If a buyer does not step forward in the next 60 days, Summit Plastic Solutions Inc. could be liquidated, resulting in the closure of its units, Apogee Plastic Technologies Inc. of Florida and Pro Corp. of Massachusetts.
Founded in the 1840s in Florence, Mass., Pro claims to be the oldest continuously operating U.S. plastic injection molder. A number of employees are third- or fourth-generation Pro workers.
Events unfolded quickly last week, as majority owner Mesirow Private Equity Investments Inc. removed Terry Minnick as Summit Plastic Solutions chairman and chief executive officer and brought in interim management to sell — or close down — the company.
``I'm basically heartsick over the whole deal because if things continue as they appear to be going, all the employees will lose their jobs, and a company that's been around for 150 years will cease to exist,'' Minnick said last week in a telephone interview from Florence. ``A company that's been a foundation to this community will go away. And the only way to save it is to sell it as a going concern.''
Minnick owns 10 percent of the company. Although he is no longer involved in management, he said he wants to help find a buyer. Mesirow owns 70 percent, he said.
Pro and Apogee together employ 350 people. The companies injection mold computer housings and parts for other business machines and electronic products. Sales for 1996 were $32 million, down from $40 million in 1995.
The interim management team brought in by Chicago-based Mesirow is staffed by employees of Development Specialists Inc., also of Chicago.
James Moore, interim chief operating officer of Summit Plastic Solutions, said he and other DSI officials studied the company and gave their recommendations to Mesirow and a bank that is a secured creditor. Moore said they told Mesirow that ``something had to be done quickly to protect ourselves from bankruptcy action we had no control over.''
Moore and the other interim executives — Bill Brant, president, and Steve Victor, chief financial officer — came to Florence to manage Pro Corp. on July 7. Minnick cleaned out his desk and left the next day.
``The Mesirow folks would not issue any more cash, and without cash the company can't operate,'' Moore said.
Interviewed July 9, Moore said the new management is considering a bankruptcy filing. Pro and Apogee will continue to manufacture parts through the next two months.
``We won't take any new orders, but will continue to run out the backlog that we have, keeping in mind the availability of raw inventory [that] we expect will be depleted in a 60-day period.''
``We are trying to market the company. Failing that effort, we will liquidate,'' Moore said.
Most members of the sales staff already have been let go, and more layoffs are likely, he said.
Minnick said that earlier this month, the Summit board of directors had approved his plan to close the money-losing Apogee molding plant in Daytona Beach, Fla., and move the business to Florence.
But Moore said that decision has been rescinded, and the Apogee operation also is for sale.
William Sutter Jr., Mesirow executive vice president, issued a short statement: ``We recognize that Summit has had financial problems. We remain hopeful that these will be resolved.''
Sutter was traveling and not available for further comment, said a spokeswoman in his office.
Brant, Summit's interim president, was the trustee of Shape Inc. during the five-year Chapter 11 reorganization by the molder in Biddeford, Maine.
Minnick said he talked with Mesirow officials during the Fourth of July weekend and was informed of the decision to bring in new management. Although he said he opposed that strategy, Minnick said Mesirow and Sutter have been fair in running, and providing money for, the plastics company.
``He's a good guy,'' Minnick said of Sutter. ``Mesirow was very supportive with us. When we needed money a few times, they put in money.''
Now the money supply has run out.
Pro Corp. started out as Florence Manufacturing Co., founded in the 1840s by Alfred Critchlow, a die sinker and artisan of animal horns from England. The company later became Pro-phy-lac-tic Brush Co., and molded early plastic products such as buttons and toothbrushes. In 1964, the company became the first custom molder to concentrate on the business equipment market.
Minnick bought Pro in 1989 in a leveraged buyout, as the sole owner. In late 1994, new investors came in, including Mesirow Financial and Winter Park Capital of Winter Park, Fla. Just a few months later, in early 1995, the company bought Apogee in Daytona Beach, which operated in a building formerly occupied by Fame Plastics Inc.
Apogee brought expertise in shielding and electroless nickel and copper plating and shielding.
At the time, Mesirow officials had said they wanted to keep on buying, to build a major group of plastics companies to sell or take public.
But in retrospect, Minnick said, buying Apogee was a mistake. Customers have favored copper painting instead, and last summer, Apogee closed its electroless plating department.
``We had very high fixed costs and we never recovered from that acquisition. It was probably an ill-advised acquisition and we couldn't keep it filled with volume.''
Meanwhile, another acquisition, the 1996 purchase of Presto Plastics Corp., did not work out. Summit bought Presto, a Stamford, Conn., custom molder serving the point-of-purchase display market, and moved its equipment to Florence.
``The business turned out to be not very compatible with ours. It turned out to be more different than we realized,'' he said.
Summit also lost a longtime television customer when JVC Manufacturing Co. moved its TV plant from Elmwood Park, N.J., to Tijuana, Mexico.
Two competitors said last week they might be interested in Summit Plastic Solutions.
``We'd certainly take a look at them,'' said Jeff Somple, director of sales and engineering at Mack Molding Co. of Arlington, Vt. ``They've been around a long time and have been a good competitor of ours.''
Mark Halstead, vice president of sales and marketing at Oneida Rostone Corp., said his firm in Oneida, N.Y., always is looking for acquisitions.
``They are certainly the type of company we might look at,'' Halstead said.
In Florence, the mood was bleak among veteran Pro employees. Receptionist Alice Toohey, who celebrated 52 years at the plant June 25, said: ``It's just a sad day. I feel especially bad for all the people with families to support.
``This place has been going for 150 years. Everybody or his brother in Florence and Northampton worked here for awhile. It's been a great place to work,'' Toohey said.
At Pro, the history runs deep. Five generations of Steidlers have worked there. Last week, John Steidler, a dispatcher, was wearing a gold Bulova watch presented recently for his 40th anniversary at the plastics plant. He joined Pro shortly before his father's 40th anniversary with the company.
Steidler was visibly upset.
``So what you gonna do?'' he said. And he walked away.
Plastics News correspondent Dorrie Alderman Blakney contributed to this story.