The various crises of the recent past have claimed another prominent victim from the automotive industry: supplier of insulation parts and covers for interior and bodywork, Borgers (Bocholt, Germany; www.borgers.de) filed for insolvency for its German companies on 17 October 2022. The competent local court, Amtsgericht Bielefeld, has appointed Frank Kebekus of law firm Kebekus et Zimmermann (Düsseldorf, Germany; www.kebekus-zimmermann.de) as the provisional insolvency administrator.

This affects the following companies: Borgers SE & Co, Borgers Management, Johann Borgers, Johann Borgers Berlin, and Borgers Süd. These operate six plants in Germany: one in Berlin (290 employees), two in Bocholt (827), and one each in Ellzee (476), Holzgerlingen (49), and Krumbach (258).

No insolvency application has been filed yet for the group’s companies and plants outside Germany. These include production facilities in the Czech Republic (4), the UK, Poland, Spain, the US (2) and China (3).

The Borgers board around CEO Jürgen Otto justified the insolvency application with “increased energy prices that are difficult to calculate and high material costs”. These would have cancelled out the restructuring successes of the previous months and years and would have led to extraordinary earnings and liquidity losses in the short term. Production has so far continued without restriction. Kebekus also noted that “numerous customers want to continue the business relationship”. His goal is the total restructuring of the group.

However, Borgers has been known to suffer from declining sales for some time. From sales peaks in 2018 and 2019 of EUR 902 mn and EUR 901 mn, respectively, revenues slumped to EUR 856 mn in the two subsequent years, then to only EUR 660 mn in 2020. The automotive division generated around three-quarters of this, with machinery accounting for the remainder. Figures for 2021 were not disclosed following an enquiry by Plasteurope.com.

However, the earnings of recent years were also hit hard. EBIT was last positive in 2017, after which it declined rapidly to negative EUR 50 mn in 2020. The consolidated loss amounted to almost EUR 70 mn in the same year, although a comprehensive restructuring programme had already been initiated in 2018. Borgers also closed several plants in the process. Nevertheless, debt increased to EUR 350 mn at last count.

According to Borgers, the group’s ability to restructure was still confirmed by management consultancy Roland Berger at the end of 2021. However, the management warned already then that, “the continued existence (…) of the Borgers Group” would be “at risk” if the restructuring measures could not be implemented as planned or not with the expected liquidity and earnings effects.

In mid-2022 – possibly for restructuring purposes – the machinery and toolmaking division with the companies Olbrich and R+S Automotive was sold to Matthews International. Together, the two companies with a total of 800 employees account for around 20% of consolidated sales, i.e. around EUR 130 mn.

Borgers manufactures equipment, trim and carrier parts based on textile composites and foams for the automotive industry, as well as damping and insulation for car interiors and bodies. About 70% of the parts are installed in premium vehicles. The company mostly uses materials developed in-house, including “iboPUR”, a polyurethane foam with cover fleeces made of PET/Viscose. Another example would be the cotton/thermoset composite Duroptex for carrier parts, which draws its stiffness from jute or kenaf fibres, sometimes in combination with glass fibres.