Engine manufacturer Briggs & Stratton Corp. is filing for Chapter 11 bankruptcy almost a year after the corporation announced it would be closing its long-time plant in Murray, affecting 600 employees. Yet, a local economic development leader says he expects the bankruptcy proceedings to ultimately have little local impact.
Milwaukee-based Briggs & Stratton in a statement Monday to MarketWatch said the COVID-19 pandemic made the bankruptcy filing to reorganize the corporation a difficult but necessary path to secure their business, and that the corporation is getting $677.5 million from KPS Capital Partners and existing lenders to continue normal operations.
“It'll take a while for the dust to settle. But I don't honestly think that it will have a tremendous impact on Murray, Kentucky, one way or the other,” said Mark Manning, President of the Murray-Calloway Economic Development Corporation. “It’s really sad to see a company that kind of is an American standard go away, or if not go away, at least decline.”
Manning said “the damage is done” in regards to layoffs by the corporation, and that much of the local uncertainty lies with the future of the Murray plant building. Manning said when he previously told Briggs & Stratton that buyers were interested in the plant building, the corporation responded the building was “under contract”, in having a potential buyer already lined up. Manning also said the controlling entities of Briggs & Stratton once bankruptcy proceedings finish could decide to sell the building themselves.
“There's always that one-in-a-million chance that they could reopen the plant, but I find that wishful thinking,” said Manning. “We're just going to keep doing what we do, and that is let people know that we've got a good place to manufacture.”
Manning said about 100-200 affected employees from the plant closure have found new employment. In a separate statement to WKMS, Briggs & Stratton spokesperson Rick Carpenter said 15 employees remain at the plant, with the plant still on schedule to cease operations this fall.
Carpenter in a written statement also said the corporation will have to wait to see from the bankruptcy court to determine any potential impacts on former employees, particularly on pensions.
“We do not yet know whether the bankruptcy filing will have any other impact on pension benefits...and it may be a number of months until we do,” Carpenter said. “In no event would pension plan assets be used to satisfy claims of the Company’s creditors. By law, all pension plan assets would be used to provide benefits to Plan participants.”
Carpenter also noted a specific type of pension plan for former employees could be limited to a maximum of $5,000 of benefits until during or after the corporation emerges from bankruptcy proceedings.
