DETROIT -- Automotive interior maker Collins & Aikman Corp., whose results have slumped amid slower auto production and costs related to retirement of debt, said that private equity firm Heartland Industrial Partners, LP will take a 60% stake valued at $260 million.

Heartland, founded by former President Reagan cabinet member David Stockman, will buy 25 million newly issued primary shares from Collins & Aikman at a price of $5 each.

Troy, Mich.-based Collins & Aikman also said its controlling shareholders -- Blackstone Capital Partners, L.P. and Wasserstein Perella Partners L.P. -- have agreed to sell 27 million shares or about 50% of their collective holdings in Collins & Aikman to Heartland at a price of $5 per share.

"I believe that with this infusion of new capital from Heartland, we should be able to significantly enhance the growth opportunities for our global business, subsequently maximizing value," said Collins & Aikman Chairman and Chief Executive Officer Thomas Evans. Collins & Aikman said the slowdown in North American light vehicle production and a restructuring of its European operations will result in operating income in the $15-to-$20 million range for the fourth quarter. The fourth quarter production cuts will hurt operating income in the three-month period by about $6 million. The company posted operating income of $35.6 million in the fourth quarter last year.

The company said it expects sales for the fourth quarter to fall 12% from the fourth quarter last year, more of a drop than the 8% to 10% drop the company expected previously. The company reported a larger-than-expected loss in the third quarter amid slower demand for the Ford Explorer sport utility vehicle parts by Ford Motor Co.

Both of the stock transactions, expected to close by mid-February, will include a profit participation right of up to 25 cents per share on certain future stock sales by Heartland.