Heavy-duty wheel and wheel-end manufacturer Accuride Corporation filed for Chapter 11 bankruptcy on October 9, 2024. In a Chapter 11 bankruptcy, a company will typically reorganize their debt and finances and emerge successfully as a going concern. The repayment plan to creditors is decided by creditors and the bankruptcy court but their interest is to keep the company going in hopes of having their own debt repaid. To repay Accuride’s significant debt load, it may be critical for them to sell some of their assets, which may include inventory, equipment, and company divisions. Given that wheels are Accuride’s core business, it’s likely they will do much to preserve the inventory, wheel plant and the North American wheel business.
This means that non-core assets like the wheel-end business (Gunite and KIC) and overseas subsidiaries may be sold. According to a statement made by Accuride to a local Rockford, IL news outlet, WIFR:
“Accuride is in an active sale process to determine if there is a buyer for our wheel end business. If a sale cannot be consummated, we will begin to wind down the wheel end business. We are working with our customers to understand their requirements, which will determine the timeframe for a potential winddown, if a sale cannot be completed.”
A United Auto Workers’ Local 718 representative told WIFR:
“If Gunite does not sell before the bankruptcy is cleared, Accuride will close the plant.”
The restructuring is expected to be completed by January. If no company is interested in the wheel-end business as an operating business, it could be the end of the Gunite/KIC business or at least the end of their US manufacturing, which may be highly disruptive to OEM’s that rely on Gunite’s and KIC’s parts today.
Between the Webb petition, the Accuride bankruptcy, the potential for new tariffs under a Trump administration, as well as still elevated freight levels caused by the Red Sea Crisis and upcoming Chinese New Year holidays, expect there to be significant turmoil to the brake drum and wheel-end industry in 2025.
As always, contact us to discuss options on any specific parts.
