Revocation of TS 16949 registration

L

LenMac

#1
We are contemplating the purchase of a metal stamping company, which has four major and eight minor TS violations. Their auditor gave them a certain time to take appropriate action, and rejected all their efforts for some reason which we are not privy to. The auditor has told this company their TS registration will be pulled in mid May.
The question is two fold:
We are TS registered with no issues. If we purchase the company, move operations over several months to our location, can our newly purchased company operate under our "umbrella", and get more time to solve the violations?
Also, is it possible for the seller to advise the auditor the company is being sold, and get an extension of time to allow further corrective actions?
I am not a QC expert by any means, and hope I've given enough info for a discussion. :thanx:
 
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John Broomfield

Staff member
Super Moderator
#2
Re: Revocation of TS registration

We are contemplating the purchase of a metal stamping company, which has four major and eight minor TS violations. Their auditor gave them a certain time to take appropriate action, and rejected all their efforts for some reason which we are not privy to. The auditor has told this company their TS registration will be pulled in mid May.
The question is two fold:
We are TS registered with no issues. If we purchase the company, move operations over several months to our location, can our newly purchased company operate under our "umbrella", and get more time to solve the violations?
Also, is it possible for the seller to advise the auditor the company is being sold, and get an extension of time to allow further corrective actions?
I am not a QC expert by any means, and hope I've given enough info for a discussion. :thanx:
LenMac,

You could arrange for a preacquisition audit to inform the investor by fulfilling an objective along the lines of:

"Determine and report on the magnitude and difficulty of bringing the metal stamping company into conformity with TS 16949."

Be very clear on the scope of stamping that needs to conform to the automotive standard.

Chances are the investor is looking to use the report as a bargaining tool while knowing what can be done quickly to restart or protect the revenue stream.

Select a rigorous independent auditor with sound business sense.

John
 

Randy

Super Moderator
#4
You'll be doing an Extension of Scope audit so your new acquisition will need to meet your qualty system requirements not the old owners (which ceases to exist as do those previous nonconformities, when the business relationship is terminated)

You'll be a pretty good position because you will already have in hand known problems that you will have the time and opportunity to resolve.

I've done similar audits myself and the previous history is basically out of scope because the audit addresses the present quality management processes and the effectiveness not the past under a completely different system.

Also beware of an auditor who starts out or begins to look for what he or she "likes or wants".... That's a "Bozo No-No". If they start liking or wanting beyond what is actually required you should want them to pack up and leave because they are trying to create their own abortion of a quality system devoid of fixed and defined boundaries and requirements

:2cents:
 
L

LenMac

#5
The current owners concern is the certificate will be rescinded by the auditor prior to our closing for the purchase of the company. If that occurs, there could be a short period of 4-6 weeks where the seller may not have a valid TS certificate. They are being asked for their renewed cert already by one or more of their customers.
The ideal situation would be for the Registrar to extend the solution of the corrective actions for 60-90 days. Not sure if/how that could happen.
 

John Broomfield

Staff member
Super Moderator
#6
The current owners concern is the certificate will be rescinded by the auditor prior to our closing for the purchase of the company. If that occurs, there could be a short period of 4-6 weeks where the seller may not have a valid TS certificate. They are being asked for their renewed cert already by one or more of their customers.
The ideal situation would be for the Registrar to extend the solution of the corrective actions for 60-90 days. Not sure if/how that could happen.
LenMac,

You still need a plan to merge the systems (and certifications) in a way that assures customers of continuing product quality (see 5.4.2b).

And it's better to base that plan on your first-hand gathering of the facts regarding the health of the acquired system.

Take that plan to the Registrar to obtain a legitimate delay as you also transfer the certification of your updated system to your Registrar. Your Registrar should assist in this a smooth transfer so it will inconvenience neither set of customers.

John
 

Randy

Super Moderator
#7
LenMac,

You still need a plan to merge the systems (and certifications) in a way that assures customers of continuing product quality (see 5.4.2b).

And it's better to base that plan on your first-hand gathering of the facts regarding the health of the acquired system.

Take that plan to the Registrar to obtain a legitimate delay as you also transfer the certification of your updated system to your Registrar. Your Registrar should assist in this a smooth transfer so it will inconvenience neither set of customers.

John
Baloney! That old QMS and everything related to it is past history as there is no transfer of certification taking place. This is nothing more than an acquisition of production and product line that will be covered under the existing certification of the new ownership creating an Extension of scope situation just as if a new assembly line had been built or new product brought out.

All the CB needs to know is that you've acquired production and product that you want to place under YOUR CERTIFICATE.
 

John Broomfield

Staff member
Super Moderator
#8
LenMac,

I should not have said transfer.

As Randy says it's really an expansion of scope as you merge the acquired system with your's.

Sorry about that!

John
 
L

LenMac

#9
Randy, John,
thank you both for your informative answers. They have helped me immensely. One question remains for me right now:
If we have a signed purchase agreement for the purchase of the company, but the deal is not closed, AND the deadline for corrective action on the violations has passed with the sellers company; what are the implications of this situation for the seller? He already has been asked by a few customers for his renewal of the registration. Could we show the p.a. to the auditor and ask for extensions for corrective action?
(BTW: we share the same registrar)
 

John Broomfield

Staff member
Super Moderator
#10
Randy, John,
thank you both for your informative answers. They have helped me immensely. One question remains for me right now:
If we have a signed purchase agreement for the purchase of the company, but the deal is not closed, AND the deadline for corrective action on the violations has passed with the sellers company; what are the implications of this situation for the seller? He already has been asked by a few customers for his renewal of the registration. Could we show the p.a. to the auditor and ask for extensions for corrective action?
(BTW: we share the same registrar)
LenMac,

Instead of asking your registrar for a favor, proactively provide your registrar with a copy of your plan (approved by top management) to expand the scope of your management system in full conformity with the relevant standards.

Top management will then see the need to expedite the closing of their purchase.

At this time of informing them of your approved plan, ask you registrar how they can help provide continuity of certification.

Do not belabor the poor performance of yesterday's company and their inept management system, it's history.

Your customers and the continued integrity of your management system is what counts now.

John
 
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