Photo: Garrett Motion
Forced induction goes a long way back. Gottlieb Daimler laid the groundwork in the 1880s after which Swiss engineer Gebruder Sulzer patented the turbocharger in 1905 for a radial engine. Fast-forward to the 1960s, and that’s when General Motors offered turbocharged passenger cars in the guise of the Corvair and Jetfire.
This kind of forced induction started gaining traction in the 1970s, though, after the oil crisis wreaked havoc and the U.S. added new amendments to the Clean Air Act. Fast-forward to the present day, and it shouldn’t surprise you that turbos outnumber superchargers in production cars and commercial vehicles.
Garrett is one of the nameplates we often associate with the snails that deliver more air to the combustion chambers, and even though it’s a giant in this line of business, the company founded by John Clifford Garrett has filed for Chapter 11 bankruptcy protection. How could this happen, you may be wondering?
Three months ago, the U.S. supplier announced that it has partnered with Mercedes-AMG for e-turbo passenger cars without mentioning a single thing about financial problems. “The heavy debt load and liabilities inherited in the spin-off from Honeywell” are the main reasons for the downfall, all exacerbated by the ongoing health crisis that has disrupted pretty much the entire automotive industry.
Thankfully, a private equity firm will sort things out. KPS Capital Partners intends to purchase the company for $2.1 billion, which is peanuts in comparison to the billion-dollar assets and liabilities of Garrett Motion. Throughout the bankruptcy protection process and the acquisition process, the turbo-maker expects to operate without interruption in terms of manufacturing and services.
“Our goal is to emerge from this procedure in early 2021 with a strengthened financial position, new and supportive ownership, and renewed energy and resources to continue to provide exceptional service to our customers, be a strong and reliable partner to our suppliers and other stakeholders, and act as a stable and desirable employer,” said prez and chief exec Olivier Rabiller.
Garrett is one of the nameplates we often associate with the snails that deliver more air to the combustion chambers, and even though it’s a giant in this line of business, the company founded by John Clifford Garrett has filed for Chapter 11 bankruptcy protection. How could this happen, you may be wondering?
Three months ago, the U.S. supplier announced that it has partnered with Mercedes-AMG for e-turbo passenger cars without mentioning a single thing about financial problems. “The heavy debt load and liabilities inherited in the spin-off from Honeywell” are the main reasons for the downfall, all exacerbated by the ongoing health crisis that has disrupted pretty much the entire automotive industry.
Thankfully, a private equity firm will sort things out. KPS Capital Partners intends to purchase the company for $2.1 billion, which is peanuts in comparison to the billion-dollar assets and liabilities of Garrett Motion. Throughout the bankruptcy protection process and the acquisition process, the turbo-maker expects to operate without interruption in terms of manufacturing and services.
“Our goal is to emerge from this procedure in early 2021 with a strengthened financial position, new and supportive ownership, and renewed energy and resources to continue to provide exceptional service to our customers, be a strong and reliable partner to our suppliers and other stakeholders, and act as a stable and desirable employer,” said prez and chief exec Olivier Rabiller.
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