Hastings, MI -- After 90 years in the automotive business, Hastings Manufacturing Co. has filed for Chapter 11 bankruptcy protection and accepted an offer to sell the assets of the company to The Anderson Group, Inc.
The Hastings, MI-based automotive supplier said it filed the Chapter 11 petition on Wednesday in the U.S. Bankruptcy Court for the Western District of Michigan. Hastings Manufacturing has received an offer from The Anderson Group, Inc., a Bloomfield Hills, MI-based holding company that owns and operates various manufacturing companies, to purchase the company’s assets.
The sale will be conducted by an auction process and Anderson's offer will serve as the opening bid for that auction. Subject to the final bidding process and with the approval of the bankruptcy court, the sale should be completed before the end of 2005.
Anderson has indicated it plans to continue production of Hastings Manufacturing’s piston ring product line in Hastings. The company anticipates there will be no interruption of supply, service or delivery during the bankruptcy proceedings. Anderson foresees no immediate changes in operations at the facility.
“The management team of Hastings Manufacturing, led by Mark and Andrew Johnson, has tried repeatedly but unsuccessfully for the past years to restructure operations,” said William J. Beck, who has served as interim chief operating officer and chief restructuring officer since May of this year. “Several factors have led to years of declining sales and profitability, including the shrinking automotive aftermarket for the company's products in the United States, problems with a Canadian acquisition, contractual constraints on implementing cost reductions and the burden of certain legacy costs.
“While we are disappointed that circumstances necessitate a sale of the company, we are very pleased The Anderson Group has agreed to purchase the assets of Hastings Manufacturing and continue operating the business as a going concern. Until the sale is finalized, we plan to maintain business as usual by continuing to provide our customers with high quality products and support.”
Based in Bloomfield Hills, MI, The Anderson Group is a private investment company specializing in acquiring and managing middle-market manufacturing, distribution, service and marketing businesses. Anderson has a successful track record in investing in companies supplying components to the auto industry.
Hastings Manufacturing got its start in 1915 when Aben Johnson began production of a wide range of automotive components, including oil pumps, bumpers and luggage carriers, from a manufacturing plant in Hastings. Eight years later, the company introduced its first piston rings, which would grow to become the centerpiece of its business.
Recognized by the automotive community for its technical innovations, Hastings Manufacturing enjoyed many decades of profitable growth. Hastings Manufacturing also expanded operations into Canada, established a foundry and added new product lines, including oil filters.
During the 1980s, Hastings Manufacturing began a period of strong sales to domestic and international automakers, including Chrysler, General Motors, Mercedes and Nissan, as well as to motorcycle manufacturer Harley-Davidson. To accommodate these new customers, the company added a manufacturing plant in South Dakota and a warehouse in Tennessee.
Growth slowed during the 1990s and Hastings Manufacturing decided to sell its filter operations in order to focus on its core piston ring business. It sold its facilities in South Dakota and Tennessee and began concentrating its efforts on marketing and distribution, both domestically and abroad.
In 2003, the company acquired Canadian automotive supplier Ertel Manufacturing. Sudden and unexpected softness in the Canadian automotive aftermarket as well as other factors prompted the company to close its Canadian operations in 2004.
“The Hastings name has strong brand awareness and respect within the markets it serves,” Beck said. “We feel that The Anderson Group will be able to use its manufacturing and marketing skills to leverage the company's strengths.”
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