According to Automotive News, Michigan-based commercial vehicle supplier Accuride has filed for Chapter 11 bankruptcy, hoping to shed debt and unprofitable business. The firm has $486 million in debt, largely due to a freight industry recession. Part of its money-losing business comes from a contract with GM to supply wheels for Chevy BrightDrop electric commercial vans.
Accuride is seeking to exit this contract with GM because it’s losing money, and the automaker is allegedly unwilling to renegotiate its terms. “With the cost of materials and labor rising due to COVID-19 and inflation, it has basically made that contract unprofitable for us,” said Accuride marketing director Grant Hatton. Accuride says about 75 percent of its business from its wheel factory in London, Ontario is with General Motors, which builds Chevy BrightDrop vans at its GM CAMI Assembly plant in Ingersoll, Ontario.
When reached for comment by Automotive News, a GM spokesman said Chevy BrightDrop operations won’t be impacted by Accuride’s bankruptcy and declined to comment on negotiations with suppliers.
Owned by New York private equity firm Crestview Partners, Accuride employs 3,600 people globally, and its bankruptcy filing specifically applies to its business in the U.S. and Canada. It has businesses in Mexico, Asia, and Europe that aren’t part of the bankruptcy.
This isn’t the first time Accuride has filed for Chapter 11 bankruptcy. During the recession that began in 2008, Accuride went bankrupt due to the slow global demand for commercial vehicle components and emerged from bankruptcy with a new capital structure in February 2010.
As GM Authority covered previously, General Motors announced in August that it was moving its all-electric BrightDrop commercial vans under the Chevrolet brand, effective for the 2025 model year. GM Authority suggested way back in March that it was only a matter of time before BrightDrop would fall under the Chevy brand umbrella. General Motors frames the move as an expansion to the Chevy EV portfolio, giving customers “access to one of the industry’s largest and most extensive commercial sales and service networks.”
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