A Michigan-based supplier that produces tube assemblies and transmission components for the Chevy Corvette has filed for Chapter 11 bankruptcy.
According to a recent report from Crain’s Detroit Business, Erin Industries Inc. recently filed for Subchapter V of Chapter 11 bankruptcy protection. The company experienced a downturn over the course of the last two years as a result of rising material costs and supply chain disruptions.
The family-owned company was founded in 1975, and serves as a supplier for the automotive and aerospace industries, including components for the Chevy Corvette. According to Erin Industries owner and President, Steven Atwell, most of the company’s customers offered price increases for steel, but not other inputs like labor or fuel.
However, the company’s profitability reversed most dramatically following a deal with steel maker Nova Steel USA Inc. The deal was entered shortly before the pandemic, after which it became difficult for Erin Industries to procure the parts needed to fulfill the contract. According to court documents, Nova is the largest creditor in the case, with $869,865 owed by Erin Industries.
Erin Industries is primarily a tier-two supplier, with 41 workers onboard. In addition to supplying parts for the Chevy Corvette and GM, the company also serves as a supplier for Ford and Stellantis.
According to Atwell, the company will likely survive bankruptcy reorganization. However, assuming the company does survive, it will then be forced to contend with the looming rise of electric vehicles as internal-combustion-powered passenger vehicles are eventually eliminated.
“We’re trying to get into that market like everybody else is, too,” Atwell told Crain’s.
“It means a lot to me that I have people working for me for over 25 years, so we’re a family business all the way down,” Atwell added. “I will keep them a place to work. I owe them that.”