Collins & Aikman

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Collins & Aikman Corporation
Defunct
Industry Auto Parts
Founded 1891
Headquarters Southfield, Michigan, USA
Products Automotive interior components, systems and modules, plastic components and cockpits, soft trim and convertible roof systems, instrument panels, fully assembled cockpit modules, floor and acoustic systems, automotive fabric and interior trim, exterior trim and trim set, backlights, and tonneau covers and power actuating systems
Revenue Increase$3.983 billion USD (2005)
Decrease$102.00 million USD (2005)
Decrease$57.00 million USD (2005)
Number of employees
14,000 (2006)

Collins & Aikman Corporation was an automotive manufacturer of cockpit modules and automotive floor and acoustic systems and a supplier of instrument panels, automotive fabric, plastic based trim and convertible top systems. The Company's operations spanned 15 countries, incorporating about 120 facilities and approximately 25,000 employees. It entered Chapter 11 bankruptcy on May 17, 2005 [1] and went out of business on October 12, 2007.

Business summary[edit]

Collins & Aikman Corporation (C&A) was engaged primarily in the design, engineering and manufacture of automotive interior components, systems and modules. The company supplied products from three main categories: plastic components and cockpits, soft trim and convertible roof systems. Its products included instrument panels, fully assembled cockpit modules, floor and acoustic systems, automotive fabric and interior trim, as well as exterior trim and trim set, backlights, well slings, tonneau covers and power actuating systems.

In North America, Collins & Aikman manufactured components for approximately 90% of all light vehicle production platforms. Sales were primarily made to North American-based original equipment manufacturers (OEMs), as well as Asian- and European-based OEMs. It conducted all of its operating activities through its wholly owned subsidiary Collins & Aikman Products Co.

Decorative Fabric group[edit]

Collins & Aikman was also involved in the manufacturing of decorative fabrics and in 1976 acquired Mastercraft Corporation of Spindale, North Carolina, the world's largest maker of woven Jacquard fabrics. Andrew Major, Mastercraft's owner, would become president of the Collins & Aikman Decorative Fabric group, overseeing its seven plants and 6000 employees.[2]

Entering into Bankruptcy[edit]

In early 2005 the firm had to review its 2004 results due to accounting problems. It then suffered a liquidity crisis which resulted in the ousting of the chairman and CEO, David Stockman, in early May, followed by the Chapter 11 filing.

This was followed in July 2011 by a British High Court ruling which put 24 C&A companies across 10 European countries into English administration proceedings, recognising that these companies operated as a cohesive unit and would need to be dealt with holistically.[3]

SEC Lawsuit[edit]

On March 26, 2007 the SEC filed civil fraud charges against C&A, David Stockman and eight other former C&A directors and members.[4] The suit alleged that C&A had inflated its quarterly earnings from the end of 2001 to 2005, by using "round-trip" transactions with Elkin B MacCallum, a member of C&As board, and a supplier to C&A, to falsely increase reported indirect income. It then engaged in other acts of false accounting to further increase its reported earnings.[5]

The SEC settled with five of the defendants in 2010, with the settlement including David Stockman paying $7.2 million in settlement.[6] As a result of the case a judge found that the SEC is entitled to no special treatment regarding its discovery obligations when it initiates litigation.[7]

References[edit]