Tel: +86-769-81708449
Home > Knowledge > Content
Categories

Jolly Sunshine Limited

Address:Pennisula Commercial Center, Shilong Town,Dongguan City,Guangdong Province,China

Contact:Irene

TEL:(+86)769-81708449

phone:(+86)13418290586

E-mail:sales02@jollysunshine.com

Web:www.jollysunshine.com


Is Tesla taking suppliers for a ride?

Jolly Sunshine Limited | Updated: Aug 30, 2018

Things aren’t looking so good for Tesla: Investors are worried about Elon Musk’s tweets as well as the company’s financial situation. The two big P words of successful automotive manufacturing—profitability and production—have seemed to elude Tesla as it continues to seek both. All of this is keeping Tesla’s suppliers awake at night. Game supply and game card sleeve and trading card sleeve and soft card holder.

An article on the front page of the Aug. 21 Wall Street Journal, “Some Suppliers Worry About Tesla,” referenced a survey by the Original Equipment Suppliers Association (OESA; Southfield, MI) sent to 35 top executives, in which 18 of 22 respondents said they believe that "Tesla is now a financial risk to their companies." The document was reviewed by the Wall Street JournalGame supply and game card sleeve and trading card sleeve and soft card holder.

blogged recently about how Tesla might be taking lessons from Detroit’s automotive industry by asking for rebates on already-paid invoices and trying to stretch out payments. This most recent article on Tesla’s problems noted that “its on-time payments to production-related suppliers” has improved to “about 95% from 90% last year,” but non-production suppliers are only receiving on-time payments about 80% of the time. 

“Regarding Tesla, any time there is uncertainty in the marketplace, it causes concerns for suppliers,” OESA CEO Julie Fream told the Wall Street JournalGame supply and game card sleeve and trading card sleeve and soft card holder.

None of this should surprise suppliers who’ve dealt with the automotive industry over the long term. Stretching payment terms on tooling from 60 to 90 days is something the Detroit guys have done for the past two decades! If the tooling guy who commented on this is lucky, he’ll get paid in six months. Asking a parts supplier for a “10% across-the-board price cut going forward” is common in Detroit. If the suppliers don’t comply, Tesla will hold their feet to the fire and “stretch the current 60-day payment terms to 120 days,” one person commented to the WSJ. Most of the automotive suppliers have been down that road before. Game supply and game card sleeve and trading card sleeve and soft card holder.

Tesla’s CFO, Deepak Ahuja, commented in the WSJ article that “it is normal for auto makers to ask for better terms as the business improves.” Yeah, sure. A molded parts supplier can make even more parts for less money and not get paid for four months. It’s the old “lower the price and make it up in volume” scheme. Game supply and game card sleeve and trading card sleeve and soft card holder.

The WSJ noted that public records show 16 companies since October “have taken the unusual step of filing mechanic’s liens” against Tesla. I have news for the WSJ: it’s not so unusual.I remember when a group of Michigan moldmakers, with the help of the American Mold Builders Association, got a strict mechanic’s lien bill passed in the state legislature that addressed moldmakers specifically, allowing them to hold the mold until payment is received. Those were desperate times for mold shop owners, some of whom were on the verge of bankruptcy. Game supply and game card sleeve and trading card sleeve and soft card holder.

At this point, Tesla is small potatoes compared to the Detroit 3 and European auto makers in the United States and Mexico that most of these suppliers serve. Some suppliers can choose to cut their losses and run, deciding to stick with the devils they know rather than the one they don’t know. And one whose future doesn’t look all that great! Game supply and game card sleeve and trading card sleeve and soft card holder.

Tesla, after all, hasn’t been in the car-building business all that long, and when even the mainstream auto makers that have been in business for over a hundred years struggle with profits and production, you can bet that this is just the beginning of Tesla’s problems. Game supply and game card sleeve and trading card sleeve and soft card holder.