Collins and Aikman seeks bankruptcy protection

Collins and Aikman seeks bankruptcy protection

Troy, Michigan-based Collins and Aikman (C&A), one of the largest auto-part suppliers in the US, has filed for bankruptcy protection. The move is an attempt to gain immediate cash to fund its business operations. The company says it will continue to operate during the cash crunch crisis that it partly attributes to production cuts at US automakers. The bankruptcy is just another in a list of troubles for the US auto industry. High costs of steel and other raw materials have triggered a rush of production cuts at GM and Ford. The cuts have had a profound ripple effect on the rest of the industry. Meridian Automotive Systems, a leading supplier of front and rear end modules, instruments panel, and other interior systems, and Tower Automotive have recently filed for bankruptcy. Meanwhile, the nation’s largest auto parts supplier, Delphi, just yesterday reported more dour news on an accounting scandal enveloping the company. C&A employs about 23’000 employees in 17 countries. None of C&A’s foreign affiliates are included in the filing. Early indications are that C&A may not be able to reorganize and may have to eventually liquidate its assets.