Milwaukee Journal Sentinal Online: “Up to half of the U.S. metal stamping plants that supply parts for the automobile industry could be out of business in six years, an industry attorney and trade group warned Thursday.
‘I think we are going to see some bankruptcies and quite a number of sales,’ said Craig Fitzgerald, a Southfield, Mich., attorney whose clients include automotive parts suppliers.
Some metal stamping plants are disappearing as their owners reach retirement age, said Bill Gaskin, association president.
“At least farmers can sell their land to fund their retirement,” Gaskin said. Some metal shop owners have to keep working past retirement age because no one wants to buy their businesses.
Lately, rising steel prices have sped the demise of metal fabrication shops that are already operating on thin profit margins. As steel prices have more than doubled this year, the shops haven’t been able to pass enough of the increases on to their customers.
“It’s a collision course for disaster,” said Marc Newman, a Rochester, Mich., attorney whose clients include automotive parts suppliers. Automakers are demanding price reductions for everything they buy, but their suppliers can’t get relief from higher expenses.
Rising steel prices have already forced some companies into bankruptcy. The urgency of the steel crisis can’t be overstated, according to the Precision Metalforming Association.
In 2003, 32% of the association’s 1,300 member companies lost money. It could be worse this year as companies face even thinner profit margins and struggle to keep their contracts out of the hands of foreign competitors.”
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