Johnnie Cordell Breed is fighting to save her company even as her husband - company founder Allen Breed - is fighting for his life.
The 15-month financial crisis at Breed Technologies Inc. - the company sought Chapter 11 protection last month in U.S. Bankruptcy Court - has been matched only by the struggle to keep her husband alive.
He is seriously ill with lung cancer but 'he tells me every morning, `I will live through today; your job is to save the company,' ' Mrs. Breed said in an interview.
Allen Breed is to be inducted into the Automotive Hall of Fame Oct. 12 in Dearborn, Mich. Her hope, she said, is that Allen can attend the ceremony. Her husband's latest honors will not ease Breed Technologies' struggles. Chapter 11 protects the maker of airbags and seat belts against creditors' lawsuits while it reorganizes.
But it does not halt the drain of Breed brainpower. Mrs. Breed, Breed Technologies' CEO, said she will ask the U.S. Bankruptcy Court in Delaware for permission to offer cash bonuses to key employees. She still hopes to emerge from bankruptcy court next year in charge of a slimmed-down, debt-free parts maker.
'It gives us an opportunity to breathe and go forward,' she said.
She said she plans to restructure Breed's debt and overhaul its cost structure. If she can persuade an array of bankers and bond holders who hold $1 billion of Breed debt to swap it for equity in the company, she has a shot.
'There is no shortage of people who want to invest money in this company,' she said in an interview from her headquarters in Lakeland, Fla.
But if Breed's creditors remain wary, they will demand the sale of assets and recover what they can. She acknowledged the odds against her, adding 'I'm not unrealistic.'
She said Breed's investment bankers are proceeding with efforts to sell all or part of the company. Prospective buyers who have toured Breed include competitors TRW Inc. of Cleveland and Autoliv Inc. of Stockholm, joint venture partner Siemens AG of Munich, Germany, and financial buyer Penske Capital Partners LLC, according to two sources familiar with the situation.
Mrs. Breed contends that part of the company would survive an asset sale. How much is not clear, but she said the Breed name should continue.
'I want the Breed legacy to be a company that fought to be here -two people, Johnnie and Allen Breed - who literally gave everything' for the company.
Mrs. Breed said her immediate goal is to maintain Breed's business ties with General Motors, Ford Motor Co., DaimlerChrysler, Fiat and others who last year generated $1.4 billion in revenue for her company. Those contracts are critical to getting top bids for Breed's assets to cover debts of $1.6 billion. 'They determine the value of the company,' she said.
Mrs. Breed, 55, said she intends to meet her company's obligations 'even if it means working for the next 20 years.'
Her second goal is to protect employees. 'A lot of people are counting on me to put bread on the table.'
She acknowledged her error in buying AlliedSignal Inc.'s Safety Restraint Systems division, the acquisition that landed the supplier in bankruptcy court.
Breed paid $710 million for the AlliedSignal operation only to find that its cash flow could not cover the debt. Breed filed suit against AlliedSignal in August.
'I'm not the first person to get taken buying a company,' Mrs. Breed said, 'but bigger companies can absorb the losses.'
She defended the growth strategy that has resulted in 11 acquisitions since 1994 - and the accompanying debt burden: 'It was essential to the economics of a global supplier ... it was all integrated and assimilated; we have capable people here.'