Franklin Equipment Co. announced Tuesday that it is closing permanently and filing for bankruptcy.

“We believe this course offers the best opportunity to have an orderly disposition of the company’s assets and provide fair treatment to our creditors,” said Roger W. Drake, founder of the 46-year-old company, in a written statement.

The company, located across the Blackwater River in southern Isle of Wight County, will seek bankruptcy protection under Chapter 7 of the U.S. Bankruptcy Code.

“This step is painful for our dedicated employees, our loyal customers and our vendors,” Drake said, “but we simply had no alternative.”

Franklin Equipment Co. was founded in Franklin in 1962 and made diesel logging tractors, primarily for the timber harvesting industry.

The company blamed its demise on the economy and competition.

In its statement Tuesday, the company said that “the logging equipment business is highly cyclical … and purchasers of the large machines (produced by Franklin Equipment) depend on access to credit, as well as on the financial health of the lumber and pulp and paper industries. Recent downturns in those industries have combined with the unprecedented nationwide credit crisis to bring sales of Franklin’s products to a standstill.”

The statement said Franklin Equipment has faced “intense competition from giant multinational companies that increasingly dominate the market for logging and agricultural machinery.”

“Competitors such as Caterpillar and Deere & Company have access to financial resources, suppliers, and markets that a small, family-owned company could not match.”

Legal matters also played a role in the decision to file for bankruptcy protection. The company said “the ongoing expense of pending lawsuits also played a role in the decision to close down.”

“Members of the (Drake) family have made substantial personal and financial sacrifices in an effort to wait out difficult conditions in the logging equipment industry,” Drake said. “With the current economic outlook, the family simply cannot afford to absorb more losses.”

The company told its 60 employees on Dec. 23 that the business was closing until further notice. Some limited work was to continue to be performed after that date, including security, maintenance of equipment and buildings, and certain administrative functions.

Fifteen workers were laid off in October.

In addition to its headquarters in Franklin, the company owns a retail sales and service outlet in Louisburg, N.C., and a foundry that makes axle and transmission housings in Independence, Ore. The Louisburg, N.C., outlet is the only company-owned dealership, but other outlets operate in 25 states and eight foreign countries.