Erie County officials are ecstatic about Delphi's winning bidder.
"We can't have a better company than the company they have right here," Erie County commissioner Bill Monaghan said. "This company looks like the real deal."
Delphi Corp. has entered into an asset purchase agreement with Hephaestus Holdings Inc.'s indirect, wholly-owned subsidiary, Kyklos Inc. Financial terms were not immediately disclosed.
The agreement includes the acquisition of the Perkins Township facility and the wheel bearings plant's inventory, intellectual property, machinery and equipment. Kyklos, Inc. will also offer employment to all of the plant's employees and expects to assume all of the customer and supplier contracts.
"I'm glad somebody bought it," said Jason Pelz, who has worked at the Delphi plant as a manufacturing engineer for about nine years. "It means me and my co-workers still have a job."
Kyklos was declared the winning bidder in an auction to sell the plant. The sale of the wheel bearings business is contingent on certain closing conditions, including approval by the U.S . Bankruptcy Court at a hearing March 19. The sale is expected to close at the end of April.
"From what I hear, they're pretty good to work with," Pelz said. "Now we know we have future job opportunities."
Hephaestus Holdings, Inc.'s chief executive officer, George Thanopoulos, said the company has a history of working closely with labor unions. The company plans to continue the tradition with the local plant's union workers.
"We look forward to working with the UAW to create a long-term, sustainable business in Sandusky with a competitive cost structure and the finest quality in the industry," he said in a press release.
Delphi spokesman Brad Jackson said the corporation is looking forward to working with Kyklos.
"This is another successful step in the divestiture of the business," Jackson said.
Mark Litten, executive director for the Erie County Economic Development Corp., said he supports any business that wants to keep the plant in operation.
"They want to turn this operation around. They're going to offer positions to everyone working here today. It sounds good at this point," Litten said.
Thanopoulos said the company forges and machines products that are similar, if not identical, to the components used by the local wheel bearings plant. Kyklos plans to become an integrated supplier of wheel bearings and plans to expand its technological advantage and diversify its customer base.
"We are very excited to expand into the wheel bearings business and look forward to becoming a significant global competitor in the industry," Thanopoulos said.
Hephaestus Holdings Inc. is owned by KPS Capital Partners, LP and is an affiliate of Mitsubishi Corp. HHI manufactures highly-engineered symmetrical forged parts for various power train and wheel-end applications and employs more than 1,100 employees at seven manufacturing facilities in the Midwest.
"I think it's fantastic," Monaghan said. "They're stable. They've got global exposure ... they will keep this plant open for many years to come."
Last week a group of investors submitted a $75 million bid to purchase the local Delphi plant that included keeping the plant's employees, who would receive 20 percent ownership of the business.
Two days later, the group withdrew its bid. The rescinded bid put Cleveland-based Resilience Capital Partners, who submitted a $44.2 million bid in January, back on top again.
In 2005, Delphi Corp. filed for Chapter 11 bankruptcy. In September, several companies submitted bids to the U.S. Bankruptcy Court to buy the local wheel bearings plant.
The proceedings are taking place in the U.S. Bankruptcy Court for the Southern District of New York.