Citation Corp., based in Birmingham, Ala., announced that it has filed for bankruptcy protection. The company cited an inability to pass on higher scrap metal prices to its customers as a main reason for the Chapter 11 filing.
A company spokesman said Citation, which employs 2,000 workers at six plants in Alabama, filed to reorganize late last week.
The company said the filing will allow it to continue operating while it reduces its $300 million debt and seeks new prices for the specialty steel products it makes without threats of lawsuits from creditors. The company buys scrap steel that it molds into automotive parts and materials for other industrial companies.
President Ed Buker said Citation plans to continue meeting delivery targets for its customers.
"Currently, all our facilities are in operation. A lot of times when companies are in financial trouble, they are operating poorly," he said. "We're just unable to offset the price of scrap steel."
Citation operates 17 plants with a total of 5,100 workers in Alabama, Illinois, Indiana, Michigan, North Carolina, Texas and Wisconsin.
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