Maybe there was a method to David Stockman's madness when he ran supplier Collins & Aikman into Chapter 11 bankruptcy reorganization last year.
He underbid so many contracts that he made the company too big to fail: Collins & Aikman provides components for 90 percent of North American vehicle platforms. Now the Detroit 3 must prop up this troubled supplier with loans and price supports worth hundreds of millions of dollars -- plus other goodies, such as five-day payment terms.
Collins & Aikman isn't just a tail wagging the dog. It's flailing this puppy all over the room. Now, as the company attempts to emerge from Chapter 11, it is asking for guaranteed new business -- and guaranteed profits, too.
The lesson for automakers: Be careful when you ask for big cost cuts from your troubled supply base. You might have to pay much more later.