Cincinnati Fiberglass Inc., a maker of truck roofs and other truck parts, says it soon will be forced to sell its business or close because of pricing pressure from its main customer.
The Batavia, Ohio, company told the customer, heavy-truck maker Paccar Inc. of Bellevue, Wash., that it would stop business with Paccar in the next several months, says Gregory Meurer, Cincinnati Fiberglass executive vice president. The companies have agreed that Cincinnati Fiberglass will continue to supply Paccar for 60 to 120 days, he says.
Cincinnati Fiberglass is shopping for a buyer, and several unnamed parties are interested, Meurer says. The supplier seeks a buyer that will continue operations at its 104,000-square-foot Batavia plant, he says.
The nearly 30-year-old Cincinnati Fiberglass was forced to take action after losing money because of a price squeeze, Meurer says. Prices for fiberglass raw materials have spiked, and Paccar has asked for price reductions at the same time, he says. About 95 percent of Cincinnati Fiberglass' sales come from Paccar, he says.
Cincinnati Fiberglass uses about 200,000 pounds of resin a month for its processes, primarily resin transfer molding and spray-up work, Meurer says. About 20 percent of its costs come from materials, he says.
Cincinnati Fiberglass has 247 employees, all in Batavia, and recorded sales of $16 million last year, he says.
Cincinnati Fiberglass contacted Paccar this month, Meurer says. He says Paccar had delayed paying the supplier for its truck parts and then requested a lower base price.
Paccar officials could not be reached for comment. The publicly held company posted record sales and profits in 2004, ending the year with $11.4 billion in sales, according to its financial statements.
Paccar makes Kenworth, Peterbilt and DAF trucks.