Why the wheels fell off at Amcast and what it means for aluminum
Dec 09, 2005 | 03:04 PM
| Rory Carroll
The struggles of the U.S. automotive industry have taken another scalp, leaving aluminum die casters under increasing pressure to figure out how to survive as their biggest customer shrinks its stateside business.
The Chapter 11 bankruptcy protection filing by aluminum automotive wheel and castings supplier Amcast Industrial Corp., Fremont, Ind., has been a wake-up call to the die-casting industry, which sources say is at a crossroads. Die casters are now grappling with the question of whether they can, or should, try to rely less on the volatile auto industry.
Amcast blamed its loss of business on struggling automotive giant General Motors Corp., which accounts for about 80 percent of its' revenue.
Amcast's filing is unusual because it marks the company's second bankruptcy protection filing this year. Normally, a company wouldn't emerge from Chapter 11 unless a judge believed it had successfully renegotiated its contracts. In this case, apparently everyone was fooled.Amcast attorneys said that the previous reorganization was based on a plan that assumed payments would continue from Detroit-based GM and that new programs would be forthcoming. "Neither of these assumptions has proven true," they said. "Not only has GM cut back on existing programs in some areas, but has also told Amcast that no new business would be given to Amcast and existing programs would be migrated away from Amcast in the coming months."....
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