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Intermet seeks Chapter 11 reorganization

RADFORD — A downturn in automotive sales, particularly among SUV’s and other larger vehicles, has prompted Intermet, the parent company of the New River Foundry, to seek protection under federal bankruptcy laws.
Despite the filing, a spokesman for the company says foundry employees should not be concerned that they will not receive their paychecks.
“We’re going to continue operating as usual and continue to meet our customers’ needs,” said spokesman Gordon Cole.
According to its web site, Intermet is “one of the world’s foremost producers of cast-metal components for automotive and commercial-vehicle manufacturers.”
New River Foundry falls into the ferrous metal division of Intermet’s companies. Unfortunately, that division accounts for about 60 percent of the company’s revenues and “has been hit the hardest,” according to a court-filed declaration of William H. Whalen.
Whalen is vice president and chief financial officer of Intermet. He also serves as vice president, secretary and treasurer for its subsidiaries, including the foundry.
Intermet filed for the Chapter 11 reorganization earlier this week in U.S. Bankruptcy Court in Delaware, citing the economic downturn as the primary factor in its decision.
While Cole acknowledged the New River Valley plant did lay off 56 employees a week ago, he said the facility still has about 160 employees.
“This filing will provide the time we need to reorganize. We’ll continue operations as they are now and restructure ourselves” for the changed economy, Cole added.
He stressed that Intermet “is here for the long haul.”
Cole pointed out that gas prices have hit record highs during the past 60 days, thus turning consumers’ purchasing trends away from larger vehicles and SUV’s and to smaller automobiles with higher gas mileage.
According to Whalen’s declaration, Intermet is “one of the foremost independent suppliers of automotive cast components in the United States with over 160 years of manufacturing.” He goes on to say that the parts produced by Interment’s dozen manufacturing facilities located across the nation are used in almost every leading vehicle produced in North America.
The total employment at all 12 facilities was estimated at about 1,700 as of the first of August.
Intermet’s top customers include Chrysler LLC, Ford Motor Company, Honda of America Mfg. Inc. and Toyota Motor Manufacturing North America, among others.
Coupled with the downturn in the automotive market, Whalen said increases in scrap metal and other commodity prices “has squeezed profit margins across the industry.”
Therefore, he says, “consolidation within the automotive component industry is needed to align supplier capacity with increasingly lower customer requirements.”
Whalen said Intermet and its subsidiaries have taken steps to “maintain profitability” over the past two years, including streamlining operations; closing a facility in Pulaski, Tenn.; cutting more than half its employee base since December 2005; and obtaining new contracts.
“By and large, these measures have been successful,” the declaration states. However, Whalen goes on to say that the downturn in sales volume “has simply outpaced (the companies’) efforts to right-size their capacity and remain profitable.
“At present volumes, (Intermet) cannot operate profitably under the terms and conditions of many of their supply contracts.”
In order to continue operating while the restructuring takes place, Intermet is asking the court to allow it to use its existing funds to:
• Allow it to continue paying state and federal taxes;
• Allow it to continue paying its employees and maintain their benefits;
• Prohibit utility companies from discontinuing service;
• Be allowed to maintain workers compensation and other insurance policies;
• Be allowed to pay “certain contractors,” essential vendor claims, shippers and warehousemen to prevent them from refusing ongoing services; and
• Be able to reject supply contracts that prevent the companies from operating profitably.

According to Whalen’s declaration, Intermet companies have more than 2,500 potential creditors and “other parties in interest.”

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Intermet seeks Chapter 11 reorganization

RADFORD — A downturn in automotive sales, particularly among SUV’s and other larger vehicles, has prompted Intermet, the parent company of the New River Foundry, to seek protection under federal bankruptcy laws.
Despite the filing, a spokesman for the company says foundry employees should not be concerned that they will not receive their paychecks.
“We’re going to continue operating as usual and continue to meet our customers’ needs,” said spokesman Gordon Cole.
According to its web site, Intermet is “one of the world’s foremost producers of cast-metal components for automotive and commercial-vehicle manufacturers.”
New River Foundry falls into the ferrous metal division of Intermet’s companies. Unfortunately, that division accounts for about 60 percent of the company’s revenues and “has been hit the hardest,” according to a court-filed declaration of William H. Whalen.
Whalen is vice president and chief financial officer of Intermet. He also serves as vice president, secretary and treasurer for its subsidiaries, including the foundry.
Intermet filed for the Chapter 11 reorganization earlier this week in U.S. Bankruptcy Court in Delaware, citing the economic downturn as the primary factor in its decision.
While Cole acknowledged the New River Valley plant did lay off 56 employees a week ago, he said the facility still has about 160 employees.
“This filing will provide the time we need to reorganize. We’ll continue operations as they are now and restructure ourselves” for the changed economy, Cole added.
He stressed that Intermet “is here for the long haul.”
Cole pointed out that gas prices have hit record highs during the past 60 days, thus turning consumers’ purchasing trends away from larger vehicles and SUV’s and to smaller automobiles with higher gas mileage.
According to Whalen’s declaration, Intermet is “one of the foremost independent suppliers of automotive cast components in the United States with over 160 years of manufacturing.” He goes on to say that the parts produced by Interment’s dozen manufacturing facilities located across the nation are used in almost every leading vehicle produced in North America.
The total employment at all 12 facilities was estimated at about 1,700 as of the first of August.
Intermet’s top customers include Chrysler LLC, Ford Motor Company, Honda of America Mfg. Inc. and Toyota Motor Manufacturing North America, among others.
Coupled with the downturn in the automotive market, Whalen said increases in scrap metal and other commodity prices “has squeezed profit margins across the industry.”
Therefore, he says, “consolidation within the automotive component industry is needed to align supplier capacity with increasingly lower customer requirements.”
Whalen said Intermet and its subsidiaries have taken steps to “maintain profitability” over the past two years, including streamlining operations; closing a facility in Pulaski, Tenn.; cutting more than half its employee base since December 2005; and obtaining new contracts.
“By and large, these measures have been successful,” the declaration states. However, Whalen goes on to say that the downturn in sales volume “has simply outpaced (the companies’) efforts to right-size their capacity and remain profitable.
“At present volumes, (Intermet) cannot operate profitably under the terms and conditions of many of their supply contracts.”
In order to continue operating while the restructuring takes place, Intermet is asking the court to allow it to use its existing funds to:
• Allow it to continue paying state and federal taxes;
• Allow it to continue paying its employees and maintain their benefits;
• Prohibit utility companies from discontinuing service;
• Be allowed to maintain workers compensation and other insurance policies;
• Be allowed to pay “certain contractors,” essential vendor claims, shippers and warehousemen to prevent them from refusing ongoing services; and
• Be able to reject supply contracts that prevent the companies from operating profitably.

According to Whalen’s declaration, Intermet companies have more than 2,500 potential creditors and “other parties in interest.”

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