BBS to file bankruptcy

Didn't understand half the mumbojumbo deal in the article.

Hope they are able to stay afloat. They make very good stuff. Just a bit out of my price range =(

Exactly what i'm thinking.

Ricemaster - "what the hell did they do with all that money..."

Firstly - the margin on wheels are somewhat thin, especially on lower volume products.

Secondly - The trend towards stock products has hurt many autosuppliers as aftermarket sales are somewhat higher margin, but if your core demand goes down from a fundamental market shift, there's not much you can do. Besides, keeping decent looking stock products on your vehicle I believe keeps your warranty fully intact....

Thirdly - Aluminum spikes are a huge issue in both automotive (which are increasingly becoming a larger component within vehicles due to lower weight and tensile strength) and aerospace components - many others are feeling the hit

Fourthly - bankruptcy can happen for a lot of reasons, including placing leverage upon the Company in which case if the Company finds itself without operating profit (due to lower sales, high fixed cost bases, and higher supply costs), it might not be able to make its interest payments. Cash on the balance sheet that sits idle is not very common in mature industries such as auto because it is essentially underutilized - shareholders will often pressure for a cash distribution or investment in machinery/equipment.

So - to all those who are saying it was a case of poor money management - please look at all the auto suppliers and aftermarket suppliers declaring bankruptcy, many of them run by some of the world's best money managers (such as Collins & Aikman, which was run by David Stockman, Reagan's former director of budget administration and one of the original guard of Blackstone, arguably one of the best private equity funds out there).

I think the trend these days are cars are not 'modified' enough as the stock cars are appealing as is. There is no need to look to the direction of aftermarket when the factory makes wheels just as nice or have options to make it just as aggressive as the tuner brands (especially the AMG's, M's, S/RS's)

I think you're right, Im really seeing improvement on OEM wheel selection.


G

I dont totally agree. Like I think the best rims ever are the ones on my M5. I would never think of changing them to after market rims that dont seem to 'fit' with the car.

RICEMASTER "no stock car is ever appealing enough"---you gotta be kiddind me. M3 wheels look best in my opinion. All that aftermarket stuff is garbage, it might "look" gansta, but trust me...it aint.

"Haters who love boring stock cars" sorry RICEMASTER but I rather be seen in a boring stock car than a car that everyone is laughin about. example (2001 honda civic wit a huge wing, not painted body kit, 2 piece muffler)

I do agree wit you that it's a simple case of poor money management for BBS.


G

MMM.........i don't totally agree with you ricemaster. There are import tuners and there are euro tuners. Two different types of tuners.

For imports the typical first upgrades are the exhaust tips, rims, followed closely by a spoiler or bodykit, and then perhaps some lowering springs. Nothing has been added to increase it's performance. Import tuning comes with a less expensive price where the parts are more affordable yet still producing a lot of HP. As for euros typically they go for rims and a good set of shocks/springs for supreme handling then followed by engine upgrades. This is what I SEE in MY CITY so i'm basing judgment on that. Now in comparison price for parts for Euros are generally more expensive. What i'm getting at is that to get the same amount of power it's easy to say that the Imports are easier to modify compared to the Euros. I see far less Euros modified than the Honda(Acura), Toyota(Lexus), Nissan(Infiniti) out on the roads.

However it comes down to people's loyalty to their favorite brands. I just believe today's stock OEM options look good enough that people may not even want to aftermarket their car. I think there is no need when the M3 looks the way it does or the AMG's look the way they do or the RS4 the way they do. The OEM parts look absolutely amazing.

Now this brings up another topic...age group. The younger tend to like to modify their cars whereas mature can live with oem parts. And even if those mature folks have tuned vehicles, they have another car for daily driver whereas the younger drive their tuned cars as daily drivers.

This is all in my perspective based on what I see in the provinces and states on the west coast.

-Agent63

Status of BBS Germany…
Here are a few facts...

First, BBS AG will be going through a restructuring process, they are not going out of business. (Has anyone flown Delta Air lines recently??… they have been in Chapter 11 restructuring for almost 1 ½ years and they are recovering quite well). Higher material costs, labor costs, investments in more advanced production equipment and other factors have not helped BBS grow in the very competitive worldwide wheel business. Products from China and other low cost countries have had a huge impact on the industry. BBS in Germany has not adapted quickly enough to the changing times.

All of the BBS road wheels from Germany are made from cast aluminum and they have a variety of unique processes that allows them to build special one piece and two piece wheels for aftermarket and OEM customers. More than 70% of BBS's product is produced for the OEM market.

BBS has been around for over 35 years and has always been the technology leader in this business. Developing new processes and engineering products to compete in F1, does come at a price. Some companies will just steal a design and take it to market, not a lot of investment needed to copy or follow... it takes a much larger commitment to lead.

Second, All of the forged BBS wheels (RSGT, LM, RGR, RE, RVF and RGF) are produced in Japan by Washi Beam, a long time partner company to BBS Germany. Washi Beam produces die-forged wheels for Subaru, Mitsubishi, Aston Martin, Bentley, Lexus, Mazda and a few others as original equipment. They also produce the forgings used to produce F1, Indy, ALMS and other BBS racing wheels for programs around the world. Washi Beam is 100% independent of BBS Germany and Washi Beam is not involved in ANY bank or financial related issues. BBS Germany and Washi Beam started working together back in 1983... Remember the original 3 piece RS wheel? Washi Beam produced all of the die-forged wheel centers for these wheels.

Third, BBS employees are working and wheels are still being produced. Certainly there will be some changes… this will only be known once the restructuring process is farther along.