DETROIT - With its financial crisis seemingly behind it, Breed Technologies Inc. could again become a contender in the automotive seat belt and airbag business.
The Lakeland, Fla., company has obtained a $125 million line of working capital as part of its emergence from Chapter 11 reorganization last December. Breed now is privately owned by its lenders.
'You will see Breed rising from the ashes and start pulling everything together soon,' said Scott Upham, president of the safety systems consulting firm Providata Automotive of Ann Arbor, Mich., and an adviser to several of Breed's creditors.
He said Breed's new management is mending fences with its Big 3 customers and is prepared to resume its competitive ways as it looks for new business. Breed had sales of $1.3 billion in the fiscal year ended June 30, 2000.
New name is possible
Stuart Boyd, Breed's vice president for legal affairs, said the company may change its corporate name following its highly publicized financial troubles.
Breed sought Chapter 11 protection in federal bankruptcy court in Delaware on Sept. 20. 1999. The company no longer could cover its massive interest payments on debt from a string of 11 acquisitions during the past decade.
Its shareholders were wiped out in the court action. The Chapter 11 plan cancels part of Breed's $1 billion outstanding debt and converts the rest into new shares held by the auto supplier's 40 lenders.
Breed's problems with customers culminated with a fight between former CEO, Johnnie Cordell Breed, and General Motors. In September 1999, Breed nearly shut down nine GM assembly plants after she suspended seat belt shipments for GM's hot-selling pickups for three days because of a pricing dispute. She could not be reached for comment last week.
Johnnie Breed stepped down in October 2000 and was replaced by John Riess, the former CEO of Gates Rubber Co. One of his directors is Jack Reilly, a 30-year auto industry veteran who was CEO of Tenneco Automotive from 1995 through 1997.
Breed is expected to compete on price, rather than with the latest technology in airbags and airbag sensors, because it has fallen behind in technology, Upham said. Breed needs more business to fill its plants, some of which are running below 50 percent capacity, he said.
Autoliv, TRW, Delphi Automotive Systems Corp. and others were offered a chance to buy part or all of Breed during its financial troubles, but declined.
Breed has 16,000 employees worldwide.