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 > What manufacturers will this recession bring down?

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wolfe10

Texas

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Posted: 04/04/20 09:55am Link  |  Quote  |  Print  |  Notify Moderator

BB_TX wrote:

Even though this is not a recession, the weaker companies that operate on thin margins and do not have substantial financial reserves may not be able to survive more than a few weeks of weak sales. It may not be as bad as 2008, but probably a few will turn belly up.


Agreed. Same in other industry that have had their business model substantially altered. Those over-leveraged are not positioned to survive a protracted significant reduction in sales.

Some restaurant chains certainly fall into this category as well.


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NRALIFR

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Posted: 04/04/20 10:01am Link  |  Quote  |  Print  |  Notify Moderator

wolfe10 wrote:

BB_TX wrote:

Even though this is not a recession, the weaker companies that operate on thin margins and do not have substantial financial reserves may not be able to survive more than a few weeks of weak sales. It may not be as bad as 2008, but probably a few will turn belly up.


Agreed. Same in other industry that have had their business model substantially altered. Those over-leveraged are not positioned to survive a protracted significant reduction in sales.

Some restaurant chains certainly fall into this category as well.


Like Sears, maybe? This might just finish that company off. [emoticon]

[emoticon][emoticon]


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Durb

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Posted: 04/04/20 10:14am Link  |  Quote  |  Print  |  Notify Moderator

A manufacturer can remain idle for a short period of time, just have to cover their fixed costs. I wonder who will eat the flooring costs of all the new rigs on the lots; manufacturers, dealers, or the banks. As I understood it, manufacturers shouldered the burden of maintaining inventory at the dealers in '08, which was a major cause of their demise. I hope this doesn't last long.

jdc1

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Posted: 04/04/20 10:18am Link  |  Quote  |  Print  |  Notify Moderator

Having owned my own my own business for over 30 years, I will never understand how someone can think they can run a business without a large cash reserve to cover things like this. In my estimation, larger companies (GM, Chrysler, Wells Fargo) should have removed every person in their upper management. They had no clue how to run a business. They were only in it for themselves. Okay, new small start-ups excluded, even smaller businesses should be prepared to have downturns. Maybe I was just lucky in 1990, 2001 and 2008? I weathered it without borrowing. Maybe it's because I was small enough to have a handle on useless workers? I don't know. I just think this NEW model of business isn't thinking far enough ahead. Microsoft, Apple, Facebook, Cisco and Humana will survive even if this catastrophe lasts months and months. Cash reserves are king in times like this.

rexlion

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Posted: 04/04/20 10:28am Link  |  Quote  |  Print  |  Notify Moderator

Not just manufacturers are at risk. Farmers, too. Cash croppers tend to only make money 4 years out of 7; farming is a real gamble and many of them just barely get by. If they can't plant or can't harvest on time (ripened berries wait for no one), this could be the straw that breaks the camel's back for many of them.

Since this is a worldwide problem, what will the food supply situation look like a few months or a year from now?


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Cobra21

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Posted: 04/04/20 10:28am Link  |  Quote  |  Print  |  Notify Moderator

In the 2008 recession the "Big" Business would have failed too with out the bail out. This time if they don't receive a large enough bailout they too shall be gone. I think we will see new smaller, smarter start up companies forming.

rgatijnet1

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Posted: 04/04/20 11:00am Link  |  Quote  |  Print  |  Notify Moderator

This will alter our future and some thing will never return to the way they were. People are going to find out that they can get by just fine without some things/services/etc and some businesses will find that they can do better with fewer employees. To think that things will magically get back to the way they were after this has run it's course is being too naive.

ksg5000

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Posted: 04/04/20 11:55am Link  |  Quote  |  Print  |  Notify Moderator

Depends on how much debt - leverage is a wonderful thing when things are going great but a big arse anchor when things aren't. I would guess even the ones who have the financial resources to weather the storm are going to have it tough when the pandemic clears - people are going to think hard about spending big bucks on depreciating assets.


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Posted: 04/04/20 01:19pm Link  |  Quote  |  Print  |  Notify Moderator

Seems like all the rv dealers here in Ontario were carrying a very large inventory prior to this situation. Im not sure who actually owns them, and if they are financed through the manufacturer. I could see a lot of those smaller, and possibly larger rv dealerships going down if sales drop off heavily. Having to carry many unsold rvs could get very expensive for someone.

Lwiddis

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Posted: 04/04/20 01:58pm Link  |  Quote  |  Print  |  Notify Moderator

“Like Sears, maybe?” and Macy’s, J.C. Penny


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