Boston — The Goldman Industrial Group, Inc. and six of its U.S. subsidiaries — including Bridgeport Machines, Inc. — filed petitions for reorganization under Chapter 11 in U.S. Bankruptcy Court for the District of Delaware in February. The company had been actively seeking funding from its lenders to avoid the necessity of business shutdowns, but was unsuccessful.

The companies that form Goldman include the Jones & Lamson Vermont Corp. which was founded in 1829 as the National Hydraulic Co., and its spinoff companies, the Fellows Corp., Bryant Grinder Corp., and J&L Metrology Co., known as the Vermont group. The other companies involved are Hill-Loma, Inc. and Bridgeport, which was acquired by Goldman in 1999.

Despite the Goldman Companies' esteemed role in developing the machine tool industry, the company closed and is pursuing the sale of the operations at five of these subsidiaries. The company has negotiated Debtor-in-Possession financing to continue the operations of Bridgeport.

"There has been considerable interest by a number of parties in the sale of the Vermont group of companies and in Hill-Loma," said Dave Bagley, a restructuring consultant with Morris-Anderson & Assoc., Ltd., which is handling the Chapter 11 proceedings. "We are looking into all the options for restructuring Bridgeport for continued operation."

Although operations at Bridgeport were halted and the employees were on furlough during the Chapter 11 filing process, Bagley said business has resumed. The company has no plans for any layoffs, he added.

Goldman is not the only machine tool manufacturer to fall on hard times. HR Kreuger, Parker Majestic, Inc., Cargill Detroit Corp. and other machine tool manufacturers have had recent financial problems, said American Machine Tool Distributors' Assn. president Ralph Nappi.

"The machine tool industry has been suffering for the past two and a half years," said Nappi. "Business is down 60 percent from its peak before this decline."

He said Goldman did not provide the necessary leadership to guide Bridgeport and its other subsidiaries successfully through this downturn. Three weeks before the Chapter 11 filing, Harold Pinto joined Bridgeport as president and the company hired Bob Castonguay as the new vice president of manufacturing.

"This is not necessarily a case of mismanagement on Goldman's part," said Nappi. "The machine tool industry is so far down and Bridgeport has had financial challenges over the years. It was struggling before it was acquired."

Nappi said he sees reasons for cautious optimism for the machine tool industry. He cited recent positive directions in economic indicators like durable goods and capacity utilization.

"I think that means we have hit bottom," said Nappi. "There are indications that the general economy is starting to recover, but machine tools won't recover for a few quarters due to existing excess manufacturing capacity."