Meridian Automotive Systems Inc. is laying the foundation for its emergence from Chapter 11 protection sometime next year, beginning by expanding its business beyond the auto industry.
The company, which in April filed for Chapter 11 protection with U.S. Bankruptcy Court in Wilmington, Del., is working through the details on its restructuring plan, but the process will create a firm with less debt and its same production and technology capabilities, said Chief Operating Officer Steve McKenzie in an Oct. 12 telephone interview.
As a part of its long-term plan, Dearborn, Mich.-based Meridian has created a new consumer and industrial products business unit. While the company has no plans to abandon the auto industry, it sees nonauto contracts as an opportunity to expand its sales across a wider manufacturing base.
Meridian makes a variety of parts from thermoplastics and thermoset plastics, using injection molding and compression molding. It produces the box for the Honda Ridgeline truck, sport utility vehicle lift gates, bumper fascia and a variety of other exterior parts.
Its first nonauto products already are on the market, including a sheet molding compound floor for a shower stall, a glass-mat thermoplastic air conditioner base, sewing machine housings made with bulk moldng compound and the entire floor of a golf cart produced from a long-glass-fiber polypropylene.
``With the process and engineering know-how we have developed in automotive, we can apply those skills outside the auto industry,'' McKenzie said.
Meridian entered bankruptcy protection faced with more than $600 million in debt and about $1 billion in annual sales. It also was dealing with increasing resin prices and demands to cut costs. It has approached its restructuring carefully to ensure continued backing by its customers and suppliers, while still working on reducing its overall debt to emerge as a stronger entity, McKenzie said.
The new business unit will be based out of Meridian's Lenoir, N.C., facility, but will use the same manufacturing equipment as the auto systems group as it establishes itself. The group will target work in recreational vehicles, all-terrain vehicles and large trucks, in addition to the products it already is making, McKenzie said.
``We have the largest compression molding fleet out there, and we want to utilize those presses,'' he said.