Epton Industries Inc. of Kitchener, Ontario, will halt plastics production and close by Dec. 31, after failing to meet a payment plan set up in its 1993 bankruptcy filing. After the firm's annual shutdown the first two weeks of July, Epton transferred nearly all its workers to its plastics side and phased out rubber operations. The plastics automotive side-moldings segment of its business, which accounts for two-thirds of the manufacturer's work force and 50 percent of its annual sales of $21.4 million, now employs all of the company's 320 workers.
The firm - which makes marine fenders, roll coverings, industrial hose and belting, railroad crossing pads and molded and extruded mining products - simply ran out of money and time, said President Bill Thompson.
On the selling block since April 1993, Epton's secured lenders forced the closing after negotiations with a dozen firms - including two tentative agree-ments - failed to yield a sale.
Epton, which owes its secured lenders $12.6 million, did not have the capital to operate day-to-day and could not secure additional funding, Thompson said.
``There was a lack of re-sources to continue on the rubber side,'' he said. ``Resources have been provided by the customers - primarily [General Motors Corp.] - on the plastics side.''
Epton may sell the assets of its rubber business as a package or by industry segments.
An official from consultant firm Tire Technologies Inc. ofOntario met with Thompson Aug. 14 to study buying either or both sides of Epton's business.
``We're very interested and have been for some time,'' said President Herbert A. Heuchert, a former senior vice president for Uniroyal Goodrich Tire Co. ``I just don't know if the customers are still there, especially after they've been closed for a month.''
At least one firm has a bid on the table for the plastics business. Plastic Trim Inc. of Dayton, Ohio, made an offer in mid-July and is negotiating with Epton's secured lenders and bankruptcy trustee Price Waterhouse Ltd.
On Aug. 14, the Supreme Court of Ontario issued an annulment order, placing Epton in a bankruptcy process similar to Chapter 7 bankruptcy in the United States. The firm has until Dec. 31 to sell its assets.
``The plant will be operated by the bankruptcy trustees for a minimum of one month to a maximum of four months - but only on the plastics side,'' Thompson said. ``The earliest date it will close is Sept. 15.''
Rubber Workers Local 73, which staffs the Kitchener facility, signed a contract to operate under the revised bankruptcy agreement.
The 262-member local voted 164-14 in favor of accepting the pact, which according to James Webber, president of the local:
Increases members' base pay 9-17 percent.
Gives members a signing bonus of $569-$2,890.50, depending on seniority.
The agreement also has a clause stipulating that if Epton is sold, the local will work under the wage structure established in December 1992 - canceling the 9- to 17-percent increase in base pay.
Epton gave in to the union's operating incentives to keep its customers happy, Webber said.
``They want an orderly windup of the product line. And, in case somebody's ready to buy it, we already have an agreement in place,'' he said.
A sale of Epton is unlikely at this stage of the game, said John Symington, vice president of lending operations for majority lender Ontario Development Corp., which stands to lose as much as $6.2 million from Epton's closing.
``We were hoping to see something on the table and completed by June,'' Symington said. ``The company managed to go considerably beyond that. There comes a time - after a number of these talks have fallen through - that we don't want to put any more money on the table on the odd chance that something will come through.''