Bosal CEO Karel Bos has strongly criticised US bankruptcy procedures that allow bankrupt companies to restructure and continue their US operations under Chapter 11 before emerging as new debt-free entities. Speaking exclusively to just-auto he said that he felt Chapter 11 arrangements ‘falsified competition’ and were ‘grossly unfair’.

Privately held Bosal is best known for making exhaust systems and collaborates with Delphi (whose US operations are still in Chapter 11) in a non-equity based alliance to provide exhaust systems to the global original equipment (OE) market.

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Bos maintained that firms entering Chapter 11 have often not been run responsibly and that the process means that shareholders and creditors lose money so that a new company emerges with an artifically low asset base and the ability to offer products at lower price than companies that have been run responsibly.

“I feel that it is grossly unreasonable and unfair,” Bos maintained.

But Bos also blamed the attitudes of some OEMs for forcing suppliers over the edge.

Successful car companies focus on the cars and “not on squeezing the last drop of blood out of their suppliers,” he said.

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“It must cost the car companies an absolute fortune managing those suppliers that have gone into Chapter 11 in the US to ensure continuity of supply. There are whole departments dedicated to that.

“If you add that cost to the general cost of buying components, maybe these guys should close those departments and allow suppliers a more reasonable price,” Bos added.

The full transcript of the interview with Karel Bos is available to just-auto members.

THE EDITOR’S Q&A: Karel Bos, CEO of Bosal