When entrepreneur Heinz Prechter's ASC Inc. faced financial difficulty, he put his personal fortune at risk to keep it going.
But when recent troubles plagued ASC, the private equity owner that bought the company after Prechter's death in 2001 put ASC into Chapter 11 reorganization.
The Chapter 11 filing May 2 was part of a deal announced May 4 to sell some of the company's assets.
The surge of private equity in the auto industry brings a disciplined dollars-and-cents operational style. It brings new capital. But there is little patience for investments that fail to earn profits because of setbacks or dips in fortunes.
But ASC's markets and technology were eroding before the manufacturer of specialty vehicles, sunroofs and convertible tops was acquired in 2002 by Questor Management Co. LLC, the buyout firm co-founded by turnaround star Jay Alix.
Once-celebrated ASC was beset by cutthroat competition and the unexpected cancellation in 2005 of a huge General Motors Corp. contract. And, according to a former insider, ASC failed to make enough investments in engineering and operational support.
The owners and operators of the Southgate, Mich., company are trying to assemble a new specialty-vehicles company with its prospective buyer, according to ASC Chief Executive Officer Paul Wilbur.
The buyer is Hancock Park Associates, a Los Angeles private equity firm. It owns Saleen, the Ford specialty tuner for the Saleen S7 and the Ford GT, according to an e-mail message Wilbur sent to Automotive News last week.
Hancock Park, as a condition of sale, asked ASC to file Chapter 11 to avoid future claims by creditors against Hancock Park, according to Wilbur. The aim, he stated, ``is to create a powerful new specialty vehicle company.''
ASC was hurt by lower Big Three volumes. But Wilbur said in a U.S. Bankruptcy Court affidavit it was GM's ``unexpected and premature'' decision in late 2005 to discontinue the SSR roadster pickup after just two years of production that undermined ASC.
The SSR accounted for more than 50 percent of ASC's annual sales, which Automotive News estimated to be $500 million in 2005.
According to Wilbur's court statement, ASC generated only $106.7 million in sales in 2006. ASC's workforce went from 1,250 employees in January 2005 to 252 this year, Wilbur's statement said.
GM also ended contracts for three other specialty vehicles and postponed or canceled additional early-stage projects.
GM spokeswoman Deborah Silverman said that when the automaker canceled the SSR, ``we came to an accommodation that was mutually satisfactory for both parties.''
ASC said it invested nearly $250 million in the SSR program.
ASC was profitable when Questor acquired it. Prechter pioneered the North American original-equipment and aftermarket sunroof businesses. He brought back the convertible top for the Corvette and dominated the sector by supplying ``top stacks'' for the Mustang and the Chrysler Sebring and others.
Prechter wowed the automotive press in 1995 with his conversion of the Mitsubishi 3000GT into the 3000 GT Spyder, North America's first retractable hardtop convertible since the 1959 Ford Skyliner.
But the empire Prechter founded in 1965 withered from intense competition. By the time of Prechter's death, several global companies were entrenched in ASC's various segments. They brought new technology and better engineering. For example:
* European competitors Inalfa Roof Systems Inc. and Webasto Roof Systems Inc. now dominate the sunroof market.
* Much of Prechter's soft-top convertible business was lost to Dura Convertible Systems - a unit of Collins & Aikman Corp., now in Chapter 11 - and Karmann USA Inc.
* In the retractable hardtop business, Karmann and Magna Car Top Systems, formerly CTS Car Top Systems NA Inc., now dominate.
``Either from inability or indecision,'' said a former high-level insider, ``the fact is that the company did not invest in engineering and operational support to produce hard- and soft-top convertible systems and sunroofs.''