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Finally some good news – aside from the excellent article in yesterdays Financial Times extolling the virtues of Interim Managers! – is another article in the Financial Times today announcing a centre piece of the coming Budget, to set up a state guarantee scheme to underpin supply-chain insurance. This will make a difference – and is possibly the catalyst that we have been waiting for to boost the fortunes of the battered manufacturing and engineering sector.
Back in January, banks pulling credit facilities was the main cause of business failures, by early March this had changed. Businesses struggling to get credit insurance were failing, despite having money in the bank and no debt – simply because suppliers were then forced to demand payment up front and the ensuing cash flow shortage was enough for nervous Banks to call in the Administrators.
Of course, this Government is renowned for announcing schemes which then seemingly fail to materialise – I’ve yet to hear of the loan guarantee scheme to help a business and I’m not sure what happened to lenders giving homeowners a longer grace period!
That said, in discussions with interim managers the view has been that the recovery cannot begin until businesses can trade, free of the shackles imposed the financial system – my view was that as soon as Brown et al woke up to the fact that bailing out the banking sector was not enough if people were still losing their jobs (and to keep theirs), and began to ensure that companies, albeit struggling with the massive overnight downturn experienced, were able to trade through the recession, then recovery could begin.
Lets hope this is the beginning – there is still a lot of gloomy news, and certainly this good piece of news has come too late to save many, but it may be the signal we have been waiting for to enable companies to start projects put on hold as credit eases, and for the banks to invest in their clients by bringing in the specialists interim skills desperately needed to make efficiencies and savings for struggling businesses to survive today, whilst ensuring that their infrastructure is in place for the eventual upturn – I wish I could say tomorrow.
April 17th, 2009 at 9:50 pm
Working in a market that is being crippled by the fact that credit insurers now don’t want to insure against risk we investigated this. As with many promises it proved to be unfounded. We finally got ourselves through to the department responsible who then told us that they had no idea what they were meant to do or how they would do it.