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.