8/15/2016 11:53:00 AM
HEADLINES
Rockford Products Closing, Laying Off 171
Rockford Products is closing, leaving 171 employees without jobs.
“We regret to inform you that circumstances will force Rockford Products LLC to conduct a mass layoff in the coming days,” CEO Dave Richeson wrote in “WARN” letter to the state of Illinois. Rockford announced plans to lay off 171 people permanently by the end of September 2016, according to the Rockford Register Star.
The cold-formed fastener manufacturer was acquired in 2007 for $23.2 million in a bankruptcy auction by Michigan-based BlackEagle Partners LLC, a private equity firm.
Subsequently BlackEagle had invested $30 million “without seeing any return on the investment” and the fastener manufacturer has defaulted on payments, according to local TV station WREX.
Rockford Products filed the Worker Adjustment & Retraining Notification Act letter with Illinois. The U.S. Department of Labor requires that companies with 100 or more employees send WARN letters 60 days ahead of plant closings and layoffs to affected employees and state and local governments.
Richeson told WREX that sales weakened and forced the manufacturer into default.
Rockford Products is seeking a buyer and some parties have shown interest, Richeson told WREX. There is no time line for a sale, he added.
RockfordProducts.com states that “Since being acquired by Black Eagle Partners, we have a reinvigorated dedication to continuous improvement, implementing lean manufacturing principles, a broader international distribution network and a firmer commitment to safety, quality and on-time delivery of high-volume, premium cold-headed parts. We like to say that we’re headed in the right direction.”
“I would say their biggest problem was probably mismanagement not having somebody or the right leadership in position to run the company profitably,” Rockford Area Economic Development Council VP of Development Stacy Bernardi told local TV station WREX.
Bernardi told the Register Star that there has been talk of potential buyers for Rockford Products but no announced takers. She said that a buyer could keep the plant operating, or buy machinery and other assets to move elsewhere.
BlackEagle has not inquired about economic incentives to keep Rockford Products going, Winnebago County Board Chairman Scott Christiansen, whose grandfather worked for Rockford Screw Products, told the Register Star.
“To me this is a classic case where an equity firm comes in and is milking it for everything it’s worth,” Christiansen said.
Christiansen told WREX it is disappointing to see a local company close and “especially a long standing company like that that was part of the whole industrial revolution that made Rockford.”
“I think we do have enough openings in the fastener industry,” Christiansen said of jobs for Rockford Products’ employees. “We still have like 10,000 people working in the fastener industry, which is quite amazing.”
BlackEagle was formed in 2005 and is headed by managing partner Michael Madden.
BlackEagle.com states the firm provides capital, upgrades management and sales teams, seeks new market opportunities, cuts costs and streamlines operations.
The private equity firm considers “well-performing companies as well as complex situations (non-core subsidiaries, bankruptcies, and restructurings) caused by operational or financial challenges,” according to the website.
BlackEagle invests in “lower mid-market companies up to $15 million EBITDA. The companies are niche manufacturers or value-added distributors in automotive, general industrial, building products and oil & gas industries. Web: BlackEaglePartners.com
Founded in 1929 as Rockford Screw Products to make fasteners for the then-local furniture industry, today Rockford Products manufactures cold-formed components, engineered fasteners, ball joints and custom formed parts for the automotive, agriculture, industrial, off-highway and commercial vehicle customers. It is certified to ISO/TS 16949, ISO 9001 and ISO 14001. The company also provides heat treatment, tool manufacturing and finishing operations.
Rockford Products operates a 580,000 sq ft plant leased from Harrison Kishwaukee LLC. It is located at 707 Harrison Ave., Rockford, IL 61104-719. Tel: 815 397-6000 Email: info@RockfordProducts.com Web: RockfordProducts.com
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