German auto supplier Eisenmann, which supplied Tesla in 2015 with a new paint shop at its Freemont plant in California, filed for insolvency late on Monday, in a sign of the growing economic problems crushing profits in the auto sector.
Eisenmann, which has 3,000 employees and generated annual revenues of 723 million euros ($806 million) in 2017, filed for insolvency at the Stuttgart District Court.
The Boeblingern, Germany-based Company said it was now looking for a strategic partner for its Paint & Assembly, as well as its Application Technology businesses.
Potential buyers have already expressed interest, Eisenmann said.
The insolvency comes as bigger auto suppliers and carmakers including Daimler and Continental have issued profit warnings, triggered by a worse-than-expected downturn in demand for auto production.
Eisenmann ran into liquidity problems because major projects started in 2018 led to a large year-on-year loss, it said. A spokeswoman declined to specify which projects had pushed the company into insolvency.
"This is another example of the extreme supplier pressure these days. We do not foresee the environment getting any better soon," analysts at Evercore ISI said in a note last week.