Powertrain and engine component supplier J.L. French Automotive Castings Inc. filed for Chapter 11 bankruptcy reorganization last week to restructure its debts.
The privately held company also said it will close operations in Benton Harbor, Mich., and Saltillo, Mexico. Plants in England and Wales also filed for administration, which is a method to reorganize there. J.L. French said the future of those two plants was undecided.
J.L. French said many of the terms of its bankruptcy reorganization already have been worked out with creditors. The company said it plans to emerge from protection by the end of the second quarter and will continue to supply its customers without interruption.
"Our recovery will be rapid and successful," CEO Jack Falcon said in a press release. "In fact, we have already obtained commitments for new business from our major customers."
The company said it relies heavily on business from Ford Motor Co. and General Motors. Ford is its largest customer, making up 36 percent of sales, and GM has 30 percent. DaimlerChrysler follows with 7 percent. North America accounts for 76 percent of French's business.
The filing did not come as a surprise. On Jan. 20, Standard & Poor's said it received unconfirmed reports that French did not make a bond interest payment that was due Dec. 1.
"J.L. French has suffered from the intense challenges of the automotive-casting industry, which is fragmented, highly capital-intensive and subject to volatile demand and customer pricing pressures," S&P said on Jan. 20.
J.L. French said it expects its restructuring to net up to $130 million in new equity investment as a result of the agreement reached with its lien holders.
The Sheboygan, Wis., company employs more than 1,800 people.
The Chapter 11 petition, filed in U.S. Bankruptcy Court in Wilmington, Del., does not include the company's foreign affiliates.
J.L. French ranks No. 102 on the Automotive News list of the top 150 suppliers to North America, with original-equipment automotive parts sales of $398 million in 2004.
You may e-mail Greg Migliore at [email protected]