FRANKFURT (Reuters) – Car roofing specialist Edscha filed for insolvency for its European sites on Monday, making it the first major German auto parts supplier owned by private-equity to have to reorganise under an administrator due to the global industry crisis.
“The most important goal is that the operative business continues and we expect to be able (to) meet all of our obligations to all the customers we supply,” a spokeswoman for Edscha said, adding that the company also wanted to retain as many of the 4,200 jobs affected by the move as possible.
“Edscha should not disappear from the market.”
The debts incurred by its leveraged buyout through Carlyle [CYL.UL] in late 2002 “was not responsible” for the insolvency filing since the company finished its fiscal year 2007/08 to end-June with record revenue of 1.08 billion euros ($1.38 billion) and a gearing that continued to allow for investment.
Instead, a massive slump in car sales has forced virtually every carmaker and supplier to lower their profit forecasts, cut jobs, reduce working time or suffer losses.
The Asian and American operations, which employ the remaining 1,600 workers, were not affected.
A spokesman for BMW (BMWG.DE) said Edscha was an important supplier of roofing systems for the Z4 roadster, 3 Series and 6 Series cabriolets as well as the Rolls-Royce Phantom Drophead Coupe models. It also makes door hinges for practically all of the group’s vehicles.
“We always try to help out our suppliers when possible, but in the case of Edscha, the volume of funds required were in a dimension where we simply could not assist,” he said.
The global crisis in the automotive industry forced Honda Motor Co (7267.T) to reduce its profit forecast for the fourth time this year while Toyota (7203.T) expects to suffer a greater-than-expected loss.
Even the highly successful managers at Porsche SE’s (PSHG_p.DE) core sports car business will cease production for an additional 19 days at the main Zuffenhausen plant, following a 27 percent drop in vehicle sales in the first fiscal half. ($1=.7827 Euro) (Reporting by Christiaan Hetzner; editing by Simon Jessop)