With Venture Holdings Co. LLC joining its European subsidiary in bankruptcy, new leader Joe Day will have a chance to prove his lean manufacturing ideas in an unexpected, real-world situation.
In the meantime, court officials will oversee a rather complex combination of automotive supply operations.
Eleven different firms connected to Fraser, Mich.-based Venture Holdings - all fully owned by Larry Winget - filed for Chapter 11 protection from creditors March 28 in U.S. Bankruptcy Court in Detroit.
While new to Venture, Day has a strong reputation as a lean manufacturing specialist in the automotive industry. He retired from Freudenberg-NOK GB of Plymouth, Mich., in late 2002, intending to bring his lean production system to a university setting where he could instruct the next generation of manufacturers.
But with Venture he may be able to do more, and prove that his successful tenure at Freudenberg was not a fluke.
``One of the things he's been saying is that there still is hope for the American supplier industry, and he wants to demonstrate that through a company,'' said Dennis Virag, president of Automotive Consulting Group Inc. of Ann Arbor, Mich.
``If you do it once, people will say that you got lucky. If you do it twice, it becomes less of a question as to whether the system works,'' Virag said.
Day's reputation helped convince lenders to support Venture's turnaround plan, according to people familiar with the negotiations that preceded the bankruptcy filing. Key creditors had agreed in theory to taking partial ownership of the business, but they wanted strong leadership in place.
Day joined Venture's board in January and replaced Winget as chief executive officer March 28.
``I don't believe he would have any problem whatsoever of bringing the creditors along and pulling together the organization of Venture and its financial lenders,'' Virag said.
Day also has a good reputation on the shop floor. He's capable of connecting with hourly workers who may have lost confidence in their leaders.
``He knows what he's doing,'' Virag said. ``He knows he's got a big job ahead of him. He's not going into this with blinders on. If anyone is up for the job at Venture, it's Joe.''
Extensive negotiations that preceded the bankruptcy filing should ensure that the company can reorganize quickly and emerge from Chapter 11, the company claimed.
The 11 Venture businesses list different asset values in court papers, but all cite debt in excess of $100 million.
The filing came 10 months after the German-based leadership of Peguform GmbH, Venture's wholly owned subsidiary, filed for insolvency. A German judge approved that move in October. The BÃ¶tzingen, Germany-based injection molder of interior and exterior automotive systems now is for sale, leaving the rest of Venture without access to Peguform's cash flow.