Peake Plastics Corp., an injection molder of automotive interior trim, has shut down, blaming lost business from Tier 1 customers.
The company laid off most of the 215 workers at its Forest Hill, Md., plant, said Elizabeth Williams, a spokeswoman for the Maryland Department of Labor, Licensing and Regulation. The company told the department it would close completely by Nov. 8.
Peake was purchased in April 2003 by investment firm Morning Calm Holdings Inc. of Plymouth, Mich., and moved its corporate offices from Maryland to Michigan. Peake Chief Executive Officer Mark Lee, a former executive with GE Plastics, also heads Morning Calm. Lee did not return several telephone calls seeking comment before deadline.
Formerly called Old Line Plastics Inc., Peake specialized in decorative interior parts such as wood-grain panels, and in-mold decorating and laminating. At the time of the 2003 purchase, the company had annual sales of $25 million and 300 employees.
Peake, a minority-certified firm, aspired to become a larger Tier 2 supplier and possibly purchase other facilities. Morning Calm's investment was backed by lender Wynnchurch Capital Partners Ltd. of Lake Forest, Ill.
The firm blamed the shutdown on lost business, said Bill Bodie, Rapid Response coordinator with the Maryland department.
``They did a lot of work with different customers,''' Bodie said. ``From what I understand, they lost some of those customers and decided to get out of the business.''
The automotive market has remained difficult for many suppliers, even with an upturn in sales, said Wynnchurch President John Hatherly.
``[Smaller] companies don't have much leverage with customers,'' he said. ``I don't think customers understand the concept of partnership. They use small suppliers like Peake to be their bank.''
The shutdown was foreshadowed in September when Peake sold 14 injection presses at an online auction conducted by Hilco Industrial LLC of Northbrook, Ill. A Hilco spokesman said at the time that Peake was ridding itself of excess equipment.
Peake has been transitioning equipment and molds to other suppliers, Hatherly said.
Auto suppliers need specific engineering skills to survive, said David Eberly, senior managing director with equity firm Beringea LLC of Farmington Hills, Mich.
``It was probably a cold, rational, economic decision for the investors,'' Eberly said of the closing. ``If entrepreneurs start it and live and die with a company for 30 years, they have a tendency to hang on too long. For [Peake], they could look at it more analytically.''
Morning Calm and Wynnchurch plan to put the Peake Plastics experience behind them and look for other acquisitions, Hatherly said. ``Morning Calm is still quite a viable entity,'' he said.