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(Fri 18 May 07) Business advisory firm BBK has performed a study on the health of companies who supply their products to car manufacturers. The news ranges from great to terrible, depending on where the supplier is based. BBK assigned the companies with a rating from A to F depending on its potential for financial distress over the next 12 months. Any company with a rating of C or lower is considered to be distressed. BBK studied the finances of 80 top suppliers around the world, based on 2006 revenues, and found that no Asian companies in the list could be considered distressed - in fact, their average rating was A. In Europe the average was B+, with 14% of those studied in distress. In North America, the average was B-, and there were certainly some healthy companies in there. But 33% rated C or lower, and there were several Fs. Why does any of this matter? Well, a distressed supplier can't serve a manufacturer properly, and that can quickly lead to what BBK's CEO William G Diehl refers to as "a significant and costly disruption to their supply chain". Diehl emphasises that manufacturers "need to have a proactive monitoring process to find those hidden weaknesses and take corrective actions before it's too late." Previous: Mazda CX-7 Orders Online Next: Ford Mondeo Allergy Award |
