Rockford Products Files Bankruptcy While Seeking Buyer

Jason Sandefur

Slow automotive products sales and rising pension costs have pushed officials at fastener manufacturer Rockford Products Corp. to file for Chapter 11 bankruptcy protection while they look for a buyer\, the Rockford Register Star reports.
Founded in 1929 as Rockford Screw Products, Rockford Products makes ball studs, cold formed fasteners and other specialty products. The company, which has 515 employees, reported 2006 sales of $101 million.
As FIN reported in April 2007, Rockford Products completed a $20.5 million revolving credit line and a $7 million term loan.
“This financing will provide us with the necessary additional working capital needed to operate our business as effectively as possible,” CEO Ray Wood stated in April.
Three months later, Wood, who has led the company since shortly after the employee buyout in 1985, explained that the company “has been buried under debt since the buyout,” writes Alex Gary of the Register Star. “Although it has paid off many of those legacy costs, its growing pension liabilities and losses of key customers because of the slumping automotive and housing markets made its board realize the company could not continue without new capital.”
Wood said “the climax we”ve arrived at really started eight or nine months ago when we started looking for someone to buy the company. It was clear we couldn”t take this journey on our own any longer. It”s just too tough to compete globally with a company as undercapitalized as we are and the amount of capital it takes to expand outside of the United States.”
Rockford Products reportedly is $5.5 million behind on pension contributions, prompting the Pension Benefit Guaranty Corp. to place a lien in April. Rockford Products has 365 retirees plus about 260 still eligible for benefits.
Rockford Products has tried to grow globally. In April 2000 FIN reported on Rockford Products” alliance with Altenloh, Brinck & Co. of Germany and Osaka Rashi of Japan.
Last December the company sold its building and 38-acre site to a local developer, allowing it to refinance.
But the company lost a key $30 million contract when Whirlpool acquired Maytag in early 2006 and phased out Rockford Products as a supplier.
Wood is seeking a buyer committed to keeping the company in Rockford. �2007 FastenerNews.com