More from the continuing saga of the auto industry coming out of the recession. In particular, it appears that auto suppliers (especially smaller ones) are having a hard time lining up financing to expand as the industry recovers (Parts makers face plenty of peril in industry’s recovery, Automotive News, Sep 28). Here is the issue in a nutshell:
“More companies fail in an expansion, especially an expansion after a downturn,” [David Tull, CEO of Crestmark Bank] said. “In a downturn, they’re collecting on receivables, but they’re not buying new inventory. So their need for cash goes down. Now? Their cash needs are up.” (more…)
The Operations Room 