Citing slack sales in the computer industry and the continuing strong dollar abroad, I.M.S. Equipment Inc. of Irvine, an electronic equipment manufacturer and distributor, filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code.
The filing, made public Tuesday in U.S. District Court in Santa Ana, listed assets of about $3 million and liabilities of $3.6 million.
W. Charles Davison, executive vice president of I.M.S. and son of the founder of the 20-year-old company, said I.M.S. was profitable through 1984, when it had $18 million in revenues, and then, suddenly, saw its sales drop 60% during the first four months of 1985.
Davison blamed the deterioration on the increasing tendency of computer makers to buy their parts from foreign manufacturers, who have the advantage of a lower-paid work force.
For example, Davison said, I.M.S. last year sold $3 million worth of disk drives, a key computer component, to Digital Equipment Corp. but lost the account this year when DEC moved its manufacturing facilities offshore and began purchasing parts from foreign plants.