Amcast Back in Chapter 11

Problems with GM cited in return to creditor protection

According to local news reports, Indiana-based Amcast Industrial Corp. filed for Chapter 11 bankruptcy December 1. Amcast is the company formed this past August following an earlier bankruptcy and reorganization process.

Amcast produces aluminum wheels for cars and light trucks, as well as aluminum castings for automobile suspension and brake systems. The previous Amcast organization had various other product lines, the operations of which were sold off prior to the last bankruptcy filing. The last filing came on November 30, 2004, and the reorganization was concluded on July 29, 2005. At that time, the company’s strategy was to use its three plants in Fremont, Gas City, and Franklin, IN, to serve automotive customers exclusively. General Motors Corp. had recently renewed its purchase agreements with the reorganized company.

GM is the source of the latest problem, according to reports. The automaker is said to represent as much as 80% of Amcast’s business, but it has been cutting its current production programs and has indicated it will not be assigning new business to Amcast.

One report also states Amcast has been unable to renegotiate the supply terms for the wheels it supplies for the Chevrolet Corvette, a program that has been losing money.

Reportedly, Amcast intends to reorganize with a new emphasis on short-term earnings and cash flow, allowing it to pay its creditors, as opposed to the long-term customer-supplier relationship it relied on with GM.

In its filing, Amcast estimates it has 100-199 creditors, total assets of $16.2 million, and total debts of $20.5 million.

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