General Motors isn't the only major OEM to be concerned about the ongoing First Brands bankruptcy struggle. Following news that the automaker held an urgent supplier meeting last month over the snafu, its cross-town rival Ford is apparently doing all it can to mitigate any potential parts shortages and manufacturing woes that a First Brands collapse could cause. Considering one of the Blue Oval's products is the nationally best-selling F-150 pickup, it could have a lot at stake. The company has a few irons in the fire that could keep things running smoothly, but potential illegal activities on the part of First Brands executives could queer any deal.
Keeping Vital Part Supplies From Drying Up
The First Brands bankruptcy has affected the entire auto industry, ranging from enthusiasts who can no longer fit StopTech brakes or Autolite spark plugs to their cars to major OEMS (like Ford and GM) who rely on the supplier for vital production components. Adding complexity to the situation is the fraud and conspiracy that have allegedly been happening at the top of First Brands for years – its former CEO Patrick James and his brother, senior executive Edward James have been accused of misappropriating millions of dollars from the company. Both have since resigned their posts and been sued by the company they once worked for.
However, Ford is doing what it can to keep as much of the company afloat as possible. The automaker pays for its supply orders in advance using cash, helping First Brands continue operating as it navigates the bankruptcy quagmire. Even better, there are four companies in play to purchase First Brands' existing assets that provide parts to Ford, and three of those interested parties already show up on the Blue Oval's supplier payroll. If one of them ends up negotiating a deal with the embattled auto parts company, that would be a relatively seamless solution for all involved.
The Car Company With The Most To Lose
Speaking to Bloomberg, Ford legal counsel Mark E. Freedlander said that the manufacturer was the most exposed to the First Brands collapse out of any major OEM. Complicating things further are the supplier's embittered creditors, who rightfully feel jilted out of the money they invested based on the allegedly fraudulent reports of the James brothers. Those creditors, as well as First Brands' own lawyers, have expressed concerns over proper restitution to the judge overseeing the company's insolvency case.
Source: Bloomberg via Ford Authority
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This article originally appeared on CarBuzz and is republished here with permission.
