Auto parts producer JPE Inc. plans to sell all of its operations after concluding that its Canadian operations will require continued investment to become profitable.
JPE of Ann Arbor, Mich., has hired investment banking firm CIBC Oppenheimer to find a buyer for JPE's original equipment manufacturer auto parts businesses, and for its aftermarket business, Dayton Parts Inc. of Harrisburg, Pa.
Donna Bacon, JPE executive vice president, expects the OEM and aftermarket businesses to attract separate buyers, but she said JPE would sell the operations as a package if the offer was right.
JPE's main OEM problems stem from its 1996 purchase of Pebra Inc., which operated two injection molding and painting facilities in Peterborough, Ontario, and a molding plant in Kitchener, Ontario. Bacon said her firm underestimated Pebra's operating losses when it bought the company out of bankruptcy.
JPE since has consolidated Peterborough operations in one plant and automated the paint line, but these programs have not been enough to turn the business around, she said in a telephone interview. She thinks the former Pebra business still needs equipment upgrades, retooling and further paint-line improvements.
JPE's auto OEM companies are the former Pebra business now called JPE Canada Inc.; extruded trim firm Plastic Trim Inc. of Dayton, Ohio; metal and coextruded trim producer Starboard Industries Inc. of East Tawas, Mich.; and lug nut producer Industrial & Automotive Fasteners Inc. of Royal Oak, Mich.
JPE said in a news release that its total sales were $287 million last year, of which OEM sales accounted for about $190 million. Bacon said she did not have a breakdown of individual company sales.
John Psarouthakis, JPE founder, chairman, president and chief executive officer, noted in a news release that the company's operations ``can be turned around in due time, but their growth and future performance would require further capital investments.''
Bacon said no timetable has been set for the sale of JPE's OEM and aftermarket businesses.
CIBC Oppenheimer's Global Automotive Group of Chicago is handling negotiations with prospective buyers. Bacon said Stuart Taylor, the group's managing director, has been showing operations to possible buyers but no firm offers have been made.