While Spectra Premium Industries Inc. is currently undergoing overall corporate restructuring, the company issued an announcement this week that it will exit or vest the distribution of several product lines from the U.S. and Mexico markets, both serviced and sold under the Spectra Premium and private label branding.
In conjunction, the company announced that TRICO Group LLC intends to increase its distribution of certain fuel system product lines for the American and Mexican aftermarkets. These product lines include fuel pump modules, electrical fuel pumps, mechanical fuel pumps, sending units and fuel pump strainers. As a result, the two parties have entered into an agreement by which Trico would acquire related inventory from Spectra, subject to normal due diligence. The agreement is expected to close 30 days from this announcement.
Subsequent to this, Spectra Premium also announced it will commence the sell-down and exit of the following product categories in the U.S. and Mexican markets: Automotive Radiators, Condensers and Heater Cores.
The sell-down process is effective immediately, and the company says it will not replenish its inventory within its U.S. distribution model. This change also will impact the following:
• Product returns: NO new Return Good Authorizations (RGAs) will be issued after sales commencing today, yet previously issued RGAs will be processed as usual.
• Warranties and labor claims: Spectra Premium will continue to accept both until May 1, 2020, although all products purchased or sold from March 24, 2020, onward will no longer benefit from these claims.
• Fill rate penalties were already put on hold since Jan. 28, 2020 when force majeure was invoked due to the coronavirus outbreak, thus any further penalties or fines will not be applicable to these product categories after Jan. 28, 2020.
Spectra management stated it is extremely important to note these product lines will remain part of the company’s Canadian aftermarket offering. The withdrawal does not affect the Canadian market, nor does it affect heavy duty cooling products sold in the U.S. or Mexican markets.
After careful review, Spectra says it also decided to retire ignition distributors from all North American markets, including Canada, effective immediately. All product purchases or sales from March 24, 2020, will be deemed final, which impacts returns, warranties and labor claims as stated above.
