Troy, MI, April 10, 2006--Auto Interiors supplier Collins & Aikman Corp., said it plans to exit the automotive fabrics business, which would result in about 1,200 job cuts.
The company said it intends to close down four of its plants in North Carolina and try to sell its fifth plant located in Texas, which would require approval from a bankruptcy court in the US. Despite the initiative to reduce costs and improve productivity, the company added that its fabrics business had failed to compete effectively.
Spokesman David Youngman said the company’s fabrics business had deteriorated steadily over the last few years and its revenues were expected to decline from close to $210 million in 2005 to $150 million this year. Collins & Aikman’s president and CEO Frank Macher said exiting the automotive fabrics business was a difficult, yet necessary decision.
According to the company, the business has been severely crippled by rising raw-material prices and competition from companies operating in countries with lower wages. However, the company said it would continue to make carpeting, cockpits and convertible tops.
Collins & Aikman has been closing plants, cutting jobs and selling unwanted business units for the past year, as they try to reach their goal of emerging from bankruptcy by September.
