• Identifying and Dealing with Troubled Suppliers
  • November 4, 2004 | Author: Thomas B. (Tom) Spillane
  • Law Firm: Foley & Lardner LLP - Detroit Office
  • A troubled supplier -- generally smaller Tier 1 or any Tier 2 -- in the automotive industry very often has relatively few customers and is at risk of losing its business if it cannot meet production schedules. A supplier's reliability is critical in a "just in time" delivery environment; the troubled supplier can have difficulty establishing credibility after a failure to deliver. Often the troubled supplier cannot pay its vendors and payroll without an acceleration of funding from its customers because its banks may have cut off additional available financing.