Engineered Plastic Products Inc. closed its doors June 30, part of a continuing contraction in the auto supply industry.
The Ypsilanti, Mich.-based injection molder entered Chapter 11 protection with the U.S. Bankruptcy Court in Detroit in March, at the time expecting to find a new owner and hoping to continue production.
Although some processors expressed interest in buying the assets, none showed up to a June 26 auction to bid on the company. EPP's equipment was sold to vendors, and customers quickly began moving molds and the book of business to EPP's competitors.
``It's a cold reality, but the traditional suppliers to the [North American automakers] are finding there is too much capacity out there,'' said Tim Dumond, a director with Farmington Hills, Mich.-based consulting group Stout Risius Ross.
EPP had annual sales of $63 million and 548 employees turning out interior trim at two sites in Michigan - Ypsilanti and Owosso - and in Lima, Ohio. The company had just launched an expansion at Lima in 2005 for additional business. But the expense of that project, along with rising resin costs and lower prices for parts, ate away at the firm's bottom line.
The work EPP had been doing already is being transferred to other suppliers, Dumond noted. Customers had built up an inventory of parts prior to the auction, and they began moving business and molds to other companies within days of the decision to shut down EPP's production.
The closing and the production transfer came at the start of a traditional two-week shutdown in the auto industry, when North American automakers and their suppliers change production over to new model cars.
The shutdown will give the new makers of EPP's parts time to bring the parts in house and troubleshoot startup production.