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 Industry ills cause third supplier bankruptcy this year

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Registration date : 2009-02-06

PostSubject: Industry ills cause third supplier bankruptcy this year   Sun Feb 08, 2009 2:26 am

Industry ills cause third supplier bankruptcy this year

Ryan Beene
Crain's Detroit Business
February 7, 2009 - 12:01 am ET

Automotive supplier Fluid Routing Solutions Inc. today filed for Chapter 11 protection in U.S. Bankruptcy Court in Delaware.

The financial troubles facing the Detroit 3 and the global economic crisis pushed the board of directors of Fluid Routing Solutions to opt for a sale of the company's fuel-related business and a liquidation of remaining U.S. assets, according to court documents.

Fluid Routing's parent company and two other affiliates also filed for Chapter 11 protection.

So far this year, three major U.S. auto suppliers have filed for bankruptcy protection, including Checker Motors Corp. and Contech LLC. Last year, at least eight major auto suppliers filed for protection, but exact figures are unavailable.

Fluid Routing Solutions supplies power-steering components, fuel-handling components, fuel fillers and extruded hoses. The company employs about 1,700 people at five locations in North America, including its headquarters in suburban Detroit. Other operations are in Michigan, Tennessee, South Carolina and Florida.

Fluid Routing Solutions, which supplies General Motors, Ford Motor Co., Chrysler LLC and Toyota Motor Corp., posted $211.5 million in revenue in 2008.

Significant drops in vehicle production and changes in U.S. vehicle segment mix dragged company revenue, while raw material costs rose. Those factors, combined with weak credit markets, caused Fluid Routing Solutions to seek court protection, CFO John Curson said in an affidavit.

Fluid Routing Solutions is "almost completely dependent" on the U.S. auto industry as its source of revenue, Curson said in his affidavit.

The company asked the court to approve $12 million in debtor-in-possession financing, funded by Sun Fluid Routing Finance LLC, to allow Fluid Routing Solutions to operate as it liquidates.

In court documents, the company said it was unable to find financing from other sources.

Fluid Routing Solutions was founded in 2007 after an affiliate of the private investment firm Sun Capital Partners Inc. bought a division of Dayco Products Inc.
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