RANTOUL – As interested buyers start piecing back together the automotive parts industry, area folks are wondering whether Rantoul will be part of the puzzle.
Last November, Collins & Aikman Corp. announced plans to sell or close its operations, including its three plants in Rantoul. The Southfield, Mich.-based parts supplier filed Chapter 11 bankruptcy in May 2005 and concluded last fall it couldn't survive.
Since then, it's been scrambling to sell off plants with the greatest potential and shut down those unlikely to attract buyers.
So far, there's been no announcement of what companies might be in line to pick up any or all of the Rantoul plants, which last year employed about 1,000.
But speculation has centered on Cadence Innovation LLC, a Troy, Mich.-based company that on March 7 signed a letter of intent to buy part of Collins & Aikman's plastics business.
Collins & Aikman corporate spokesman David Youngman said Cadence has agreed to buy nine of Collins & Aikman's 28 injection-molding facilities, but the locations have not been disclosed.
The nine facilities employ about 3,500 employees, or roughly 29 percent of Collins & Aikman's total work force of 12,000.
Collins & Aikman is "working with Cadence to complete due diligence" on the deal and file a sale motion with the bankruptcy court, Youngman said. Because the sale is court-monitored, it's conceivable another buyer could come in and overbid Cadence for the facilities, he said.
Cadence currently employs 4,200 people at 17 facilities in the United States, Hungary and the Czech Republic, according to the company's Web site. Its automotive products include instrument panels, interior trim, painted exteriors, door modules and cargo management systems.
The company, formed in 2005, is headed by President and Chief Executive Officer Jerry L. Mosingo – who not so coincidentally once served as president and chief executive officer of Collins & Aikman.
According to Modern Plastics magazine, Mosingo was an executive for Textron's automotive trim division when it was acquired by Collins & Aikman in 2002. The Rantoul plants, long known as Rantoul Products, were part of Textron before the acquisition.
Mosingo was jettisoned by Collins & Aikman in 2003. Within a couple years, he was heading up Cadence, which was previously known as New Venture Holdings.
Developments last week show activity is heating up in the U.S. auto parts industry after several years in which suppliers filed bankruptcy.
Last week, a private-equity company, Cerberus Capital Management, agreed to buy most of the assets of Tower Automotive, a parts supplier that had filed Chapter 11 bankruptcy.
Cerberus is moving into the auto industry in a big way. The Wall Street Journal reported Thursday that the investment firm is trying to acquire parts supplier Delphi Corp. and has its eyes on Chrysler as well.
Last year, Cerberus bought a majority stake in GMAC, which had been General Motors' consumer finance business.
Earlier this year, Collins & Aikman agreed to sell its flooring and acoustics business to Cerberus.
But most of the news concerning Collins & Aikman last week swirled around the indictment of four former officers, including former Chairman and Chief Executive Officer David Stockman, for conspiracy to commit securities fraud.
Stockman is best known as the Reagan administration budget director sent "to the woodshed" after he trashed Reaganomics in conversations with a reporter during the early 1980s.
Collins & Aikman itself reached a nonprosecution agreement with federal prosecutors and issued a statement that it has been cooperating with government investigators.
In a phone interview last week, Youngman, the company's vice president of communications, outlined the status of Collins & Aikman's remaining facilities.
"At this point, we have not announced the buyer for any of the facilities at Rantoul," Youngman said.
He said Collins & Aikman has selected a leading bidder for its "soft-trim" business that includes 14 plants and 4,100 employees – but that bidder has yet to be publicly identified.
The company has completed the sale of its Owosso, Mich., plant and conducted an auction for two facilities in Williamston, Mich., Youngman said. As a result of the auction, those plants will be sold to Williamston Products Inc., pending approval from bankruptcy court.
Collins & Aikman is in the process of "final closure" for facilities in Americus, Ga., and Ontario, he added.
The company is looking for buyers for as many facilities as possible, Youngman said, "but we may not find buyers for every facility."
Recent press reports indicate Collins & Aikman employees in Columbia, Mo., and Morristown, Ind., have received notification their plants could close within 60 days.
Under the federal Worker Adjustment and Retraining Notification Act, companies must notify employees 60 days in advance of a plant closing if 50 or more full-time workers are affected.
Youngman said the company has issued WARN notices at some facilities, but not in Rantoul.
Recently, the president of Teamsters Local 26, which represents some workers at the Rantoul plants, in Rantoul, said he remains confident Collins & Aikman will find a buyer for the plants.
Patrick Gleason said he understands several prospective buyers have looked at the local facilities. He said it's "a good sign" none of the Rantoul employees has received a WARN notice.
"We're cautiously optimistic that this thing is going to work out and Rantoul Products will still be a viable company in the community," Gleason said. "It's a very efficient, productive plant with a good work force. There's no reason for it not to be purchased."
Gleason said he believes about 600 to 650 union employees are on the job at Collins & Aikman, down from 1,000 a year ago.
Most of Collins & Aikman's plants are located in the Great Lakes region and the Southeast. Eight of the plants are in Michigan, according to the company's Web site.
The Rantoul plants are the only ones listed in Illinois, but Collins & Aikman also has plants in Missouri, Indiana and Ohio, as well as Kentucky, Tennessee, North and South Carolina, Georgia, Maryland, New Hampshire and Massachusetts.
It also has facilities in Canada and Mexico.