Venture is a Detroit based company. two recent articles in Detroit newspapers sums it up :
***************** DETROIT NEWS *************************
From the Detroit News
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Tuesday, April 1, 2003
Venture files for bankruptcy protection
Trim maker names new CEO; founder to remain as chairman
By Sarah A. Webster / The Detroit News
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FRASER -- Automotive supplier Venture Holdings Co. -- one of Metro Detroit's
largest privately held companies -- filed for Chapter 11 protection from its
creditors in U.S. Bankruptcy Court in Detroit over the weekend and appointed
a new CEO.
Joseph Day, former CEO of Freudenberg/NOK and a director at the company
since January, will now lead Venture. The firm makes plastic bumpers, panels
and trim.
Venture's founder, Larry Winget, who has been publicly criticized for
mismanaging the company he ran and privately owns, will remain as chairman.
The move comes after Venture, with about $1.9 billion in annual sales, was
unable to keep a subsidiary, Peguform GmbH, out of German bankruptcy court.
German directors filed to declare the firm insolvent and Venture
unsuccessfully tried to block the move.
Venture missed a payment to bondholders, who are owed about $455 million,
last year, and banks and analysts have been concerned about cash flow
between Venture, Peguform and other companies owned by Winget.
Venture's latest annual filing with the Securities and Exchange Commission,
for fiscal year 2001, showed the company had $1.4 billion in assets and $894
million in debts. It hasn't publicly reported annual financial information
since.
"We are filing for Chapter 11 protection as a vehicle to restructure Venture
Holdings' debt in response to events at our European operations that have
severely affected our liquidity," Day said in a statement. "This action is
in the best interests of our customers, employees and creditors... ."
The company employs about 13,000 workers, including about 2,000 in Southeast
Michigan. Analysts say Venture's woes seem to be management related, rather
than fallout from a weak economy.
A Forbes magazine story about Winget, published in the latest edition,
accused him of "siphoning off tens of millions from his car parts business,
enraging German automakers and U.S. creditors."
James Butler, Venture's acting CFO, told Forbes that Winget didn't do
anything wrong. The transactions were properly disclosed and were an attempt
to diversify the business, he said.
You can reach Sarah A. Webster at (313) 222-1463 or swebster@ detnews.com.
************ FROM THE DETROIT FREE PRESS*****************
Venture moves in new CEO
Auto supply vet has to save firm
April 4, 2003
BY JEFFREY MCCRACKEN
DETROIT FREE PRESS BUSINESS WRITER
It's Joe Day's third day on the job. He still doesn't have a business card
and occasionally he walks down the wrong hallway trying to find his way
around.
"I'm still figuring out this place," he said laughing Thursday. His sparse
corner office is strewn with papers, file folders, an open briefcase and an
empty coffee cup.
He will have to learn quickly. Day has been named chief executive officer of
Fraser-based Venture Industries, a $2-billion auto-plastics supplier that
filed for bankruptcy protection last Friday. As part of that filing,
creditors such as banks and bondholders demanded a new CEO to replace Larry
J. Winget, one of Venture's founders.
Day, a respected chief executive for 14 years at Plymouth supplier
Freudenberg-NOK, joined Venture's board in January, three months after
retiring from his old job.
It will fall on him to get Venture through Chapter 11 bankruptcy and help it
emerge a viable business. He acknowledged he'll have to do "significant head
count reduction and cost cutting." And he'll have to shake up a culture that
"at times irritated our customers," such as General Motors Corp.
Many companies enter Chapter 11 with hopes of reorganizing but end up
closing due to loss of customers, legal bills and inability to get new
lenders. Chapter 11 is the form of bankruptcy Kmart Corp. is in.
"This is a business that is fundamentally sound. The base business in North
America makes money. With the exception of the significant debt, we're OK,"
said Day, who's spoken at Harvard and MIT about lean manufacturing, a
subject that probably will become a necessity at his new employer.
