Bosal enters administration

by Will Rimell

Exhaust manufacturer Bosal has today confirmed that it has entered into administration.

The Preston-based business said the market's switch to longer-lasting stainless steel exhausts, and a move by rivals to production facilities in Eastern Europe and elsewhere, had impacted on the viability of the company and left it unable to pay its debts.

Bosal also said the legal action taken by 48 former employees, to secure enhanced redundancy payments, was a third key reason behind the financial difficulties of the business.

Although chiefly know for it's exhaust systems, Bosal also supplied roof boxes, racks, towbars and cycle carriers. A recent OE contract had also been won to supply Land Rover with exhaust systems for the Evoque.

Statement dated 11 January 2013

The Directors of Bosal UK Ltd announce with regret that they have been forced today to place the Company into Administration under the control of Joint Administrators Phillip Duffy and David Whitehouse of Duff & Phelps Ltd, Manchester.

This move follows a decade of strong support for Bosal UK from its owners in the face of a mix of factors which over time increasingly impacted on its viability, including:

  • A fundamental transformation in both the UK and Europe of the automotive aftermarket. In particular, the introduction of stainless steel has seriously impacted on Bosal UK's key product line – largely the replacement car exhaust systems. The fitment by vehicle makers of longer-lasting original equipment systems has done much to reduce demands for these products.
  • Moves by Bosal UK's key competitors to implement 'rightsizing' restructuring measures as well as switching production to best cost country sources in Eastern Europe and elsewhere. This process has drastically rewritten the competitive environment.
  • A long running legal challenge to Bosal UK by a group of 48 former employees claiming that they should benefit from an enhanced redundancy package negotiated more than 8 years ago in very different economic conditions. Bosal UK has appealed against a court judgment but has failed to overturn the original ruling, with potentially multi million pound consequences for the company in relation to a liability to both this group of former employees and potentially to its remaining employees.

Given all of these factors the Directors of Bosal UK believe that the company is unable to pay its debts and the future prospects for Bosal UK's business and for its manufacturing operation near Preston can best be determined by a formal administration process which began today. The Joint Administrators can now use their best endeavours to secure a long term future for the business either as a single entity or in parts.

The directors of Bosal UK are committed to assist the company in continuing to serve its existing customers and will give all assistance to the Joint Administrators to achieve this to secure the best possible outcome for all other stakeholders of the business.

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  1. Absolutely stunned by this news. A company who has a astonishingly fantastic reputation for quality, price and availability ? Wow! Something tells me that nodal won't be the only big name casualty in the auto aftermarket and exhaust supply chain
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  2. There could be some serious consequences for the Factors and Kwikfit etc. Will be interesting to see what they do.
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  3. I would be interested to know if Bosal UK can now get out of their liability to the ex employees who took them to court and won. It would "save" them millions! The company will no doubt survive due to it's global businesses and will be bailed out by their Europe arm or similar. Will it go belly up first and rise like a phoenix with all it's debt gone? Can't see a buy out as Klarius is cutting back already and I can't see Tenneco wanting it.
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  5. The grapevine indicates Klarius aren't in much of a better position either so i can't see that happening. The group won't want to loose all the UK sales, they still need the volume being manufactured by other plants within the group as it would have a knock on effect. Manufacturing in the UK is possibly over but the sales and distribution will be a primary concern for the group. They will try and retain it if possible. Question is will it come off, administrators are in and protocol is now in place.
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