Intermet Corp., which operates the New River Foundry in Radford, announced that it has filed for Chapter 11 bankruptcy protection to restructure debt and operations.
On Aug. 8, Intermet laid off 56 workers at the Radford plant. Remaining employment there is about 160, according to Intermet spokesman Gordon Cole.
Intermet said the filing followed "60 days of unprecedented low automotive sales volumes" and high prices for commodities, including scrap metal. The company said its ferrous segment, which includes the New River Foundry, has been hit hard by declining markets for big trucks and sport utility vehicles.
Intermet does not supply the Volvo truck plant in Dublin, a major New River Valley employer. Volvo announced a business reorganization that could lower truck production at the plant beginning in the fourth quarter.
The foundry layoffs last week reflected market conditions affecting many automotive industry suppliers and were unrelated to the bankruptcy filing, Cole said.
In January, Intermet announced it would close a manufacturing plant 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.
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.
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.
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.
Other suppliers have been hit hard, too.
Rhonda Glover of the Detroit-based National Association of Black Automotive Suppliers said association members "are surviving."
"It is a tough time but suppliers are realizing they need to diversify their portfolios," Glover said.
She said there are opportunities to provide products for other industries, including aerospace and medical.