Blue Water Automotive Systems Inc. is shutting down its U.S. molding operations as of Aug. 29.
The firm, which has been under bankruptcy protection since Feb. 12, named that deadline in an Aug. 12 announcement sent to its customers.
Still, sources say Blue Water is continuing talks with potential buyers in last-minute attempts to keep at least one of the factories open.
Blue Water injection molds parts at three facilities in St. Clair, Mich., and single plants in Port Huron, Mich.; Caro, Mich.; Howell, Mich.; and Burlington, N.C. Blue Water also does molding in Tultitlan, Mexico. The firm specializes in air-flow-management parts and interior trim, and it makes assemblies. The company is a major supplier to Ford, Chrysler and General Motors.
Blue Water had been growing rapidly and looked like it was in good shape just a year ago, but that growth began to overwhelm the firm, said a former executive.
``It was more than they could handle,'' he said.
Problems arose because of lag time between the costs of engineering and gearing up new programs and the launch of those programs when auto suppliers get paid. Rising resin prices and slowing production also hit the company, and it could not secure the funding to cover its costs until the new business started.
After Blue Water entered Chapter 11 protection, insiders hoped to complete a deal to sell the firm, with two other molders in the hunt as future owners Flex-N-Gate Corp. of Urbana, Ill., and NYX Inc. of Livonia, Mich.
Automakers and creditors could not agree on a sale, though, in part because of the auto industry's desire to see a reduction in injection molding capacity, the source said.
Blue Water has filed a plan to liquidate, according to a report on TheDeal.com, an online business news publication. It is in talks with Ford and unsecured creditors to reach a consensus on the plan filed Aug. 6 in U.S. Bankruptcy Court in Detroit. The plan entails selling Blue Water's assets in lots or piecemeal and using proceeds to pay secured creditors.
An earlier deal to sell Blue Water to Flex-N-Gate fell apart because of objections by CIT Group and CIT Capital, according to TheDeal.com's report. Creditors claimed the sale would have provided them with $9.4 million, about a third of what they say is due them.