Harvard Industries Inc., clouded by a recent Chapter 11 bankruptcy filing, will close its one remaining Harman Industries Inc. injection molding plant in Bolivar, Tenn., by mid-February unless a buyer comes forward.
The 293,000-square-foot plant, which has faced dwindling production volumes and a downsized staff, had been on the sales block since January by Harvard, its Tampa, Fla.-based parent.
With no apparent sale in sight, Harvard told General Motors Corp. — the plant's primary customer — on Nov. 17 that the facility would cease production in 90 days, said Richard Dawson, Harvard's senior vice president for law and administration.
The facility, which employs about 400, molds nylon door handles and outside rear-view mirror shells for GM Cadillac models, and other products. The Harman subsidiary, which had more than 500 workers two years ago, has faced sagging sales, Dawson said.
``We've had a steadily declining business base there,'' Dawson said. ``The company is at the point where operations can't cover costs. Even though we've gotten some new GM business, there's not enough growth there to make it a keeper.''
However, a new buyer may have emerged. Roy Thomas, international representative for the United Autoworkers in Memphis, Tenn., said he was told by Harvard to expect a meeting in December with a minority-owned supplier to discuss contract issues. The plant is represented by UAW Local 1303.
``We're still hoping that they sell the plant by the end of the year,'' Thomas said. ``There is a potential buyer at this point, and [Harvard] would like us to sit down with them to open negotiations. We'll have a membership meeting to decide what we should do.''
Thomas identified the potential buyer as Pillar Industries of Flint, Mich. However, the only company in the North American auto industry known by that name is a heat-treatment equipment maker based in Menomonee Falls, Wis.
Pillar spokesman Frank Wilson said that, to his knowledge, the company had no interest in the Bolivar plant.
Dawson would only comment that one company currently was considering buying the facility.
Harvard had entered negotiations last year with a minority-owned supplier to buy the business for $18 million, according to industry sources and a Securities and Exchange Commission filing. That sale apparently fell through.
The large plant conducts mirror assembly and painting operations, in addition to its molding work. The number of injection presses was not available.
Finding a buyer could be difficult, said several automotive sources. The plant is operating at about 20 percent of capacity and only has about a 3-4 percent market share in the door handle sector, according to sources.
In addition, GM recently put the plant's door handle contract out for bid, one source said. ``It would be tough to sell it if there's no business there,'' the source said.
The fortunes of the Harman subsidiary first took a nose dive in 1992, when Harvard filed for Chapter 11 bankruptcy protection, Dawson said. The filing led Ford Motor Co. to take its business from the Bolivar plant, he said. Harvard emerged from Chapter 11 soon after that.
Harman eventually replaced the lost mirror business with a new door handle contract from GM and another $6 million GM contract to mold and assemble exterior mirrors and appliques for the 1995 Chevrolet Camaro and Pontiac Firebird.
Yet, that hasn't been enough to keep the plant afloat, Dawson said. The company closed a Harman plant in Puerto Rico in 1994 and one in Sevierville, Tenn., in late 1995. The Bolivar operation is the only one that remains for Harman, which started in 1912 and was bought by Harvard around 1982, Dawson said.
In May, Harvard again entered Chapter 11 after defaulting on more than $384 million in long-term debt. Officials cannot predict when the firm will emerge from Chapter 11, Dawson said.
Harvard announced in January that it had put up for sale its Harman unit, along with two other divisions: the Doehler-Jarvis aluminum castings group and Harvard Interiors Manufacturing Co., which makes both office furniture and rocket launchers.
The materials-handling division of its Kingston-Warren Corp. rubber sealing group also was sold recently to Stanwich Acquisition Corp.
For the first nine months of the firm's current fiscal year, those four groups recorded a $28.4 million sales decline from the previous year and a 0.4 percent gross profit. The company's fiscal year ended Sept. 30, but results have not yet been reported.
The company also recorded a $134 million charge in its second-quarter results, mainly due to financial troubles at its Doehler-Jarvis and Harman subsidiaries.
The company has backed down in its desire to sell the Doehler-Jarvis business, Dawson said. But operations at its Toledo, Ohio, plant could wind down, depending on how much work its customers are willing to leave at the location, he added.
In the highly charged mirror and door handle arenas, the Bolivar plant could have trouble competing, said consultant Craig Cather of CSM Corp. in Okemos, Mich.
``The markets are so fragmented that it is difficult for a company to be profitable in them,'' Cather said. ``Several other companies could be trying to get out of the business. Profit margins are extremely thin due to the number of competitors.''
Harvard recorded about $775 million in automotive sales for 1996.