time to do some added training for the future.”
Lakeside tapped into the Missouri’s Shared Work Unemployment Compensation Program to help workers when hours were reduced. The program allows an employer to divide the available work or hours of work among a specified group of affected employees in lieu of a layoff, and it allows employees to receive a portion of their unemployment benefits while working reduced hours.
Also helpful has been the fact that only about 30 or 40 percent of Lakeside’s manufacturing is for the automotive industry, although Lehenbauer said auto industry manufacturing is often an indicator of things to come.
“What you see in automotive, the others follow suit. We see hints of that happening,” he said. “People are afraid to spend money.”
Lehenbauer, Mike Madden, Carl Donath and Jeff Mudd started the business almost seven years ago. July is a historically slow month in manufacturing, so Lehenbauer said Lakeside cut back to three 10-hour days a week. The pay difference for employees was made up through the Shared Work program.
“We’re telling our guys to take advantage of time, because down the road when people start feeling comfortable about releasing dollars, we’re going to get pretty busy,” he said.
Spartan Light Metal Products has three plants, including one in Hannibal. More than 200 of the company’s 750 hourly and salaried employees were laid off last year, but some workers are starting to be called back.
Spartan Vice President of Human Resources Philip Zampogna said the company is “definitely weathering the storm.”
“In fact, we are profitable, but that’s because tough decisions were made, including keeping the Hannibal facility open,” Zampogna said. “We felt like we made a commitment to the community and a commitment to the employees there, and also we had a particular customer we are servicing there.”
About 60 percent of what Spartan manufactures is for the automotive industry. Zampogna said Spartan’s manufacturing of “difficult parts,” highly engineered and machined parts, adds value to customers. The company’s diversification across the automotive manufacturing base, with customers in the United States and Asia, also helps.
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He said since the companywide layoffs, staffing has remained steady.
“We are cautiously optimistic for the remainder of this year,” Zampogna said. “We look at a number of different automotive forecasting sources, and those indicate a slight uptake in orders for remainder of this year, and those forecast even better (activity) next year.
“But the words ‘cautiously optimistic’ are critical here.”
He emphasized customers will be looking at suppliers’ finances in the coming months.
“Financial viability and actually being profitable are going to be key for suppliers during this rebound,” he said. “Our customers are looking at us, making sure we’re financially viable and have solid business plans. That’s one of the reasons we made some changes in our work force, to make sure we remained profitable.”
— apierceall@whig.com/
(573) 221-5879
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Revstone and KPS Portfolio Co. Goes for Metaldyne Assets
Hephaestus Holdings looks to buy the auto parts maker’s powertrain assets while Revstone looks to capitalize on chassis operations buy.
By JONATHAN MARINO
July 28, 2009
A pair of private equity firms are vying for separate parts of Metaldyne Corp. assets; Hephaestus Holdings, a KPS Capital company, and Revstone will look to buy much of the bankrupt auto parts maker’s chassis business.
The automotive sector, virtually across the board, wears tire tracks on its back after being especially hard hit during the recession. GM’s and Chrysler’s respective bankruptcies set off a chain of events affecting companies serving them from parts makers to GPS trackers.
Revstone has been making distressed acquisitions lately; earlier this year, it bought six plants from bankrupt auto parts maker Contech.
Hephaestus was approved as a stalking horse bidder for powertrain assets by a New York bankruptcy court and Revstone was approved to make the chassis operations bid; auctions will commence August 5 with bids due two days earlier.
Hephaestus wants to buy Metaldyne’s sintered products, European forgings and vibration controls products operations located in Europe, Asia, Brazil, Mexico and America. A Hephaestus affiliate looks to buy Metaldyne’s Bluffton, Ind.; Litchfield, Mich., and, subject to certain conditions, the Twinsburg, Ohio, plant. KPS Capital Partners will provide Hephaestus with a significant, yet unspecified, cash investment to support letters of credit and working capital.
Separately, Revstone is bidding on the purchase of Metaldyne’s chassis operations in Edon, Ohio; Greensboro, N.C.; Barcelona, Spain, and Iztapalapa, Mexico. The auction date for that segment will be August 3, with bids due July 31.
Revstone and Hephaestus are not the only two bidders for Metaldyne’s parts, however. RHJ International initially submitted a bid, which was trumped by Hephaestus, and a Carlyle bid was beat by Revstone. Calls were not returned by press time.
Metaldyne had 2008 revenue of $1.57 billion.
Metaldyne’s Balance Shaft Module and Tubular businesses are being marketed by the investment banking firm Donnelly Penman & Partners. Metaldyne’s Powertrain and Chassis operations are being marketed by Lazard.
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