Layoffs Halted for Hundreds of People Days Before They Were Set to Lose Job

Days before mass layoffs were expected to hit First Brands Group workers, hundreds of people were told they would actually keep their jobs. But the good news could be short-lived if the company doesn’t find a buyer amid a bankruptcy and criminal case.

First Brands Group, the auto‑parts manufacturer behind brands such as FRAM, Autolite and Trico, has been mired in legal and financial turmoil since filing for Chapter 11 bankruptcy protection in September. The restructuring has unfolded alongside federal fraud charges against former top executives and a rapid wind‑down of U.S. operations, triggering thousands of layoffs and putting dozens of factories and distribution sites at risk. The company is asking a judge for more time to find a buyer for two of its brands in an effort to save 1,600 jobs.

First Brands Group was set to lay off 819 people in Ohio on Thursday, according to WARN notices reviewed by Newsweek. But in new letters filed on Friday, the company said it will keep 669 employees on the payroll through the end of May. First Brands Group said in the letter that they’re trying to sell some of its facilities, and keeping employees on for another month gives them more time to do so.

Newsweek reached out to a lawyer for First Brands Group via email for comment.

The company filed a motion last week asking the judge for another 90 days to maintain control over its Chapter 11 restructuring process. It said that the sales of key operations, including Horizon and Toledo Molding and Die, which is based in Ohio, could preserve 1,600 jobs, according to the court filing.

The request comes amid widespread layoffs across the company's U.S. operations following its bankruptcy filing in September.

First Brands said it has already completed several asset sales during the bankruptcy, saving hundreds of jobs. In March, the company closed a $50 million sale of its Walbro business, which preserved approximately 600 jobs, according to the filing. Additional sales of intellectual property and related assets tied to its filters, plugs, wipers, and Strongarm product lines followed in April.

The company told the court that extending the exclusivity period would allow it to finalize ongoing negotiations with buyers and creditors and avoid disrupting potential transactions that could keep facilities operating. Losing control over it, the company said, could derail negotiations and reduce the chances of layoffs being halted.

First Brands Group's bankruptcy has already resulted in significant layoffs across the United States. Data from WARN notices shows job cuts tied to First Brands facilities in states including Ohio, Illinois, Tennessee, Indiana, and Michigan, affecting thousands of workers since late 2025. The company employed 6,000 people in the United States when it declared bankruptcy.

When First Brands Group filed for bankruptcy, the company told a judge that it could no longer meet its financial obligations after uncovering what new management described as severe liquidity problems across its U.S. operations. The filing covered nearly 100 affiliated entities and came as lenders cut off financing, suppliers demanded cash up front, and customers began pulling business from the automotive‑parts manufacturer, according to court records.

At the time of the filing, First Brands reported billions of dollars in liabilities and said it had only about $12 million in cash on hand, despite previously claiming billions in annual revenue. Bankruptcy documents described a sprawling global company with manufacturing and distribution sites across five continents that had become financially unstable almost overnight once access to credit dried up.

The bankruptcy soon drew the attention of federal prosecutors. In January, the U.S. Department of Justice unsealed criminal indictments against Patrick James, the company's founder and former chief executive officer, and his brother Edward James, a senior executive at the firm. Prosecutors charged the brothers with conspiracy to commit wire and bank fraud, among other offenses, in connection with the company's collapse.

According to indictments filed in the Southern District of New York, prosecutors allege the James brothers orchestrated a multibillion‑dollar fraud scheme that relied on falsified invoices, overstated assets and the repeated pledging of the same collateral to multiple lenders. The Justice Department said the scheme allowed First Brands to continue borrowing even as its true financial condition deteriorated.

Federal authorities allege the fraud stretched back several years and ultimately left lenders exposed to billions of dollars in losses when the company could no longer sustain operations. Court filings say the revelations upended the company's relationship with banks and trade partners, accelerating the need for bankruptcy protection and triggering mass layoffs across the United States.

In the bankruptcy case, current management has repeatedly cited the alleged misconduct of prior executives as a key reason the restructuring became so complicated. Judges overseeing the case have been told that unreliable books and records, along with criminal investigations, scared off potential buyers and made it difficult to secure financing to keep factories running.

As the criminal case proceeds separately in federal court, First Brands Group remains in bankruptcy, selling assets and winding down business lines while seeking court approval for deals that could preserve jobs. The company has told the bankruptcy judge that moving quickly remains critical, as continued delays could push remaining units toward liquidation rather than sale as going concerns.

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This story was originally published April 28, 2026 at 5:01 PM.