Supplier financing dichotomy baffles

For about half a decade early in my reporting career, I covered financial markets. I used to think I understood something of how bond, stock, foreign-exchange and money-markets worked.

But I'm at a loss to explain the dichotomy in the financing options most auto-parts makers face.

The stock market loves parts suppliers. Those companies' stock prices have been on a roll for a year. New or additional stock offerings get gobbled up by eager investors.

But banks, broadly speaking, won't lend to suppliers. Banks still treat suppliers as toxic, an attitude that's just beginning to ease.

Why the split?



ATTENTION COMMENTERS: Over the last few months, Automotive News has monitored a significant increase in the number of personal attacks and abusive comments on our site. We encourage our readers to voice their opinions and argue their points. We expect disagreement. We do not expect our readers to turn on each other. We will be aggressively deleting all comments that personally attack another poster, or an article author, even if the comment is otherwise a well-argued observation. If we see repeated behavior, we will ban the commenter. Please help us maintain a civil level of discourse.