Briggs and Stratton, the world's largest producer of gasoline engines for outdoor power equipment, an American Fortune 1000 manufacturer of gasoline engines with headquarters in Wauwatosa, Wisconsin.
Engine production averages 10 million units per year as of April 2015.
The company never drove the kind of transformative innovation that could have helped it grow beyond the reach of the challenges it is facing.
Todd Teske, Briggs’ chairman, president and CEO, and his board of directors, made the fateful decision to continue providing returns to shareholders rather than plowing money into new product development.
Briggs has spent $167 million on research and development but $239 million on share repurchases since its 2012 fiscal year, according to securities filings.
According to Wamboldt, external factors that walloped Briggs included:
Rising steel and aluminum prices;
a decline in brick and mortar sales;
extremely unfavorable weather patterns that disrupted seasonal sales;
a bankruptcy filing by Sears, Briggs’ largest customer;
the trade war with China
Briggs and Stratton agreed in its bankruptcy filing to sell all of its assets to a New York private equity firm for about $550 million.
So, I'm guessing the CEO and board of directors will profit handsomely, have a golden parachute, and walk away into retirement. All for running a company into the dirt, and being greedy
https://biztimes.com/viewpoints-lack-of-innovation-explains-collapse-of-briggs-stratton/
So sad, it was one of the last brand names you could implicitly trust. If you saw B&S on the motor, you knew you could get parts anywhere and it would last, like seeing "Coleman" on a camping stove :(.
ReplyDeleteone more iconic Made in USA company KIA. One of the greats, that never stole the headlines, they just kept working away in the bachground
DeleteThe so called trade war with China should have helped Briggs with sales. Unless they were selling Chinese built engines.
ReplyDeleteChalk up another win for the private equity companies who are gradually destroying economies worldwide.
ReplyDeleteNot so much a trade war. Slave wage labor in the eastern Asia made the price competition really unfair and put BS in a difficult position. Management screwed up as it was said by rewarding major stock holders by robbing the treasury when the company could least afford it. You see Briggs and Stratton labeling on products that are not related to the primary business at all which indicates that management essentially abandoned their primary market hoping to fill the void that declining sales caused. Oddly enough, Kohler is still out there making their products and managing to be competitive. Has to be a lesson in there someplace.
ReplyDeleteif a private equity buys the business you work for , you better get busy hunting another job, cause they are toast. B&S did alot of damage to themselves, same as Sears. the top folks got millions, and everyone else lost their jobs.
ReplyDeleteYup, you are on point.
DeleteI had Briggs as a customer off and on when I was at Champion and Autolite. I didn't know about the company spending so much on stock buy-backs, but I'm not too surprised by this. Briggs is at the lower cost side of engine manufacturing and they were facing more competition from cheap Chinese made engines and now electric mowers. Kohler is more technically advanced and into bigger engines for zero-turn mowers, so they will probably do better. They also have the plumbing business to help make money.
ReplyDelete