Auburn, Indiana, Welcomes Foundry Reopening

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Researched by Industrialinfo.com (Industrial Information Resources; Houston, Texas). Metal Technologies Auburn LLC (Auburn, Indiana), a subsidiary of Metal Technologies Group (Auburn, Indiana), recently announced that it had bought the defunct Auburn Foundry Corporation's assets out of Chapter 11 bankruptcy in April 2005 for $9.7 million, from the highest bidder at bankruptcy auction, Summitbridge (Denver, Colorado). Summitbridge came through with the winning $12 million offer in June 2005, which has recently been accepted by the court, after Summitbridge agreed to pledge $25,000 toward the cleaning up of two landfills that had belonged to Auburn Foundry, but were not a part of the sale. The older of the two plants, the previously-closed downtown Plant One, is being sold for $3 million to an unnamed bidder and Metal Technologies has bought the newer of the two plants, Plant Two, for $9.7 million.

After ten years of doing business in Auburn, Indiana, Auburn Foundry opted for Chapter 11 bankruptcy in February 2004, limping along until it finally closed its remaining operational plant's doors on Friday, May 13, 2005, laying off about 250 workers. Auburn Foundry consisted of two plants in Auburn, the older one of which had previously been closed in October 2004, as part of an earlier reorganization strategy to consolidate operations at the newer site. The company said at that time that it would close the remaining plant, if a buyer could not be found.

Under Metal Technologies, the Auburn, Indiana, foundry will be known as Auburn Works One (a machining operation) and Auburn Works Two (a casting operation). The company is presently hiring about 150 new employees in DeKalb County, and has said that it intends to begin limited production in a week or so.

The U.S. foundry and metal castings industry has found itself in a life-and-death struggle since the turn of this century. Hundreds of foundries have gone out of business in recent years, due to unrelenting pressure from cheap imports, the loss, through either closing or relocation to cheaper countries, of many large client manufacturers, and the skyrocketing costs of raw materials and utilities. Foundries are a vital and inextricable part of industry. Foundry products are used in about 90% of all manufactured goods. Two of the nation's largest cast parts makers, Citation Corporation (Private) (Birmingham, Alabama), with seventeen foundries and 5,100 employees, and Intermet Corporation (NYSE:INMTQ ) (Troy, Michigan), with seventeen foundries and 6,000 employees, filed for bankruptcy protection in 2004.

Six of the U.S.'s top ten foundries have filed for bankruptcy protection over the past four years, and about about fifty U.S. foundries are closing in the United States each year, according to the American Foundry Society. Over the past twenty years, more than 1,000 foundries have disappeared, about 30% of the total, to approximately 2,380 foundries.

There are, in contrast, an estimated 12,000 foundries in China, which is presently gobbling up prodigious quantities of the world's steel and iron and other minerals, and which sells its forged products to the U.S. at half the price U.S. forges can produce them, in spite of the fact China pays the same prices for raw materials as U.S. forges do. Lower labor and energy costs obviously account for the lion's share of that discrepancy, of course, but one has to wonder how wildly escalating shipping and logistics and customs costs will affect these Chinese foundry product imports in future. It doesn't hurt China's interests that the yuan has been pegged unfairly to the U.S. dollar (it is approximately 45% undervalued, in spite of the recently announced, fatuously-touted cutting lose from the dollar, with an ineffective and artificial 2% limit on value increase, which makes sheer mockery of principles of fair play, not to mention of China's agreement to abide by the rules when it joined the WTO). U.S. foundries that have upgraded equipment and machinery can no longer afford to compete in this rigged atmosphere.

Metal Technologies Auburn LLC (MTA) employs over 1,900 workers in ten facilities worldwide. MTA has two facilities in West Allis, Wisconsin, an 85,000-ton-a-year ductile iron foundry and a 63,000-ton-a-year gray iron foundry. In Three Rivers, Michigan, the company has a 93,000-ton-a-year gray iron foundry (formerly Dock Foundry) and a 45,000-ton-a-year ductile iron foundry in Ravenna. MTA, in a strategic alliance with Wheland Foundries (Warrenton, Georgia), operates an 85,000-ton-a-year gray iron facility at Warrenton. In Auburn, Indiana, near its corporate headquarters, the company is preparing for the opening of its Auburn Works, including Auburn Works One, a machining operation on North Taylor Street, which manufactures clutches for the agricultural, truck, industrial, and construction industries, and also does contract machining, and Auburn Works Two, on West Auburn Drive, a 100,000-ton-a-year casting operation. Internationally, MTA has a 50,000-ton-a-year iron foundry (formerly Eureka Foundry Corporation) in Woodstock, Ontario; two plants in Mexico, a strategic alliance with Manufacturas Cifunsa S.A. de C.V. (Saltillo, Coahuila, Mexico), called Cimetech, in Saltillo and Irapuato, with a combined capacity of 102,000 tons a year; and the Sachs Foundry (Sachs Giesserei GmbH) in Kitzingen, Germany, a joint venture with ZF Sachs AG, a subsidiary of ZF Friedrichshafen (Friedrichshafen, Germany - founded in 1915 by Ferdinand von Zeppelin of dirigible fame), with an annual capacity of 50,000 metric tons of iron, 10,000 metric tons aluminum, and six million total aluminum castings.

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