Eagle-Picher Industries' Chapter 11 experience is proving to be successful, if unusual. The reason the company had to seek protection from creditors is atypical in itself. For 37 years Eagle-Picher produced asbestos, and for much of that time no one knew it was a health hazard. When the dangers of asbestos became known, Eagle-Picher quit making it.
Nevertheless, Eagle-Picher was nailed with a series of immense lawsuits that threatened to destroy the company. Chapter 11 protection was the only recourse.
Unlike your typical Chapter 11 company, Eagle-Picher didn't land in bankruptcy court because of poor management, weak markets or high debt. The company had operated profitably, and its various rubber divisions have grown steadily since it sought court protection in 1991. Its future is promising.
Under Chapter 11, Eagle-Picher has protected its operations while dealing with the asbestos claims. Management's strategy has proven to be sound.
``Bloodsuckers'' may be a little strong when describing automotive companies.
Perhaps there's a better word to identify customers that want their suppliers to share gains realized from favorable currency exchanges against the weak U.S. dollar.
Oh, and how about those warranty costs. Let the suppliers pay for those, too. But don't forget the auto makers want their vendors to take on more of the design and development work.
This, of course, is on top of the usual push to have suppliers cut their price during the life of a contract. Additionally, they must meet more stringent performance requirements; how does 100,000 to 150,000 miles for a part sound?
Auto parts suppliers won't complain about paying the warranty cost for their own products. That's not good enough for the auto companies, which now are looking for a patsy to pay most-if not all-their warranty expenses.
But then, Ford Motor Co. and Chrysler Corp.'s profits stumbled to $4.1 billion and $2 billion last year. General Motors Corp. had a near-record $13 billion in profits.
You don't make money like that by just selling cars.