Wheel OEM Accuride’s US Operations Near Bankruptcy Exit
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Wheel manufacturer Accuride Corp. expects its U.S. operations to exit bankruptcy proceedings in the coming weeks following a Feb. 11 hearing.
Accuride’s U.S. and Canadian businesses filed for Chapter 11 bankruptcy protection in October with liabilities of between $500 million and $1 billion, with the North American freight downturn of the past couple of years taking part of the blame for lower-than-expected demand for its products.
The restructuring will allow the company to emerge from court protection with a substantially smaller debt load.
Lenders provided $30 million in debtor-in-possession (DIP) financing during the restructuring. DIP financing is a loan that allows a company to keep paying its bills.
Livonia, Mich.-based Accuride said a 10 a.m. EST Feb. 11 confirmation hearing with the U.S. Bankruptcy Court for the District of Delaware would be held on the plan of reorganization for the company’s U.S. operations.
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The U.S. operations were then expected to exit bankruptcy protection thereafter, Accuride said.
Accuride operates manufacturing plants in Erie, Pa.; Henderson, Ky.; Rockford, Ill.; and Springfield, Ohio.
The company’s Mexican operations were not part of the bankruptcy filing. Accuride operates manufacturing plants in Cienega de Flores and Escobedo in Mexico.
But once the U.S. operations exit bankruptcy protection, those assets and the Mexican operations will be part of the same entity, a company spokesman said in an email. The new company will have 1,100 employees, compared with 1,600 staff prior to the reorganization, he added.
Accuride expects to become “a North American wheel company with a significantly deleveraged balance sheet, well-positioned for long-term growth and to continue supporting its customers and suppliers,” the company said Feb. 5.
A restructuring of Accuride’s European and Asian operations remains ongoing.
“Accuride and our North American affiliates remain focused on serving our customers as we continue advancing through our restructuring process to optimize our balance sheet and put us on a path for long-term growth,” said Robin Kendrick, Accuride CEO.
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“While we recognize that [Accuride Wheels Europe & Asia’s] restructuring process represents a change in our go-forward strategy, we are confident the restructuring process in Germany presents the best path forward for our European business, our continuing progress through our restructuring in North America, and all our stakeholders,” Kendrick added.
As a result of Accuride’s separation of its North American and assets elsewhere around the globe, two manufacturing plants in Germany asked for court protection after filing for insolvency.
German insolvency proceedings are akin to Chapter 11 bankruptcy in the U.S.
Accuride said the weakness of the truck market in Europe led to Accuride Wheels Solingen and Accuride Wheels Ronneburg seeking court protection Feb. 5. An insolvency administrator was appointed by the court on Feb. 7.
Traton’s MAN Truck & Bus division sold 18% fewer vehicles in 2024 than in 2023, with truck demand in Germany and Eastern Europe particularly weak; Volvo Group’s Volvo and Renault brand heavy-duty truck sales fell 13% in Europe in 2024; while Daimler Truck cut its outlook for 2024 in August, based partly on weak sales in Europe.
Accuride also operates manufacturing plants in Troyes, France; Jining, China; Bilecik, Turkey; and Togliatti and Zainsk, Russia, alongside the German facilities.
The company’s Canadian operations, including a manufacturing plant and distribution center in London, Ontario, are in the process of being wound down, the spokesman said.
