Modern Metal Products files for bankruptcy

LOVES PARK, Ill. - Hindered by the nationwide drop in auto sales, a northern Illinois auto parts supplier filed for Chapter 11 bankruptcy protection this week.

Modern Metal Products, based in Loves Park, owes more than $6 million to its top 20 creditors. The company primarily makes hinges for folding rear seats for Ford, Chrysler, General Motors and Nissan.

Revenue was about $60 million in the fiscal year ending in June but sales have dropped 40 percent since then, said David Ewing, the company's president.

"The U.S. automotive supply industry has experience a general downturn as a result of increasingly challenging economic factors," Ewing said in court bankruptcy papers filed Monday.

Those factors include plummeting vehicle sales, rising costs of raw materials, competition from markets abroad and a declining credit market, according to court documents.

Ewing said there was an interested buyer for the company, but the buyer had not found a financial institution to finance the deal.

"Finding a buyer is the best-case scenario," Ewing said. "But banks have their own issues and, in general, don't want to invest in the automotive industry."

The company employs about 245 people between three U.S. plants, according to court documents. It has reduced costs for months and trimmed some jobs.

Along with the Loves Park facility, the company has a metal plating division in Rockford and hinge-stamping division in Winsted, Conn. A handful of people are also employed at a facility in Juarez, Mexico.

Modern Metal is among the largest employers in Loves Park, just outside Rockford.

Rockford recorded the biggest jump in unemployment in the state in September 2008, to 8.8 percent from 5.8 percent a year earlier.

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