Possible buyer would keep Salem plant

The lone purchase offer for Blackhawk Automotive was lower than expected.

By DON SHILLING

VINDICATOR BUSINESS EDITOR

YOUNGSTOWN — The Illinois company trying to buy Blackhawk Automotive Plastics intends to close its plant in southern Ohio and retain its Salem plant.

A lawyer for Blackhawk disclosed part of the operating plans of Flex-N-Gate Corp. in a hearing Wednesday in federal bankruptcy court in Youngstown.

Operations at the plant in Mason, near Cincinnati, would be consolidated into the Salem plant, which employs 700. Blackhawk makes plastic parts for cars and trucks.

Judge Kay Woods is to rule on Blackhawk’s proposal to sell its assets to Flex-N-Gate for $16.46 million.

William Schonberg, a lawyer for Blackhawk, said the company expected a bankruptcy sale to produce a higher price for the business. Difficult market conditions and the bankruptcy filings of two other large automotive plastic suppliers held down the price, he said.

He argued, however, that it would be better to sell the business to Flex-N-Gate instead of selling off the assets piecemeal. He said that process would produce an uncertain result and it would not retain Blackhawk as an employer, taxpayer and supplier.

Lenders, who are owed $30 million, didn’t oppose the sale but reserved their rights to object. The creditors committee didn’t object either but suggested the judge should test the deal before its approval.

Schonberg said the company was extensively marketed. Management met with 25 potential bidders, he said.

Only one other company besides Flex-N-Gate, Magna International, attended an auction Monday with the intention of bidding on all of Blackhawk’s assets, he said. Lawyers were unable to resolve some disagreements about closing conditions, however, and Magna didn’t make a bid, he said. Magna is a Canadian-based automotive supplier than employs 84,000 worldwide.

With no other bidders besides Flex-N-Gate, Blackhawk believes it has the best bid possible, Schonberg said.

If the sale is approved, Flex-N-Gate would take over Blackhawk’s operation March 14. Flex-N-Gate makes metal and plastic parts for vehicles. Automotive News, a trade publication, estimates that it had sales of $889 million in 2006.

Blackhawk had sales of $136 million last year and is a supplier to General Motors, Ford and other companies.

shilling@vindy.com