First Brands is nearing a settlement agreement with its creditors as the company pushes to sell off its business lines, relying on continued support from customers such as Ford and GM to help close the deals.
The details: The bankrupt auto parts supplier has been unable to secure a single buyer for its operations due to the extent of the alleged fraud tied to its founder, Patrick James, forcing it to try to unload its business lines as separate entities, reports Reuters.
First Brands’ four business lines consist of Walbro, Horizon, TMD, and Pump, with Ford currently buying parts from the latter three.
Sales of the four business lines are being supported by Ford, GM, and other major automakers that have prepaid for parts to help keep the supplier operating.
Customers like Ford are also eager to see the business lines sold to limit disruption from the bankruptcy.
What they’re saying: "Every day that these operations are not put into the hands of a more stable operator, there is a risk of production to Ford and other (original equipment manufacturers)," said Ford’s attorney, Mark Freedlander, per Reuters.
Why it matters: Dealers don’t source components directly from suppliers like First Brands, but they feel the ripple effects when OEM production or parts flow gets squeezed—through tighter new-vehicle availability, delayed service repairs, and longer wait times for certain components. Any instability in a major supplier network can show up as customer frustration at the counter and on the showroom floor.
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Between the lines: First Brands’ push to sell its business lines and settle with creditors underscores the urgency Ford’s Freedlander described, after the auto supply company filed for bankruptcy protection on September 28 with more than $9 billion in liabilities.
Although the supplier has not resolved certain claims among its lenders and creditors, it is still pursuing asset sales without a finalized agreement on how proceeds will be distributed.
First Brands expects to spend about two weeks in mediation to finalize an agreement with lenders and junior creditors on the terms of its bankruptcy exit.
Bottom line: Dealers should watch for OEM guidance on any production or parts impacts tied to these business lines, set expectations early with customers if repair timelines lengthen, and lean on proactive service communication as the sales process plays out.
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