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|Tuesday, August 26, 2008
Michigan Auto Supplier Cadence Innovation Files For Chapter 11 Bankruptcy
|TROY - Michigan auto supplier Cadence Innovation filed for Chapter 11 Bankruptcy reorganization in a Delaware Federal Bankruptcy Court, citing a changing US auto market driven by high gasoline prices that have changed vehicle segment mixes.
The US-based operations consist of six active manufacturing plants plus
various support facilities, all located in Michigan and Indiana. All of the
company's European operations are excluded from this restructuring.
Cadence is a $746 million automotive supplier offering
design, engineering, manufacturing, and assembly/sequencing solutions for
interior and exterior components, systems and modules in four areas --
instrument panels, interior trim, consoles and cockpits, painted exteriors
(including modules), doors/door modules and cargo management systems. The
company has approximately 4,200 employees in the United States, Hungary and
the Czech Republic and supplies its products and services to automotive
manufacturers around the world.
During the process, Cadence expects to maintain current
staffing levels at its plants and support facilities and will fund ongoing
operations from debtor-in-possession financing that is being used to
supplement its working capital.
This is a planned and voluntary Chapter 11 filing and as such the
company does not expect any disruption to the flow of product to our
"From day one, we have always prioritized the welfare of our
employees and the quality and delivery needs of our customers. We will
continue to manage the company in that fashion," said CEO Jerry Mosingo.
"The cause and effect in this situation is obvious and the cause is a
clear set of external factors -- collapsing revenue and material costs
increasing at double digit rates,” Mosingo said. “The Cadence team has managed the internal issues exceptionally, and in most cases, we were prepared in advance of the next OEM plant shutdown or price increase from our supply base. We find the need to file for bankruptcy protection as a dreadful development, particularly given the commendable efforts of our workforce and the many sacrifices the Cadence Innovation team has made. The reality is that this groundswell of external factors and environmental change exceeds the
flexibility of our business model.”
Cadence has been actively engaged in an effort to divest both its North
American and European based operations and these activities will continue
as the company moves through Chapter 11. While the bankruptcy filing
process under Chapter 11 has a defined path and finite timeline, the
divestiture process is not as predictable. As a result, the company cannot
comment on the likely, or potential, end-state of the company.
Author: Staff Writer