One of the greatest small engine makers of all time, Briggs and Stratton has filed for court protection under Chapter 11 of the U.S. Bankruptcy Code.
With a us$6.7 million interest repayment not met on time, it became clear the company could not continue business under its present structure and shareholding.
However, this filing does not include any of Briggs & Stratton’s international subsidiaries.
Briggs & Stratton’s chairman, president, and chief executive officer Todd Teske, stated, “Throughout this process, Briggs & Stratton products will continue to be produced, distributed, sold and fully backed by our dedicated team.”
And while the company has been propped up with outside loans through this process, the object is to sell the company or its assets to the highest bid from potential purchasers without risk of being wound up.
The warning bells rang for the Briggs & Stratton’s operation in March 2020 when the company announced plans to sell its under-performing turf product lines.
These included lawn and turf care equipment sold under the Ferris, Billy Goat, Simplicity, Snapper, and Snapper Pro brands.
This started some tyre kicking from other well-known lawn and turf care badges but the process wasn’t able to initiate a sales conclusion and has now put any opposition badges in a position to nibble off the carcasses of their former high-profile competitors.
For the Briggs & Stratton lawn and turf care lines to continue, a sale will need to be seamless.
In these COVID-19 times, any disruption to dealer supplies will be counted as expected fewer sales in a diminishing market where many badges will simply disappear without a trace, anyway.
The timing couldn’t be worse, if the Ferris or Simplicity badges were discontinued, other brands will cover their product lines without any consumer sentiments of loss.
It is with the engine brand itself where the most hurt would be felt.
Briggs was always a power-house in this OEM sector and with so much cash coming in, it decided to venture into retail in 2004 when it purchased Simplicity for us$227.5 million.
The Simplicity lawnmower business was privately held and based at the time in a manufacturing plant at Port Washington Wis. USA. It was a widely held view that the Simplicity plant needed investment and modernisation.
The purchase included Simplicity and Snapper, selling commercial lawn tractors and mowers under the names Ferris and Giant-Vac.
This added lawn mowers and lawn tractors to the Briggs & Stratton product line for the first time.
Up until then Briggs & Stratton Corporation was a maker of small engines.
Based in Milwaukee, the retail product lines offered by Briggs & Stratton included power generators, pressure washers and outboard motors.
The Simplicity badge could entice a US history buff to splash out on a purchase as the company does have a rich history.
The company was founded in 1922 by William J. Niederkorn and by 1939 went into the manufacture of engine powered two-wheel garden cultivators.
Simplicity built its first rise-on lawn tractor in 1957, affectionately known as the Wonderboy.
Allis-Chalmers recognised the potential and bought the company in 1965. Only to see the Simplicity staff buy it back in 1983.
Simplicity Manufacturing celebrated its 75th anniversary in 1997 with a special Simplicity Sovereign 75 year lawn tractor model painted in a blue livery with chrome Harley-Davidson headlamps and muffler. It had a 13kW (18hp) Kohler engine and 122cm (48-in) deck.
Simplicity also built lawn mowers and lawn tractors for many big corporations including Deutz Allis and AGCO.
And after AGCO bought Massey Ferguson, Simplicity began building and selling the Massey Ferguson garden tool range.
Simplicity bought Snapper in 2002. Snapper had been manufacturing Massey Ferguson lawn tractors for several years previously.
Since 2004 Simplicity has been controlled by Briggs & Stratton and while they may be seeking to get some of the us$227.5 million back, there are bigger fish to fry.
In 2004 Briggs & Stratton stock peaked at us$40 a share, while prior to its just filed application for court protection the stock was just $0.80.
The bankruptcy protection filing lists its current debt with creditors at just over us$1 billion. The company has been operating at a loss since 2017.
At best, the chapter 11 bankruptcy protection will allow the company to restructure with the sell-off of some assets and continue on, or a purchaser may have to be found to take over the B&S brand name.
It would be unlikely the Briggs & Stratton name will disappear. The company has been making small engines since 1908, and they are popular.
Its single-cylinder, 3.6kW (5hp) Briggs air-cooled model alone is in millions of lawnmowers, mini-bikes and go-karts.
And while Briggs & Stratton will take a small bruising, but no doubt have a new owner, the company is expected to move on from this period. Albeit with a blot of us$1 billion to be explained away to hapless creditors.
It will no doubt continue to supply engines to manufacturers including Viking, Toro, and Deere & Co, Craftsman, and Husqvarna.
Once the Simplicity carve-up takes place, the company can continue into its core business of making millions of engines a year, and getting back into profit.