DETROIT (AP) — An auto supplier that once made pieces for almost every U.S.-built car is closing after completing the sale of its last major operations to a private equity group led by billionaire Wilbur Ross.
Collins & Aikman Corp. got into trouble under the leadership of ex-Reagan administration budget director David Stockman, who took it on an expansion drive on the eve of a big downturn in the U.S. auto industry. He is awaiting trial on charges of hiding the company's woes from investors.
Last week, Ross-led International Automotive Components completed acquisition of the soft trim operations of Collins & Aikman, which has been operating under Chapter 11 bankruptcy protection for two years.
Once a top supplier to the Detroit Three automakers, the 116-year-old company got in trouble by going on a buying binge with borrowed money earlier in the decade, said auto analyst David Cole.
Company executives, he said, gambled that the auto industry's problems weren't as serious as they proved to be — and lost.
''This is just life in the fast lane,'' said Cole, chairman of the Center for Automotive Research in Ann Arbor. ''A lot of people learned some lessons here. In one way you get rich, and in another, you go out of business.''
The operations sold Thursday include 16 North American plants that make carpeting, molded floors, dash board parts and other interior vehicle components.
In all, 4,150 people work at the plants and at a Saltillo, Mexico, plant that Ross' company also bought from Collins & Aikman. The operations generated $600 million in annual sales.
''We look forward to integrating the talented C&A employees into our organization as we move forward to further improve our business,'' said Jim Kamsickas, president and chief executive of International Automotive's Dearborn, Michigan-based North American division.
The new owners have no immediate plans for job cuts, said spokesman David Ladd.
Collins & Aikman filed for Chapter 11 protection in 2005 and said in November that it was selling off or shutting down its operations.
Collins & Aikman formed in 1891 as an upholstery manufacturer. In 2005, it provided automotive flooring, fabric, instrument panels and other equipment to General Motors Corp., Ford Motor Co. and Chrysler, as well as to Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. Its products appeared in 90 percent of the vehicles sold in North America, according to the company's Web site.
The sale covers the last remaining significant operations, and the Southfield-based company will proceed to liquidate and make payments to creditors, said spokesman David Youngman, whose last day of work was Friday.
Neither company disclosed the price, but it was listed as $134 million (euro94.55 million) in regulatory proceedings before the European Commission.
A federal indictment unsealed in March accused former chairman Stockman and four other ex-officials of widespread fraud that concealed the company's financial problems before it filed for bankruptcy. Stockman has denied the charges.
Stockman resigned a week before the bankruptcy filing. The former Republican congressman from Michigan served as White House budget director during President Ronald Reagan's first term.
Not long ago, Collins & Aikman was one of the top 15 auto suppliers in North America. It reported total sales of $3.98 billion in 2004 — 431st on the Fortune 500.
International Automotive is owned 75 percent by Ross' WL Ross & Co. LLC and by Franklin Mutual Advisers LLC. The remaining 25 percent is owned by Lear Corp., according to its Web site. Its North American division now has about 17,000 employees, Ladd said.