What is the situation with Champ Labs and FRAM?

[Vern_in_IL]

Quote:
FRAM is moving all FRAM branded products away from Ecore to to the severance of Champion Labs from FRAM.


So I thought FRAM FILTRATION and CHAMPION LABS(UCI) were under the same company, RANK GROUP

I don't see Champ listed on Rank's website, so basically RANK just gave up the UCI Components to the bankruptcy court???

How did RANK get out of this mess and why didn't CHAMP merge with Fram Filtration sooner? There was a a lot of mixing going on between the two anyways.

I don't understand how the Rank Group works, so they bought UCI Components, boss them like holy saints, but yet have no liability for the debt load? How does this work.

 

[bvance554]

What?! I don't know. The struggle some people face. Shopping online, or in the store, you find yourself looking at your choices and trying to figure out who bought who. Tearing the boxes open to see whats really inside... is it an e-core? God forbid it has fiber end caps. Is this really a Purolator disguised as something else? What are you saying?

 

[Sayjac]

Originally Posted By: Vern_in_IL
Quote:
FRAM is moving all FRAM branded products away from Ecore to to the severance of Champion Labs from FRAM.


So I thought FRAM FILTRATION and CHAMPION LABS(UCI) were under the same company, RANK GROUP

I don't see Champ listed on Rank's website, so basically RANK just gave up the UCI Components to the bankruptcy court???

How did RANK get out of this mess and why didn't CHAMP merge with Fram Filtration sooner? There was a a lot of mixing going on between the two anyways.

I don't understand how the Rank Group works, so they bought UCI Components, boss them like holy saints, but yet have no liability for the debt load? How does this work.

Champ Labs Filters did fall under the 'Fram Filtration' umbrella after Rank bought both, Champ Labs first. At least that's how it was reported. With Champ Labs bankruptcy it appears that relationship is now 'severed'? Just to be clear, the original quote here came from the Fram rep that posts on bitog, primarily the oil filter board.

I'm not sure how the Rank Group Champ Labs bankruptcy liability issue works either, but from 'my perception' it does appear to be a cheesy way to do business. Looks like a one way street, take the good from Champ Labs but when things get tough time to bail out and leave Champ Labs holding the bag.....

 

[Garak]

Cheesy as it sounds, it's probably quite intentional. There is a fair bit of wisdom in keeping companies separate that way, and owned, in the end, by a shell company, that simply collects rent and/or dividends and/or franchising fees, or what have you. If the downstream company can't make any money, well, sorry, the land and tooling are owned by someone else, and the bankrupt company just pays rent. The holding company just has to swallow the rent liability, while the downstream company skips out on payroll and paying suppliers.

 

[4WD]

You talking about filter companies or Chrysler ?

 

[Vern_in_IL]

Originally Posted By: Garak
Cheesy as it sounds, it's probably quite intentional. There is a fair bit of wisdom in keeping companies separate that way, and owned, in the end, by a shell company, that simply collects rent and/or dividends and/or franchising fees, or what have you. If the downstream company can't make any money, well, sorry, the land and tooling are owned by someone else, and the bankrupt company just pays rent. The holding company just has to swallow the rent liability, while the downstream company skips out on payroll and paying suppliers.


That is a terrible way to run a business. A scam really, and a foreign scam to boot. If this is how New Zealanders ruin American businesses and jobs, I have more respect for Kim Dotcom.

BTW UIS was somewhat similar, except it was private, and UIS specialized in buying companies and turning them around, buy providing strong financial backing for the companies. UIS only ended when the heirs did not want the company.

 

[Garak]

4WD: Both!

Vern: Well, it may seem terrible from some perspectives, but it's good from a business perspective, and it's a lot more common than you think. This isn't some New Zealand ploy. It's done here all the time and I highly doubt it's unknown in America. My own businesses are set up that way. The simplest way to protect the real estate and the capital goods are to have them owned by someone else, and rented to the operating company. The operating company fails, the holding company still has something to sell that's free from liens and seizure.

 

[HerrStig]

Originally Posted By: Garak
4WD: Both!

Vern: Well, it may seem terrible from some perspectives, but it's good from a business perspective, and it's a lot more common than you think. This isn't some New Zealand ploy. It's done here all the time and I highly doubt it's unknown in America. My own businesses are set up that way. The simplest way to protect the real estate and the capital goods are to have them owned by someone else, and rented to the operating company. The operating company fails, the holding company still has something to sell that's free from liens and seizure.
That's good thinking unless you have to pledge the real estate and equipment as collateral for operating capital.

 

[Garak]

In many cases, of course not all, though, the holding company can secure the loan or provide the loan.