Briggs & Stratton to BK Court??

Interesting item in today's JS business section.

...Briggs & Stratton Corp., which once employed about 11,000 people in Milwaukee and rose to fame as the world’s largest producer of small gasoline engines used in outdoor power equipment, has been slammed by plummeting sales from the COVID-19 pandemic, foreign competition and dried-up capital markets for refinancing debt and selling assets.

As of Dec. 31, the company had net debt of $581 million and faced an “increasing likelihood” of a default or restructuring, according to S&P Global Ratings. In mid-June, Briggs did not make a $6.7 million interest payment, triggering a 30-day grace period before it constitutes a default on a credit agreement....

Well, yah, the Kung Flu probably had an impact.  Was that all?

Hardly.  Buried very deep in the article is this graf:

...The company has been battered by not only COVID-19 but also foreign competition and the loss of large customers in the outdoor power equipment business....

When John Shiely and Fred Stratton Jr. decided to purchase Simplicity, Troy-Bilt, and Snapper outdoor power equipment companies (and later, under another President, becoming the owners of MTD through another BK), thus creating "vertical" integration, they also alienated every other OPE firm to one degree or another.  As one major player said to me:  "Why should I finance my competitor?"  Aside from Toro--which still uses BASCO engines--other majors such as Ariens, Cub Cadet, and Husqvarna, walked away from Briggs engines.  They also handed Kohler the large-engine business, where some margins remain.

Further, when BASCO committed to Toro, they were forced into price-competition when selling into Wal-Mart and Home Depot, just as with their own MTD and Snapper lines.  In other words, their margins were under serious pressure at the same time as they were losing accounts.

BASCO's wars with its labor force certainly didn't help, and its plant-dancing (open here, close there, move to hither-and-yon) is not without cost; hiring and training people, not to mention tooling up....

Business-school kids will be looking at "vertical integration" and "pursuing volume" for a number of years, and Briggs & Stratton's history will be worth a couple of chapters in the textbooks.