Foundry Daily News

USA - Intermet files for bankruptcy

<font size="2">Intermet Corp., which operates the New River <a href=";tx_hrtdictionary_pi1[showUid]=4184" target="_top">Foundry</a> in Radford, announced that it has filed for Chapter 11 bankruptcy protection to restructure debt and operations.</font>

<font size="2">On Aug. 8, Intermet laid off 56 workers at the Radford <a href=";tx_hrtdictionary_pi1[showUid]=7956" target="_top">plant</a>. Remaining employment there is about 160, according to Intermet spokesman Gordon Cole. </font>

<font size="2">Intermet said the filing followed "60 days of unprecedented low automotive sales volumes" and high prices for commodities, including <a href=";tx_hrtdictionary_pi1[showUid]=9359" target="_top">scrap metal</a>. The company said its <a href=";tx_hrtdictionary_pi1[showUid]=3859" target="_top">ferrous</a> segment, which includes the New River <a href=";tx_hrtdictionary_pi1[showUid]=4184" target="_top">Foundry</a>, has been hit hard by declining markets for big trucks and sport utility vehicles.</font>

<font size="2">Intermet does not supply the Volvo truck <a href=";tx_hrtdictionary_pi1[showUid]=7956" target="_top">plant</a> in Dublin, a major New River Valley employer. Volvo announced a business reorganization that could lower truck production at the <a href=";tx_hrtdictionary_pi1[showUid]=7956" target="_top">plant</a> beginning in the fourth quarter.</font>

<font size="2">The <a href=";tx_hrtdictionary_pi1[showUid]=4184" target="_top">foundry</a> layoffs last week reflected market conditions affecting many automotive industry suppliers and were unrelated to the bankruptcy filing, Cole said.</font>

<font size="2">In January, Intermet announced it would close a manufacturing <a href=";tx_hrtdictionary_pi1[showUid]=7956" target="_top">plant</a> in Pulaski, Tenn., a move it attributed to forecast drops in vehicle production. That plant employed about 105 people. For the year ending July 31, Intermet said its sales from operations totaled about $310 million. Previous year sales were not disclosed.</font>

<font size="2">Intermet previously filed for Chapter 11 protection in September 2004 and emerged from bankruptcy in November 2005. At the time, it had more than 5,000 employees worldwide. Companywide employment is now 1,700.</font>

<font size="2">Cole described the two Chapter 11 filings as separate actions by two different companies. Intermet is now a private company, he said, with a new management team.</font>

<font size="2">In a Chapter 11 bankruptcy, if the court approves, a debtor retains ownership of the company and control of operations while reorganizing the business. Debtors and creditors have flexibility to work together.</font>

<font size="2">Other suppliers have been hit hard, too.</font>

<font size="2">Rhonda Glover of the Detroit-based National Association of Black Automotive Suppliers said association members "are surviving."</font>

<font size="2">"It is a tough time but suppliers are realizing they need to diversify their portfolios," Glover said. </font>

<font size="2">She said there are opportunities to provide products for other industries, including aerospace and medical.</font>

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