Automotive components manufacturer Intermet Corp. has filed a petition for creditor protection with the U.S. Bankruptcy Court in Delaware — the second resort to Chapter 11 reorganization for the foundry and diecasting group in less than four years. In September 2004, Intermet filed for bankruptcy, citing then a sudden rise in raw material costs. In the current situation, it cites declining revenue and cash-flow problems that have mounted in the past 60 days — which it attributes to “unprecedented low automotive sales volumes and high commodity prices.”
According to a release, the current reorganization is intended to “allow the company to continue normal operations while it reorganizes its financial and operating structure.” It has hired a financial advisory firm and is negotiating debtor-in-possession financing to provide funding that will allow it to continue to meet obligations as it restructures.
Intermet has been actively reconfiguring its organization for most of the past three years since its exit from the last bankruptcy, including numerous personnel changes, reconfiguring its operations around three manufacturing groups (ferrous foundries, diecastings, and PCPC or pressure/counter-pressure casting), consolidating capacity, and a concerted effort to adopt Lean Manufacturing processes.
Now, Intermet has named a new president and CEO, Bob Tamburrino, to replace Jeff Mihalic, who has resigned but will remain as a consultant to the organization. Mihalic had been president and CEO since 2006, having been installed by a majority investor group as interim president following the previous Chapter 11 reorganization.
"Intermet has worked hard and made impressive gains in efficiency, profitability, and quality," according to Tamburrino. "The Intermet team has accomplished this through company-wide implementation of Lean, significant overhead cost reductions, and capital investment that have created a solid foundation for long-term success. We intend to build on that success and be around for the long haul."