Investors fear that the collapse of the car parts company – and the size of its debt – could portend wider problems
Financial problems at the maker of spark plugs, wiper blades, brake calipers, brake shoes, tow hitches and motor oil has caused intense anxiety on Wall Street in recent weeks.
Car parts are not usually something that causes finance chiefs to lose much sleep. But the potentially multi-billion dollar financial crisis surrounding First Brands has them rattled.
As ever in finance, it’s what investors don’t know that scares the most, and with First Brands, there appears to be plenty.
First Brands was founded by the Malaysian-born businessman Patrick James. Starting life as Ohio-based Crowne Group, James acquired Trico, best known for windshield wipers, and went on a debt-fueled acquisitions spree, snapping up auto-focused parts makers. James rechristening the company as First Brands Group in 2020. It now owns 24 automotive-related companies, according to the group’s website.
