Blackhawk seeks bankruptcy protection

The company failed in
attempts to gain
investments or new loan terms.

By DON SHILLING

VINDICATOR BUSINESS EDITOR

YOUNGSTOWN — Blackhawk Automotive Plastics, which employs about 600 in Salem, has filed for bankruptcy protection and is arranging financing to continue operating.

A hearing is set for Nov. 7 in U.S. Bankruptcy Court in Youngstown to consider the company’s plans for borrowing money to fund operations. The plan received interim approval Tuesday from Judge Kay Woods.

Without the proposed financing, the company would be forced to shut down, Clifford Croley, Blackhawk chief executive, said in an affidavit filed with the court.

Blackhawk filed for bankruptcy protection Monday under Section 11 of the federal bankruptcy code, which allows a company to operate while it is reorganizing.

Before filing, Blackhawk tried to renegotiate the terms of its existing loans and secure outside investments but was unsuccessful, Croley said. Bankruptcy laws provide lenders with added protection for loans made after a bankruptcy filing.

Croley said Blackhawk started having cash flow problems last November when vendors stopped allowing the company to have 30 or 45 days to pay for supplies. In some cases, vendors were demanding cash in advance of shipments.

Blackhawk supplies plastic interior and exterior parts that are used in vehicles such as the Ford F-150, Ford Explorer and Chevrolet Impala.

The company employs nearly 1,600 at plants in Salem and Mason, Ohio, and at a technical center in Michigan. It recently closed a plant in Upper Sandusky, Ohio.

Blackhawk is a subsidiary of Tier e, which was formed in 1999 to acquire Blackhawk from Worthington Industries. At that time, the company was named Warren Custom Plastics.

Tier e also owns 49 percent of Nescor Holdings, the holding company for Nescor Plastics Corp., an automotive supplier based in Mesopotamia.

shilling@vindy.com