DETROIT — When General Motors pulled its business from a small auto supplier, it was the last straw for the Detroit stamping company.
Already in Chapter 11, Solar Stamping and Manufacturing LLC decided to fold because its largest customer, GM, was moving its business to rivals, according to documents filed with the U.S. Bankruptcy Court for the Eastern District of Michigan here.
On Nov. 29, Solar was given court approval to convert its Chapter 11 creditor protection proceeding into Chapter 7 liquidation, according to the documents.
Automakers sometimes support troubled suppliers to avoid parts shortages that could interrupt assembly operations. Solar had been operating with the aid of a GM debtor-in-possession loan of $2.32 million.
Solar President Michael Porath says the company suffered a succession of misfortunes. About $1.5 million worth of tooling was stolen. A substantial customer went bankrupt. And he was forced into a costly recall because a vendor had supplied faulty parts.
"GM," he says, "decided to pull the plug."
Porath says he tried to persuade his other customers to support him. "They said, 'If GM goes, we go.' "
About half of Solar's $16 million in gross sales last year came from GM. The company, which employed about 130, made brackets, levers, actuators and an assortment of powertrain parts. Solar listed assets of $7.0 million and debts of $7.9 million.
A GM spokeswoman declined to comment.
On Aug. 29, Solar sought relief under Chapter 11, citing high steel prices and declining volume from customers. That forced the company to operate at a loss, according to court documents.
On Oct. 18, Solar threw in the towel, filing a motion to convert to Chapter 7 liquidation. c