The machinery assets of injection molder Reum Corp. will be auctioned off April 26 in Waukegan, Ill.
Reum's 200,000-square-foot plant in Waukegan closed in March. The firm - a unit of auto parts maker Reum Group of Hardheim, Germany - had molded auto interior parts and employed 173.
Michael Gesas, a Chicago-based bankruptcy attorney working with Reum, said the firm entered bids that were too low for contracts making dashboard parts and other items for Tier 1 suppliers. Parts made in Waukegan were used on vehicles made by General Motors Corp., BMW AG and Mercedes-Benz AG.
``From what I've seen, the prices they quoted looked to be at least 20 percent too low,'' Gesas said in an April 17 phone interview. ``And some of these contracts were for three to seven years. It created a cash burn of between $200,000 and $250,000 per week for at least the last half of 2006.''
By the time the parent company decided to cease operations, the site had run up a debt of about $8.5 million. The firm's suppliers allowed Reum to operate for the first three months of 2007 to build inventory without accumulating any new debt, Gesas added.
The auction will be conducted both on-site and via a Webcast conducted by the Branford Group, an auctioneer and appraiser based in Branford, Conn. The event will include more than 40 injection molding machines, some of which are less than 5 years old. The selection includes machines made by Krauss-Maffei, Ferromatik and Nissei with clamping force sizes from 27½-720 tons.
Also available are robots, granulators, dryers, blenders, chillers, conveyors and a $2 million material feed system. Paint lines and toolroom equipment also are being sold.
Two of the robots have never been used, and a 177-ton, two-color Krauss-Maffei machine has ``very low hours,'' according to James Gardner, a senior vice president with Branford. Gardner estimated that the auction would generate ``a couple of million dollars'' - which he said is larger than the typical plastics-related auctions of $800,000 to $1 million that the firm has conducted.
Reum had purchased the business in 2004 from Cherry Corp., a maker of industrial parts for the automotive, medical device and appliance markets based in Pleasant Prairie, Wis. At the time of the sale, the Waukegan site's annual sales were estimated at more than $100 million.
Officials with Reum Group could not be reached for comment.
