7/18/2011 12:06:00 PM
HEADLINES
Cardinal Fastener Files Chapter 11, Suspends Operations
New ownership possible as company reorganizes
Grabner: Cardinal Still Profitable
In an emailed statement to the Cleveland Plain Dealer, Cardinal CEO John Grabner described the bankruptcy filing as “largely as a result of an impasse in negotiations with Wells Fargo, our primary lender, regarding working capital financing.”
Grabner said Cardinal’s revenue is growing and the company remains profitable on an operating level.
“We have been working with our lenders to secure more flexible working capital arrangements for some time and would certainly have preferred to keep this out of the courts, but this action ultimately provided an appropriate forum to restructure and provide for our future growth,” the Plain Dealer quoted Grabner.
Cardinal Fastener & Specialty Co. filed for bankruptcy on June 30, days after CEO John Grabner’s company said imports were hurting American manufacturers involved in wind energy.
When Cardinal Fastener emerges from Chapter 11, the company likely will have a big new investor — if not a new owner, Crain’s Cleveland Business reports.
Cardinal Fastener filed for Chapter 11 protection from creditors on June 30 in U.S. Bankruptcy Court in Cleveland. The filing shows Cardinal Fastener had been borrowing heavily.
In a June 28 Cleveland Plain Dealer article, vice president Jeff Grabner noted that Cardinal Fastener grew from 35 employees in 2007 to 65 last year, but recently cut back to 50.
• Under a headline, “Ohio’s Struggling Manufacturing Sector Finds Clean Energy Clientele,” SolveClimateNews this spring described Cardinal as “a poster child for Ohio’s manufacturing revival, with a new wind energy division that now makes up almost half its revenues.”
Cardinal nearly doubled its revenues in four years with wind energy fasteners.
Cardinal was supplying more than a dozen wind turbine builders, including the Danish wind manufacturer Vestas and the Spanish Gamesa SA. Customers also included more than 100 global suppliers involved in fabrication, transportation, construction and maintenance of 8,000 parts needed in wind turbines, Maria Gallucci of SolveClimateNews reported.
• Grabner has been a leading advocate for lean manufacturing and spoken at sever al fastener industry events about Cardinal Fastener’s lean efforts. Cardinal Fastener adopted the Toyota Production System lean program in 1998.
• Cardinal Fastener gained international attention when Barack Obama toured Cardinal’s plant on January 16, 2009, enroute to his inauguration. Obama touted Cardinal Fastener’s domestic manufacturing of wind energy industry fasteners.
• In May Cardinal Fastener received the Leading Edge Award from the Entrepreneurs Edge in Northeast Ohio.
In the filing, the company states it has assets of between $1 million and $10 million and liabilities in the same range. The 20 largest unsecured creditors are owed more than $2 million.
The two largest creditors listed were Jim Meathe of Atlanta and Robert Boykin of Huntersville, N.C., at $250,000 each in loans, according to the filing.
The largest corporate creditors are Chicago-based Kreher Steel Co., $240,470 and Metal Improvement Co. of Pittsburgh, $173,884.
Crain’s Cleveland listed individuals Al Adams and John Reed of Walton Hills, each at $150,000 as the largest creditors in Cleveland.
Suppliers include Pro Metals LLC, $114,685; MT Heat Treating, $59,622; Earnest Machine Products, $51,685; and Jergens Industrial Supply, $30,409.
Reaction to Filing
“You’re kidding,” creditor Jack Schron told reporter Dan Shingler of CrainsCleveland.com when told of Cardinal Fastener’s bankruptcy. “It’s a big surprise. I thought they were doing well,” Schron said. “They were getting a lot of publicity for doing very well in the wind energy field.”
Schron is CEO of Jergens and a county councilman.
Grabner acquired the machinery of a closed fastener plant to open Cardinal Fastener in 1983.
Cardinal Fastener specialized in hot forged bolts used to build oilrigs, bridges, trains and construction machinery.
Grabner has been active in the Industrial Fasteners Institute and on the board of the American Wind Energy Association.
Cardinal Fastener is located at 5185 Richmond Rd., Bedford Heights, OH 44146. Tel: 216 831-3800 Web: cardinalfastener.com ©2011 GlobalFastenerNews.com
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