Exide Technologies, which operates a battery manufacturing plant on Joy Road in Columbus, on Monday filed for Chapter 11 bankruptcy protection, with plans to restructure the company for “future growth.”
The filing, submitted in U.S. Bankruptcy Court for the District of Delaware, said Milton, Ga.-based Exide will continue to manufacture batteries as it normally has in the past in both the U.S. and overseas.
“We intend to pay U.S. employees as usual and do not expect any material changes to their benefits,” James Bolch, Exide president and chief executive officer, said in a statement. “Outside of the U.S., obligations to employees and suppliers will not be impacted by the filing.”
The company has been operating in Columbus since 1963. Its plant at 3639 Joy Road includes a 155,000-square-foot facility that has long churned out industrial batteries used as backup power for telecommunication switching systems, cell-phone towers, data centers and banks.
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Just last year, Exide announced it was pumping $70 million into upgrades of its plants in Columbus and Bristol, Tenn. That added 45,000 square feet of manufacturing space locally.
The move was to prepare the Columbus operation for production of high-tech “Edge Absorbed Glass Mat” batteries, targeted for aftermarket retailers to be used in hybrid autos, trucks and sport utility vehicles that start and stop frequently. Europe is the prime market for those batteries.
A call and email to the company Monday was not returned to get a current employee count in Columbus. During an expansion tour 15 months ago, Exide said it had 145 people on the local payroll, with plans to ramp staffing up to 250 early this year.
At the time, Bolch said he was certain the company would reach its target of employing 250 people in Columbus.
“We’re confident. It is a goal,” he said. “But the question is how fast. We’re getting a ton of (market) interest today, so it could go very fast. We’ve built this plant to run at capacity, and that’s what we’re aiming to get to.”
In Monday’s Chapter 11 filing, however, Bolch said the restructuring will help Exide Technologies “strengthen” its financial balance sheet and carry out “operational changes” to put the company on solid footing. He also pointed to the surging price of scrap lead in North America as a major reason for its current challenges. Lead is a material commonly used in batteries.
“Over and above these efforts, we intend to become even more aggressive in reducing costs, taking actions with respect to underperforming business segments and to focus on the most attractive areas for future growth,” the CEO said.
Exide said it has secured $500 million in debtor-in-possession financing from a combination of financial and investors to see it through the restructuring. It also has hired financial restructuring expert Robert Caruso, managing director of the firm Alvarez and Marsal, as its chief restructuring officer.
The company did say its current top executives will continue to oversee the day-to-day operations of Exide. However, it did not indicate how long the restructuring process could take.