After more than 90 years, operations are winding down this month at Superior Plating Inc., a metal finishing company whose factory is one of the last industrial properties in northeast Minneapolis.
As recently as September, all 35 production lines were humming, manned by about 100 workers. But with a tough economy and its business going to cheaper foreign metal platers, the company decided to close its doors.
Superior got a reprieve a few months ago when its unionized workforce agreed to wage concessions, said President Michael McMonagle. But when a plan to raise new capital faltered, Superior had no choice but to file Chapter 11 bankruptcy in November.
Its bankruptcy reorganization plan listed assets of $3.8 million and liabilities of $4.4 million. The plan to settle with creditors calls for the business to shut down and for the 110,000-square-foot plant to be auctioned off early next year. The company is scheduled to close next week.
"It's very strange not to hear all the noises of things operating," McMonagle said on a recent tour of the factory, where just one line was running, priming and coating large metal parts with chrome.
Only 12 workers remained. The only other people at the plant were there to inspect Superior's equipment, which is also scheduled to be sold off.
The bankruptcy and decision to close followed several years of problems for Superior. McMonagle said they began a decade ago when computer companies that accounted for a large part of Superior's business moved their manufacturing operations to Asia, where they found other suppliers for metal finishing and stamping parts. "That whole piece of our business pretty much went away," McMonagle said.
Outsourcing, chiefly to foreign markets, has been a challenge for the entire metal plating and treating industry for the last several years, according to IBISWorld, a Los Angeles-based market research firm. Revenue for the industry has grown by an average of less than 1 percent a year since 2005. IBISWorld has forecast that by the end of next year the number of U.S. metal plating and treating firms will have fallen by about 4 percent since 2002.
McMonagle said Superior Plating offset some of the lost business with work for other industries, including the furniture, automotive and aerospace markets. But those orders were considerably smaller, making it difficult to cover the costs of operating equipment designed for larger jobs. He said the company had begun to rebuild its business, but saw its sales fall by about 40 percent when the recession hit.
"It's really unfortunate that there wasn't someone with the ability to step in and make an investment to keep the business going," said Harry Levey, a vice president of SICO Inc., a longtime customer. The Edina-based company has used Superior for zinc and chrome plating metal parts used in its line of folding tables and stages. Levey said he's been able to find other local metal platers to do some of the work, but will have to go outside Minnesota for some large-scale plating jobs.
Bankruptcy Court filings show sales of $6.2 million for the year ended Aug. 31, essentially the same as 2010. Superior was on track this year to turn its first profit since 2008 until the economy soured this summer.
McMonagle said an affiliate of Minneapolis-based City Center Realty Partners has made a stalking-horse bid of $2.5 million on the factory and a 5.5-acre site at 315 1st Av. NE. Other bids could come at the auction early next year. Representatives of City Center declined to comment on plans for the property. McMonagle said he has been told that City Center is interested in developing a retail and residential complex on the site.
About six years ago Ryan Cos. was interested in acquiring the property and redeveloping it into condos, but didn't proceed when the real estate market soured. McMonagle said the sale would have allowed Superior to move and build a newer, more efficient plant in Shakopee, close to a plant run by Toro Co., another long-time customer.
McMonagle said his hope now is that the site can be redeveloped into something that fits with the neighboring condos and shops that have sprung up in recent years in the area. "I'd like to see it get a new life," he said. "It's a prime location."
Susan Feyder • 612-673-1723