Collins & Aikman Surprise Ford With No Supplies

This image was lost some time after publication.
This image was lost some time after publication.

The Wall Street Journal's reporting that major FoMoCo supplier Collins & Aikman decided this past weekend to cut off deliveries of certain parts and supplies to a Ford plant in Mexico. In this world of J.I.T. (Just In Time) supply, it caused a wee bit of a problem in the automaker's ability to produce cars at the facility — and by wee bit, we mean that they had to totally shutter production on Friday and Saturday. Now normally these type of F.T.D. (Flowers To Door Failure To Deliver) situations are the kind tiny suppliers will sometimes find themselves, and usually they do it only when they're close to biting the bullet, but as the Journal's Jeffrey McCracken points out:

Automotive suppliers occasionally threaten not to deliver parts, but rarely follow through. The few that do are typically very small suppliers that are close to going under.


But what do you expect, C&A's a company already in Chapter 11 posting a net loss in July of $44 million, up from $25.6 million the previous month. Normally... don't expect a company to continue to be in business much longer when you're posting those kind of numbers. But of course, the FoMoCo production line the supplier shut down was none other than the automaker's sedan savior, the Fusion — and although the line disruption only caused a 400-car reduction in production, at this junction the boys and girls in Dearborn can't afford to have many of those.


Ford Gets Cut Off by a Top Supplier As Detroit Squeezes Parts Makers (sub. req.) [WSJ]

Breaking! Collins & Aikman Submits Chapter 11 Bankruptcy Reorganization Plan [internal]

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Well, Ford doesn't play fair, I hope more suppliers start screwing them over. I'd be willing to bet a shiney new nickel on Ford being between 90 and 180 days past payment on components delivered.

This is the game that accountants like to play with cash flow:

1) Demand up front payment from dealers for delivered vehicles

2) Delay payment to suppliers for delivered components

3) Brag to wall street about your huge pool of revenue.

Ford is notoriously bad for playing this game and I'm glad it's catching up to them. Don't even get me started on the horror stories from manufacturing equipment suppliers.

Although, C&A has been managed by the B team for a long time now and I'm a bit shocked that they haven't folded.