It has been widely reported in the German press today that famous wheel maker BBS has once again declared bankruptcy and will try to restructure.
Very sad indeed.

http://translate.google.com/translat...n&hl=&ie=UTF-8

Sorry for the Google translation.

 

I guess cause they havent really adapted to the changing market - there are only so many people out there that will pay for the standard styling at the inflated prices...

 

BBS is one of the worlds leading wheel manufacturers so dont kid yourself to think what they do is anything but state of the art.

They are leading OEM and wheel supplier and there involvement and capabilities are second to none in terms of quality.

It is unfortunate but perhaps a good way to trim the fat.. Its the sign of the times for many companies that are global.

 

Doesn't every European company do the euro version of chapter 11 every 5 years or so when possible?

It's the only way to have a change to get the permission from the judge to let some people go.

You know, the ones that are past their trial contract with an age determinded (Not performance) salary with a company car, gas card and company phone but rarely show up, except to tell the owner that "they can't take it anymore" but won't resign either..

 

They have been making many restructuring changes for awhile, and I'm not sure if this is a result of this or not. BBS USA gets its lead from BBS in Germany, and they are still off for the holiday. So it will be a week or so before we get more from them. Until then we are not speculating.

 

It would appear from the google translation that what they are shedding is their OEM business.
We know the story well. Three years we made the forged wheels for the Corvette and the Viper. Huge volume, no profit. NO PROFIT! They want your very best work and want to pay nothing for it. And, if you let them, they will put you right out of business. Let the OEM's just try to replace a vendor like BBS. If they call us, we'll hang up on them.

 

Isn't it your fault you made no money?
If you agree to sell at a certain price that makes no $$ you are a fool....

 

Alas, if it were only that simple. The OE's constantly grind you for cost reductions. They commit to a quantity and then, if their business is slow, they just stop taking whatever they have on order. Try to force them, and you have a 5-year legal battle on your hands. The sudden drop in volume crushes your profits.
But if you are one minute late with an order you pay ridiculous penalties.
They force you to expand your facility and increase your overhead and then screw you for the tiniest reason.
If any of you wants to deal with them, I wish you lots of luck. You'll need it. The volume always sounds seductive, but you will soon find that you are in bed with a porcupine. Every contact will be painful.
I'll bet my BBS friends are nodding their heads. How about it Craig?

 

+1..

 

simple economics....material and operational cost have gone up. Profits have dropped, too much overhead and decreased demand as competition has taken away some/a lot of market share ......BBS must trim the fat by finding multiple ways to lower all the operational cost in order to increase profit.....and/or file for Bankruptcy/ or be bought. I hope that BBS can weather the storm....

 

Hi Mike... (nod, nod...)

The intent is to re-focus on our core business in Schiltach; Motorsports, OES business (Ferrari, Porsche, etc… and including our US based programs with Ford, Toyota, etc.), High-end aftermarket and Technology development. (Schiltach is the BBS headquarters and is responsible for all engineering, development, high-end and specialty production, etc.)

The plant in Herbolzheim is for high volume standard OEM production. Standard OE business is a lot of volume that generates large sales, however (as Mike pointed out...) this is done at a very low profit margin. There are wheel producers that are very good at producing these standard OE products, it has always been a difficult thing for BBS to compete at the low prices to the OEM's for these run of the mill type OE wheels. (The OES (original equipment specialty) segment is something that fits BBS very well, lower volume, high-end products.)

BBS began life as a "Racing wheel" company (in Schiltach), several years later they began producing some aftermarket wheels and a few years later some "Specialty" OE wheels (OES). BBS is just returning to our core business.

(also, Thanks to Fabryce, Damon and others for all of the support...)

Talk with you later Mike,

Craig

 

This is BBS' official word, sent to us by the head of their US operations in GA last night:

To our valued customers,

BBS has been the recognized leader in the premium wheel category for 40 plus years. As BBS of America, Inc. brings to a close the 2010 year in a much healthier manner; we are very bullish on the 2011 year with a much stronger program in all phases of the North American business.

However, some difficulties have beset our parent company, BBS International GmbH. While not posing any immediate difficulties to our North American operations, we want you to be aware of this information.

BBS International GmbH has filed for Insolvency Protection in what amounts to be a Management Reorganization (similar to our Chapter 11 protection) during a difficult period while in negotiation to sell the one high volume plant in Herbolzheim, Germany. While the sale of this plant (high volume production plant for the OE market) is pending to the Ronal organization, it put undue pressure on credit within BBS International GmbH. This filing will enable BBS International GmbH to continue to do business as usual while the Management is restructured and the sale of the Herbolzheim plant is completed. The sale of the Herbolzheim plant will allow for further investment and streamlining to be made at the Schiltach operation (BBS International GmbH headquarters). The investment in the Schiltach operation will enable BBS to re-focus on its core business of high end Aftermarket, Motorsport and Premium Original Equipment product for the worlds leading automotive manufacturers.

BBS of America, Inc. is in business and is fully operational. The plants in Germany are also fully operational and product is due to be released after this holiday period in the normal manner. The new German product that we have arriving for the spring selling season is still on plan. Our forged wheel business with our partner BBS Japan is also unaffected as we have some new offerings on the forged side of the business also arriving in the spring.

We will do all that is possible to support our customers during this time. We fully expect to continue with our aggressive business plan in 2011.



Hopefully this clears things up. BBS isn't going anywhere anytime soon.

 

See? Told ya..

 

BBS produces a remarkable product and employs some of the sharpest minds in the wheel business. I wish them well in their reorganization effort.

IMHO, BBS Germany's woes are a reflection of many of the problems that still afflict the OEM Car Manufacturing business. It is a wickedly competitive business and many OEMs, rather than working hard to succeed through innovation and increased productivity, saw fit instead to abuse their vendors to the brink of disaster.
There is a likely result to this insanity. Suppliers like BBS say "thanks but no thanks", retreat from the industry and the OEMs lose an important resource.

Methinks there's a lesson here for all of us.

 

Business as usual?

When you compete on price you lose on quality. The manufacturers know this and I'm sure they even hate it, but for the mass market you compete on price. Volume manufacturers can afford to lose a quality supplier because the entire market is affected by the loss. They MUST pressure their suppliers on price, always.

It's the ebb and flow, no big deal really.