It looks like North America is about to have a new No. 1 injection molder. Collins & Aikman Corp. this afternoon announced that it has signed a letter of intent to sell most of its North American plastics business to Cadence Innovation LLC. This is all automotive, and the deal will be monitored by the U.S. Bankruptcy Court in Detroit, where C&A filed for protection from creditors in May 2005. C&A had said in November that it planned to sell most of its assets. One reason this deal is interesting is because it will put Cadence CEO Jerry Mosingo back in charge of some C&A operations -- he certainly should be familiar with those assets! The news release announcing the deal emphasizes that it will save jobs.
“This transaction will preserve a significant number of jobs, generate important recoveries for our creditors and represents a significant step toward confirmation of our chapter 11 plan” said John Boken, Collins & Aikman's Chief Restructuring Officer. The portion of the Plastics business covered in the [letter of intent] includes nine facilities in the United States, Canada and Mexico, employs approximately 3,500 people and produces products for all major North American automakers.Is that a good thing? I thought one reason C&A was in bankruptcy was because of all the overcapacity in the North American auto supply chain.