Injection molder Mayco Plastics Inc. has filed for bankruptcy and is in talks with a potential buyer, but if it can't reach a deal quickly, officials expect the company will close its doors for good.
The Sterling Heights, Mich., auto supplier had been in the forefront of firms working on ways to replace the standard paint process. But after an initial market launch, the program never won widespread commercial success.
In addition, Mayco was faced with the range of financial problems that has hit the auto supply industry, including rising resin costs and long-term contracts that did not allow it any flexibility in its prices, said Stephen Gross, a Bingham Farms, Mich., lawyer who represents Mayco.
In its Sept. 12 filing for Chapter 11 protection with the U.S. Bankruptcy Court in Detroit, Mayco and its financial group owner, Stonebridge Industries Inc., noted that the company had both assets and debts of between $50 million and $100 million.
The company is hoping for a ``very expedited'' sale, but if it cannot reach a deal soon Gross said he expects customers will begin re-sourcing business to other molders. Ideally, the firm would have a sale agreement within two weeks and a completed deal by early November. Without that, he said the company likely would close by Thanksgiving.
Mayco has one facility in Sterling Heights. It has 395 hourly employees and another 125 salary workers. It turns out a variety of interior and exterior parts for multiple automakers.
In 2002, the company was a partner in a technology launch with carmaker DaimlerChrysler Corp., A. Schulman Inc., ExxonMobil Chemical Co. and Build-A-Mold Ltd. to produce fascias for the Dodge Neon compact car. The fascia used an ionomer-based skin as its outer layer that replaced the traditional paint.
Mayco added thermoforming capabilities to its existing molding operations to turn out the skin, which was joined with the injection molded fascia in the press.
The process generated early excitement, but interest in large-scale paint replacement programs have been slow to build. General Motors Corp., for instance, has favored a different technology that has gone onto cars like the Chevrolet SSR.
There were a number of factors at play in Mayco's financial problems, Gross said, which included the failure to reach profitable production with the paint replacement.