DETROIT -- An investor group is in final negotiations to buy a Hayes Lemmerz International Inc. automotive casting plant following a pledge of assistance from the state of Michigan.
Prospective buyer Dan Minor is set to acquire Hayes Lemmerz's Cadillac, Mich., plant following state legislation that made the buyers eligible for $2.7 million in tax credits over seven years.
Minor, 41, is a former manager at the plant. He says his group is "working closely with Hayes Lemmerz toward a successful sale of the operation." He declined further comment.
The future of the plant had been in question since Hayes Lemmerz, of Northville, Mich., said this year that it would either sell or close the factory as it restructures its business.
Michigan authorities use tax incentives to keep auto parts makers from fleeing to lower-cost states, Mexico and China. At least eight suppliers have obtained financial incentives this year, according to the Michigan Economic Development Corp.
But Minor's plan to buy the Hayes Lemmerz plant is not without risks. Last month, North America's largest automotive foundry company, Intermet Corp., of Troy, Mich., emerged from bankruptcy court. And many smaller companies have folded because of falling prices to customers and higher prices for scrap steel, the raw material of the industry.
A spokeswoman for Hayes Lemmerz International, which supplies wheels, brakes and suspension components, would say only that the company is working with Minor.
Sources say Minor and partner Todd Carlson plan to combine the Hayes Lemmerz ductile iron foundry with an earlier purchase, CMI Equipment and Engineering, Inc., an Au Gres, Mich., supplier of machinery for the casting industry. The new company will be called Cadillac Casting Inc.
The factory had been owned by CMI International Inc. before that company was purchased by Hayes Lemmerz in 1999. The Cadillac plant employs about 400 people and produces engine manifolds, steering knuckles and other components. Its largest customers are Ford Motor Co., General Motors and the Chrysler group. Hayes Lemmerz is expected to be a major customer.