Friday, July 8, 2005

Turnaround expert takes over Collins & Aikman

Fred Macher, former Fed-Mogul chairman, seeks to revive supplier. Financing package OK'd.

By Brett Clanton / The Detroit News

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Auto interiors supplier Collins & Aikman Corp., turning to an industry turnaround expert to lead it out of bankruptcy, selected Frank Macher, former chairman of Federal Mogul Corp. and a past Ford Motor Co. executive, as its new CEO and president.

The Troy-based supplier announced several key management changes on Thursday, the same day it won approval in U.S. bankruptcy court for a critical $165 million financing package to keep the company afloat during reorganization.

The moves are the latest efforts to revive the company after a Chapter 11 bankruptcy filing in May, the abrupt resignation of chairman David Stockman and lingering questions about its accounting practices.

In Macher, Collins & Aikman gets an industry veteran who most recently presided over Southfield-based parts maker Federal Mogul while in bankruptcy protection. Macher has also been CEO of ITT Automotive and was vice president of Ford's automotive components division, which was spun off as Visteon Corp. in 2000.

In May, Macher was tapped to lead a Ford-controlled holding company overseeing under-performing Visteon plants, but the deal died when the automaker and Macher could not agree on employment terms.

On Thursday, Collins & Aikman also named turnaround specialist Stephen F. Cooper as chairman of its board, and added Leonard LoBiondo as a director. Both are principals at New York-based Kroll Zolfo Cooper, the supplier's turnaround management firm.

"We are delighted to have assembled this outstanding group of professionals to address the challenges now facing the company in its restructuring," said Marshall A. Cohen, the company's interim chairman. Cohen resigned on Thursday along with Charles E. Becker, the supplier's acting CEO.

The new management team scored its first victory on Thursday with the approval from bankruptcy court of a new financing package. Some creditors had challenged the package and said they want the supplier to pay debts by liquidating some assets.

The financing package -- from Ford, General Motors Corp., DaimlerChrysler and several Asian automakers -- includes an $82.5 million loan and allows for 15 percent price increases on parts that equals another $82.5 million. In addition, it provides up to $140 million for launch costs.

But automakers such as GM are taking steps to line up other suppliers in the event that Collins & Aikman goes under.

"It's only prudent for GM to take whatever steps they can to prepare for the possibility that the company won't be able to continue to do business," said Robert Weiss, an attorney representing GM.

You can reach Brett Clanton at (313) 222-2612 or bclanton@detnews.com.