Automotive fabric supplier Collins & Aikman Corporation (CKCRQ) announced that it will exit the automotive fabrics business, pending approval by the US Bankruptcy Court.
The action will affect three plants in Roxboro, North Carolina, as well as plants in Farmville, North Carolina and El Paso, Texas that will continue to operate as the business is transitioned to other suppliers.
This action will impact approximately 1,200 Collins & Aikman employees. During the exit process C&A will continue to evaluate the potential sale of certain portions of the fabrics business to interested parties while working to ensure seamless transition for its customers.
"Despite the tremendous efforts of those within our fabrics operations to reduce costs and improve productivity, this segment of our business has simply been unable to compete."
"Certain styles of textiles heavily invested by the Company have fallen out of favor with consumers, raw material prices have escalated and manufacturing has moved outside the United States," said Gerald Jones, Executive Vice President of Collins & Aikman's Fabrics business.
"In the coming months, we will work diligently to ensure our employees impacted by this event are treated fairly, and to fully support our customers as they transition to other suppliers."
Frank Macher, President and CEO of Collins & Aikman, also stated, "A key component of our reorganization strategy is to ensure our asset portfolio consists of high-potential businesses in our core competencies that can consistently deliver acceptable returns."
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