Venture owes public bondholders an estimated $455 million and banks $433.3
million, SEC filings show. It owes suppliers about $58.3 million. Among
those owed money locally are Universal Container of Ferndale and GDX
Automotive of Farmington Hills. They're owned $358,000 and $338,000,
respectively.
Almost all companies that go into Chapter 11 have to make major cuts, and
Day said Venture will be no different. He said his goal is to spare the
engineering and technology departments as much as possible. He hopes to
announce his restructuring plan in 90 to 120 days.
The company has about 2,000 employees in Michigan and 13,000 worldwide. It
has operations from Sterling Heights to South Africa.
"There's no chance for us to avoid some significant reductions in our
structure. That means a reduction in head count, re-evaluating our leases
and our supply contracts from the last 18 months," he said.
"In North America we are an $800-million to $900-million business and we've
got to make some big cuts. We don't have the luxury of any discretionary
spending. Our actions will be consistent with the cuts you've seen at say
(auto supplier) Federal-Mogul or Kmart. It's what we have to do to protect
the company's future," Day said.
Money troubles
Venture had been a highly leveraged company since it bought Peguform GmbH
for $475 million in 1999. The deal merged the $1.2- billion Venture and the
$1.1-billion German auto supplier that had 16 plants across Germany, France,
Spain, Britain and eastern Europe.
Venture's struggles began last May when Peguform's German management filed
for "provisional insolvency," feeling Venture was "repatriating" too much
money to the United States to pay debt. Peguform was having difficulty
paying its suppliers due to all the money going to the United States, say
auto insiders. That put Peguform's future in the hands of a German
bankruptcy court and stopped money flowing to Venture.
Venture has bought back the French arm, but it still doesn't have the German
and Spanish operations. Between them, they have sales around $600 million,
Day said.
Peguform's insolvency meant Venture still had all the debt, but none of the
European cash or profits that were greater than the profits from North
America by 2002.
"We don't think they'd be in this position without the Peguform insolvency,"
said Martin King, Standard & Poor's auto-supplier analyst. "They did have a
lot of leverage, but they were a viable business before with some good
business."
One issue that probably angered Peguform -- as well as the company's
creditors -- was owner Winget. A recent Forbes article detailed a host of
other companies owned by Winget that do most of their business with Venture,
and in turn pay Winget millions on top of his $2-million salary from
Venture.
Angry bondholders still have not signed on to the bankruptcy filing. People
close to the company say they'll get 20 percent or more of the company from
Winget eventually. One insider said bondholders were upset Winget wouldn't
commit his ample personal assets to them.
Day declined to comment on those issues. "Larry and I have an understanding
that I run the operations and get them in shape while he deals with the
bankruptcy and the financial things," he said.
Former Freudenberg-NOK chief financial officer Ken Anderson is working with
Day on the company's financial operations.
"The financial people wanted Joe in there. He's a very solid executive who
is respected for the job he did at Freudenberg," said David Cole, head of
the Center for Automotive Research in Ann Arbor. "He will have to run this
one lean. It's not an option now."
Day's appointment probably helps the company's standing. It was suffering in
the eyes of many automakers. Day met with employees Tuesday and will meet
with more. He told them the customer is king, and he says that wasn't the
case at Venture before.
"We kind of irritated customers with our ways. We need to live to serve
them. We had good relations with Chrysler, but not so at Ford and GM," Day
said.
Then, showing the challenge ahead, he added that he also needs to "pretty
much instantly eliminate the waste at the company, and fix some small
quality problems we have."
It's a different retirement than Day envisioned. He joined Venture's board
expecting to work only a few days a month, spend lots of time in Florida and
teach classes on lean manufacturing.
He won't specify how long he'll be at Venture -- "let's just say I'm here as
long as it takes" -- but he does note part of his job is to find and groom
the next CEO.
"I spent my previous 15 years trying to make this a more competitive
industry in North America. If we see a critical supplier like Venture go
away it would throw the industry into significant turmoil and disrupt what
I'd been trying to all those years. I don't want that to happen," he said.
Contact JEFFREY McCRACKEN at 313-222-8763 or
mccracken@freepress.com.