It is uncertain what impact the bankruptcy filing by Briggs & Stratton will have on its plant in Auburn, where the company’s 575 workers make it the second largest manufacturing employer in Lee County.
On Monday, the Wisconsin-based company, more than a century old and the world’s largest maker of gasoline engines for outdoor power equipment, sought Chapter 11 protection from creditors in a St. Louis bankruptcy court.
Debt of more than $1 billion is the leading cause of the company’s falter. Sales have also been down, in part owing to the virus crisis, but also because of the bankruptcy of Sears, one of its traditional sales outlets, and an increase in competition from other manufacturers and their sales outlets in big box stores.
In 2018, Briggs & Stratton announced its investment in a major distribution center Auburn, naming it as one of two principal U.S. distribution points, after consolidation of smaller units.
In 2017, the company announced an investment of $12 million in an Auburn expansion to begin production of Vanguard commercial V-twin engines, its leading product line.
Those recent investments no doubt added to the company’s debt, but they also make the Auburn facility a valuable asset in the process of streamlining and asset selloff.
Briggs & Stratton’s bankruptcy filing included a $550 million bid for the company from KPS Capital Partners, a New York private equity firm, which promises to keep the company in operation while reducing its debt.
In April 2019, Briggs & Stratton’s stock (US:BGG) hit a 44-year low, plunging 44.5 percent on news that it missed a dividend payment and was closing a 630-worker manufacturing plant in Kentucky.
Trading of the stock was halted Monday after announcement of the bankruptcy filing. According to Bloomberg, KPS’s offer wouldn’t be enough to cover all the outstanding obligations, “which means that shareholders could be wiped out.”