Auto supplier Harvard Industries Inc. is preparing to shut down the factory that helped push it into bankruptcy.
Late this month, the embattled supplier plans to close its aging plant in Toledo, Ohio. The move follows decisions by Ford Motor Co. and General Motors to transfer their contracts to other suppliers.
Toledo makes transmission casings for Ford and engine blocks for General Motors. The plant's two major customers lost patience after Harvard was plagued by equipment breakdowns and other production bottlenecks.
Harvard, based in Lebanon, N.J., tried to unload the plant last year when it sought a buyer for its troubled Doehler-Jarvis Division. The company hoped to generate $25 million to $40 million from the sale of the Toledo plant and two others, in Greeneville, Tenn., and Pottstown, Pa. But the Toledo plant's problems scared off potential buyers.
Robert Bumpus, president of UAW Local 1058, said the workers had tried hard to make the plant competitive.
SLAP IN THE FACE
'When you consider the number of employees close to retirement, I think it's a real slap in the face,' Bumpus said. The plant employs 300 workers, down from 700 last year.
The plant's demise reflects the end of Harvard's ambitious plans to become a mega-supplier. In 1995, Harvard acquired Doehler-Jarvis for $218 million, figuring that it could market a broad range of engine components.
Instead, the acquisition turned into a financial black hole, loading the company with debt and drying up its cash flow. In 1997, Harvard dumped the mastermind of its expansion, Chairman Vincent Naimoli, then filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code.
Now, the company hopes to rebuild itself on the strength of its Hayes-Albion and Trim Trends divisions, plus its two surviving Doehler-Jarvis plants. To boost cash flow, Harvard has won contracts to supply some nonautomotive industrial customers. The company also hopes to increase sales to the aftermarket.
'We have started to bring in some industrial and some aftermarket business,' said Jerry Tighe, Harvard's general counsel. 'But our main focus will always be automotive, and it will be primarily original equipment.'
Automotive News ranks Harvard as the 36th-largest OEM supplier to North America.
The company expects to file its proposal to emerge from Chapter 11 in September, Tighe added. That proposal had been due June 2, but Harvard was granted a delay by the U.S. Bankruptcy Court in Wilmington, Del.
Ford and GM have transferred some of the Toledo plant's contracts to three companies: Ryobi Ltd. of Shelbyville, Ind.; Amcan Castings Ltd. of Hamilton, Ontario; and Nelson Metal Products Corp. of Grandville, Mich. In addition, GM has given some work to Walker Die Casting Inc. of Lewisburg, Tenn., and Ford has transferred some to French Corp. of Sheboygan, Wis.