US Aluminum customers, employees grapple with Chapter 7 filing

By Katy Devlin, Glass Magazine
May 16, 2011
COMMERCIAL, FABRICATION : BUSINESS

On May 11, International Architectural Group LLC, Monterey Park, Calif., filed for Chapter 7 bankruptcy in the Los Angeles U.S. Bankruptcy Court. The filing surprised many in the industry, at least with its abruptness. Several employees of United States Aluminum, a Waxahachie, Texas, subsidiary of the company, reported learning the news the night before, and some, the day of.

"Everyone was surprised today [when they heard] the news that they decided to lock the doors without any warning," said Paul DeGray, head of PDG Architectural Sales, which was serving as sales representative in New York City and upstate New York for US Aluminum.

International Architectural Group, formerly International Aluminum Corp., is parent of US Aluminum, in addition to International Extrusion and Raco Interior Products, also based in Waxahachie, and International Window Corp., Hayward, Calif.

"I heard the news at 7:30 Tuesday evening when I was informed by the Langley [B.C.] sales manager that the company had filed for Chapter 7 and that the closure was immediate," said Russ Mason, US Aluminum sales representative for British Columbia. "The Langley staff had some time to retrieve their personal belongings, and the doors were then locked. The news came as very much a shock to employees and customers alike, as the Langley operation was performing well despite the economic situation. But it is not always easy to see the overall picture and what was going on in the U.S. operations."

Some employees reported that they had been notified last week that the company was for sale, which made the bankruptcy filing even more of a shock.

"We'd been hoping that someone would come in and buy us. That would still be my wish," said Wendell Pate, a 27-year employee of the company, on the day of the filing. "But that doesn't look like it's going to happen." Pate was serving as sales representative for eastern Kentucky, South Carolina, western North Carolina, West Virginia and western Virginia.

The abrupt filing has left some customers scrambling. "I have materials in production at US Aluminum," said one longtime customer, who wished to remain anonymous. "I sent them thousands of dollars of specialty hardware. ... This morning, my emails are returned [to sender], and no one at any division answers their phone. My doors were to ship this week. ... This is devastating for my business."

Despite the sudden news, several employees and former employees say they knew the company was in trouble. "I was not particularly surprised," said Duane Tuhy, Southern Architectural Sales, Waddell, Ariz., US Aluminum sales representative for Arizona, New Mexico and El Paso, Texas. J.D. Williams, former executive vice president of US Aluminum, agreed. "I've been predicting that they weren't going to make it for two years. They just had too much debt. With the market as tight as it is, it is very hard to be competitive, particularly if you have debt interest," Williams said.

Several people close to the company questioned the decisions of the new management since the company was sold in 2007. One employee, who preferred to remain anonymous, said, "It's not the economy or the market that killed US. ... [US Aluminum] had good people in fabrication, estimating and drafting. The managers, however, were hired from outside of the industry to run divisions and operations, completely oblivious about what we did [as a company]. I have never seen a company mismanaged the way US [Aluminum] was."

In the short term, the bankruptcy will "be difficult for some customers and of course the employees," Mason said. "However, in the long term I think there will be very little impact as most companies, at least [in British Columbia], have not been running at capacity for the last two years and will be able to fill the void. ... In my opinion, the biggest down side to this is the loss of another North American aluminum extruder, possibly opening the door to more offshore product when the market does pick up."