Key Plastics Inc., headquartered in Novi, Mich., has purchased the assets of Automatic Technologies Inc., a custom injection molder in South Bend, Ind., for an undisclosed sum. Automatic ceased molding operations about a month ago, according to industry sources.
Included in the purchase were three buildings that formerly housed Automatic's molding, tooling and painting operations. Rick Blough, vice president of administration and human resources for Key, said the molding facility has about 100,000 square feet of space and houses 28 state-of-the-art Toshiba injection molding machines, auxiliary equipment and various other pieces of older molding machinery and equipment.
Blough did not know the square footage of the two other buildings, but one houses a mold-making facility with state-of-the-art machinery.
Automatic Technologies' former owner, Hugh Silberman, has been part of the plastics industry for more than 30 years. Silberman could not be reached for comment.
Friends and plastics industry associates of Silberman's in South Bend said the company had been in trouble for quite some time after it lost several key contracts with IBM and Motorola. Neither company could be reached for confirmation of that information.
Automatic was heavily involved with customers in the electronics and telecommunications industries. One source close to the situation, who asked not to be identified, said that Silberman won a large contract to produce the molds and molded parts for a Motorola program. Just as the program was about to take off, Motorola canceled the contract. A Motorola spokesman declined to comment on specific suppliers.
Two years ago, Automatic suffered when another customer pulled the plug on a potentially large project. Automatic had completed tooling and was ready to run parts for EO Inc., a Santa Clara, Calif.-based computer firm whose majority owner was AT&T Corp.
The program, which would have given birth to the first personal digital assistant, was canceled by AT&T when the telecommunications giant pulled funding for the project.
At the time, Silberman said he was confident that he would recoup his engineering and other costs associated with his work on the PDA program.
Blough said he was not aware of the details of Automatic's financial position at the time of the asset purchase. He said Key bought the assets to accommodate expansion plans. Key expects to begin limited production in South Bend by the end of this year.
``Right now we're developing our production planning and strategy for all our facilities worldwide,'' Blough said. The South Bend facility ``fits in with our long-term growth plans and this plant puts us a little ahead of the curve.''
The facility is near Key's other production facilities in Indiana, Ohio and Michigan. Key, which was founded in 1985, operates 10 manufacturing plants in the United States, and also has plants in Portugal, England and Mexico. Key employs 2,300 worldwide. The company is a full-service supplier to the automotive industry, offering molding, assembly, painting, engineering and other significant technical resources to its customers, Blough said.