From Automotive News/MEMA Industry News
CONCORD, Ontario — Canadian supplier Progressive Molded Products Inc. filed for Chapter 11 protection late Friday, June 20, listing debts in excess of $500 million and assets of no more that $50 million.
Progressive’s filing in U.S. Bankruptcy Court in Wilmington, Del., comes in the shadow of the Feb. 1 bankruptcy filing by giant interior plastic trim supplier Plastech Engineered Products Inc., of suburban Detroit. Plastech, with $1.4 billion in revenue in 2007, has begun liquidating its business under court protection.
Progressive, of Concord, Ontario, is majority owned by Boston buyout firm Thomas H. Lee Partners LP, according to court documents. There was no indication in the documents if the company has filed for the equivalent of bankruptcy protection in Canada.
Progressive suffered from a balance sheet weighted by debt from its 2004 takeover by the buyout firm, says a source familiar with the supplier. That made it difficult in North America because parts makers have struggled for two years under the burden of rising resin prices and excess factory capacity.
The parts makers have found it difficult to pass along rising resin costs to automakers.
Another major plastics parts company, Collins & Aikman Corp., finished liquidating in Chapter 11 late last year. Investor Wilbur Ross, who bought most of the Collins & Aikman assets for pennies on the dollar, says the industry has far too much manufacturing capacity. The scramble for business has added to price pressures.
In 2001, Progressive was selected as a General Motors supplier of the year. At the time of its takeover, Progressive operated 13 plants in the United States and Canada.
