Delta Tech Mold Inc., a longtime Chicago-area mold company, has transferred assets to a creditors' group that plans to sell the company.
Delta Tech, based in Arlington Heights, Ill., voluntarily assigned company assets on April 12 to financial restructuring firm Alex Moglia & Associates Inc. of Schaumburg, Ill. The turnaround firm represents company creditors, President Alex Moglia said in an April 26 telephone interview.
Mold-making operations at Delta Tech will continue while Moglia seeks buyers, he said. The company is asking for $10 million to purchase the 52-person injection mold facility, Moglia said.
Delta Tech — founded in 1966 by Klaus Cisliek and Fred Klemm — had encountered cash-flow problems similar to those faced recently by other toolmakers, Moglia said. In Delta Tech's case, it requires a sale of the company to continue, he said.
"The economic slowdown has affected all industries," Moglia said. "We've seen some contraction in work going offshore to both design and make [parts]. But this company is well-known in the industry, and we already have a great deal of interest in it."
The company makes injection molds primarily for disposable items in the medical and packaging industries, Moglia said. While the company is shopped, management continues to assist with day-to-day operations, he added. Cisliek referred a telephone call to Moglia for comment.
The turnaround firm has set no timetable for a sale, Moglia said. Delta Tech recorded about $10 million in sales last year, he added.
The toolmaker joins a mounting list of Chicago-area tooling shops that are facing financial challenges.
In late March, Schaumburg-based Mars Mold & Tool Inc. decided to sell its manufacturing assets while owner Phil Ciancio decides on his future.
And Atols Tool & Mold Corp. of Schiller Park, Ill., has shut down following a Chapter 7 bankruptcy liquidation, said Bruce Braker, president of the Park Ridge, Ill.-based Tooling & Manufacturing Association. Two voicemail messages left at Atols' facility were not returned.
Atols employed about 100 at its die-casting and mold-making plant. Vice President James Atols is a former national president of the American Mold Builders Association.
Mars Mold grew frustrated with attempts to collect money from customers and with increasing business moving to foreign countries, Ciancio said.
The mold maker began downsizing two years ago before liquidating the business, Ciancio said. About a third of the company's machinery already has been sold by Ciancio, with the rest expected to be purchased soon, he said.
Ciancio, who has been in the tooling business since the late 1960s, said he has never seen a situation as dire for U.S.-based mold makers.
Many of Mars' molding customers also have downsized or moved manufacturing to Asia, Ciancio said.
"Unless our government decides to subsidize manufacturing, we cannot compete," he said. "What's been going on defies description and is a major overhaul of what this country represents."
The company will retain its corporate license, and Ciancio is considering consulting as a next career step. Mars employed about 20.
The tooling slowdown also ripples through a quarterly survey conducted by the Tooling & Manufacturing Association. The group's member companies include about 175 mold makers and 80 molders, Braker said.
Its New Business Trends survey for the first quarter of 2001 indicated a big dip in overall business conditions. For mold and die makers, only one company rated business conditions as excellent.
Meanwhile, 21 companies said conditions were bad, while another eight rated conditions as fair. The survey's average business index, on a scale with 100 representing excellent conditions and zero representing bad conditions, averaged 19.
Braker said he has never recalled an index figure as low as that. Yet, the news is not entirely negative, he said.
"We've had 10 years of smooth sledding," he said. "There's going to be fat creeping into the system. Those who make the necessary changes to their operations could be stronger as long as they survive."
The association has launched a "Buy Chicago" campaign to build awareness of reasons to purchase tooling and molding locally and not go offshore.
A list of 10 reasons to buy from U.S.-based tool shops includes the lack of hands-on management and control in foreign countries, the high costs of shipping and travel and quality-control issues overseas.
Many Chicago-area tool shops are holding out until times get stronger. One, American Mold Corp. of Elk Grove Village, Ill., recently laid off eight of its 38 employees, said President John Zollicoffer. But the company has no plans to take more drastic steps, he said.
"It's pretty tight for both the small and big shops right now," Zollicoffer said. "But we're paying our bills and keeping up the best we can until it all breaks. And we think that when it breaks, it will break all at once."