An investors group led by local management is buying out one of Newcor Inc.'s rubber and plastic product subsidiaries.
Newcor parent Exx Inc. has agreed to sell the assets of Deckerville, Mich.-based Midwest Rubber & Plastic Inc. to Kedd Group LLC. The buyers include Midwest General Manager Ken Jehle and Dennis H. Reckinger, a 42-year veteran of the company who will come out of retirement to help manage the operation.
The deal should close the first week of October, according to Jehle. After that the company will revert to the name it used before Newcor acquired it in 1992, Midwest Rubber Co.
Exx said the sale should generate in the range of $4 million to $5 million in cash, which will be used to reduce Newcor's debt.
Midwest produces rubber and plastic boots, seals, grommets and coated metal parts by dip molding, slush casting, rotational and compression molding for the automotive, heavy-duty truck, farming, medical, toy and sporting goods markets. Midwest represented less than 10 percent of Newcor's sales and profit in recent years, Exx said, without giving an exact number.
For the first nine months of 2002, the company reported sales of $137.8 million, with $25.9 million of it coming from its three rubber and plastics subsidiaries.
The management group felt that Newcor's strategy for Midwest - which might have included rationalization of operations at the plant - did not align with the direction it wanted for the company, Jehle said. So the local group approached Exx and Newcor management several months ago with an offer to buy the operation.
``We're just interested in helping the employees, who are tremendous people, to move forward again,'' Jehle said. ``We're very people-rich here. That's our greatest asset.''
Midwest has 175 nonunion employees.
``We feel we can compete through innovations in design to cut costs and to produce [components] at a lower cost at this plant,'' Jehle said.
Jehle will remain general manager of Midwest but assume the additional role of president. Reckinger, who retired from the company in 1998, will return as executive vice president.