16 BUSINESS Tuesday, October 11, 2016 CHINA DAILY
LEGAL AUTO Special steel maker files for bankruptcy
Rest of industry was which has caused a heavy burden on its cash flow. profitable last year, but “Last year, profits of Chi the Dalianbased firm nese steelmakers were gener It’s rare for State ally quite good. The default of took on too much debt Dongbei Special Steel is owned companies mainly because it has raised By YANG ZIMAN too much debt,”said Liu. [email protected] to go bankrupt.” According to Xu Jisheng, deputy director of the State Dongbei Special Steel Liu Xinwei, an analyst at owned Assets Supervision Group Co Ltd, a Stateowned chem99.com, a bulk commodity and Administration Commis steelmaker in northeastern information and consultancy sion of Liaoning Province, China, started bankruptcy website the provincial government proceedings on Monday. has mobilized a lot of resour A worker carries a windshield after inspecting it for flaws at the Fuyao Glass America plant, on Friday in Moraine, Ohio. JOHN MINCHILLO / AP It is the first steel company ces to help the company pay to go bankrupt in the endeav back the debt. Now, the com or to restructure the coun pany is able to sustain nor try’s iron and steel industry, 496.9 mal production even though according to a statement million the debt is not being repaid. Fuyao commits to $1b US investment made by the company’s listed Dongbei Special Steel had number of shares in Fushun subsidiary Fushun Special tried a debttoequity plan, Special Steel held by Dongbei Steel Co Ltd. but met resistance from its in the heart of the US auto cor “(This is) another example Special Steel that were frozen By PAUL WELITZKIN So far, Dongbei Special creditors. in New York ridor, and are highly commit of a Chinese company that is by the Dalian court 2,000 Steel, which is based in Dali The company’s chairman, paulwelitzkin@ ted to supporting the growth eager to expand, invest more an, Liaoning province, has Yang Hua, committed suicide chinadailyusa.com of the North American auto number of jobs already created and create new jobs and defaulted nine times. The and regions, including car in March 2016, days before motive market,”he said. by Fuyao Glass America opportunities in our region, principal loss has amounted bon structural steel, alloy the first default. The compa Chinese investments in the Upon completion, the after once building a footprint to 5.8 billion yuan ($865 mil steel, tool steel, stainless steel ny has not made public any United States automotive 47hectare Moraine facility, in southeast Michigan,” Jerry lion). and bearing steel. financial reports since Sep industry continues to grow which is housed in a former director for Plymouth. Xu, president of the Detroit Dongbei Special Steel was “It’s rare for Stateowned tember 2015, defying persist with a subsidiary of Fuyao General Motors’ assembly The Plymouth plant will be Chinese Business Association formed in 2004. Dongbei companies to go bankrupt. ent demands from its Glass Industry Group, the plant near Dayton, Ohio, will used for the final processing of said in an email. Special Steel is the control But, the government won’t creditors. world’s leading automotive be the largest glass fabrication automotive glass, such as Connors is hopeful that Chi ling shareholder of Fushun pay too much to bail it out,” Another Stateowned steel glass manufacturing compa plant in the world with the windshields, from Fuyao nese investment in Michigan’s Special Steel, listed on the said Liu Xinwei, an analyst at maker mired in debt crisis is ny, planning to invest $1 bil capacity to produce 4 million plants in Ohio and Canada. auto sector can be duplicated Shanghai Stock Exchange, chem99.com, a bulk com Bohai Steel Group based in lion in facilities there. automotive car sets and 4 mil “Fuyao started its American in other segments of the state’s which made the bankruptcy modity information and con Tianjin, whose debts stand at Fuyao celebrated the grand lion automotive replacement journey in Michigan in 2009, economy. announcement. sultancy website. 192 billion yuan. It began opening of its newest US plant glass windshields each year. near Detroit. There are a lot of “As more Chinese compa About 496.9 million shares Liu said that eliminating debt restructuring in March. in Moraine, Ohio, on Friday, Currently employing 2,000, great automotive companies nies find success and happi of Fushun Special Steel, or problematic assets is actually A restructuring plan, and also unveiled plans to Fuyao expects this to grow to coming from China to North ness in Michigan, they will tell 38.22 percent of its total a good thing for the industry. including issuing corporate transform a building in Plym 2,300 — 2,500 by the end of America. They recognize that their friends, and more may shares, held by Dongbei Spe The government also would bonds, was finalized for outh, Michigan, into an auto 2017. the center of the North Ameri wish to come. Already we’re cial Steel were frozen by the like to see more market for Bohai Steel in late Septem motive glass plant and In the Detroit suburb of can automotive industry, and seeing great Chinese invest court on Monday. ces involved in the industry ber. research and development Plymouth, Fuyao will remodel the greatest concentration of ments in insurance, educa The bankruptcy is the to get rid of the outdated The slimming down of Chi center. a 4.9hectare plant and automotive talent, is in Michi tion, real estate, and other result of the company’s cred capacity. nese steel smelters, with a “Today’s grand opening in expects to create about 450 gan. (The state) is a place these sectors,”Connors said. itors’ application to the court. According to Liu, special purpose of shedding crude Moraine is the culmination of jobs there within two years Chinese automotive players “Fuyao’s goal is to provide It has nine months to come steel normally has high profit steel capacity by 100 to 150 a monumental undertaking by and about 950 within three need to be as they enter the the highestquality products up with a restructuring plan. margin. One of the direct million metric tons in five Fuyao and our partners,” years as it consolidates US,” Brian Connors, executive and outstanding service to our Dongbei Special Steel’s causes for the default is that years starting in 2016, has Chairman Cho Tak Wong of research and development director of the MichiganChi customers,” said John Gauthi products have been exported the company has invested in seen consolidation previous Fuyao said in a statement. “We operations, said John Buzuvis, na Innovation Center in er, president of Fuyao Glass to more than 20 countries some projects in Dalian, ly take place by mergers. are proud of our work in Ohio, community development Detroit said in an email. America said.