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Ford, GM May Rescue Tire Retailer First Brands

  //business-finance.news-articles.net/content/202 .. rd-gm-may-rescue-tire-retailer-first-brands.html
  Published in Business and Finance on Tuesday, January 27th 2026 at 2:52 GMT by reuters.com
      Locale: UNITED STATES

Detroit, MI - January 27, 2026 - In a surprising development shaking the automotive supply chain, Ford and General Motors are reportedly in discussions to provide rescue financing to First Brands Group, a significant player in the tire and rubber retail sector. The Financial Times broke the story Tuesday morning, sending ripples through financial circles and raising questions about the health of the broader automotive ecosystem.

First Brands, backed by private equity firm Clayton, Dubilier & Rice (CDR), owns and operates a portfolio of well-known tire retail chains, including Tire Kingdom and NTB (National Tire & Battery). The company's current predicament stems from a series of challenges, primarily related to its acquisition of Bridgestone's tire and rubber retailing business several years ago. The integration of Bridgestone's retail arm has proven more difficult and financially draining than initially anticipated, leading to mounting losses and a precarious financial position.

The FT's report indicates that First Brands is now exploring various options to address its financial woes, with a potential Chapter 11 bankruptcy filing appearing increasingly likely if a viable alternative can't be found. This looming possibility has triggered the discussions with Ford and GM, both of whom are significant consumers of tires and rely on a stable retail network for distribution and sales.

Why Ford and GM are Considering a Rescue

The potential involvement of Ford and GM is particularly noteworthy. While neither automaker has publicly commented on the situation - representatives for both companies declined to respond to requests for comment - the rationale behind their consideration is understandable. A bankruptcy filing by First Brands would undoubtedly disrupt the tire supply chain, impacting their ability to get vehicles out of factories and service existing customers. It could also create significant logistical challenges and potentially increase costs.

Beyond the immediate disruption, a failing First Brands could negatively impact the broader automotive aftermarket. Tire sales are a crucial component of automotive service and repair, a vital revenue stream for dealerships and independent garages alike. A major retailer disappearing from the landscape would destabilize this sector, which indirectly affects Ford and GM's service network.

The Context of Private Equity and Automotive Retail

This situation highlights a recurring theme in the automotive industry: the role of private equity and the complexities of acquisitions. While private equity firms often bring capital and expertise to businesses, their focus on maximizing returns within a specific timeframe can sometimes lead to aggressive cost-cutting and unsustainable business practices. The Bridgestone acquisition, while initially promising, appears to have suffered from these pressures, culminating in the current crisis.

The automotive retail landscape has been undergoing significant changes in recent years, driven by the rise of online retailers, shifting consumer preferences, and the increasing complexity of vehicle technology. Tire retailers face challenges beyond just selling tires; they now need to offer a range of services, from wheel alignment to battery replacement, and compete with online marketplaces offering competitive pricing. The traditional brick-and-mortar model is under pressure, and First Brands' struggles underscore the difficulties in adapting to this evolving environment.

What's Next?

The situation remains fluid. The discussions between Ford, GM, and First Brands are ongoing, and the outcome remains uncertain. Whether a rescue financing package can be agreed upon, or whether First Brands will ultimately be forced to file for bankruptcy, will have significant ramifications for the automotive industry. Investors are closely watching the developments, and the potential for further repercussions throughout the supply chain is very real. Clayton, Dubilier & Rice's silence on the matter further intensifies speculation and adds to the suspense surrounding this unfolding event. The next few weeks will be critical in determining the fate of First Brands and its impact on the wider automotive world.