Banking Crisis Guts Successful Supplier

Martin Schwoerer
by Martin Schwoerer

Does anybody need a reminder that the credit crisis is hurting our economies? Case in point: German car-industry supplier Schenk Plastic Solutions. Schenk is a small but basically healthy company that relies on Daimler for 60 percent of sales. They have a patented new product named SkinForm which was developed for premium car interiors. It's been reported that SkinForm is unique and has no real competition, since it offers superior quality at a super-low price. Mercedes wants Schenk to supply SkinForm for one million cars per year. In 2005, Schenk sold a majority interest to a private equity company named Argantis to finance their expansion plans. Surprise! Argantis is connected to IKB, a German bank which is basically bankrupt after investments in subprime U.S. real estate. So IKB pulls the plus on Argantis, which subsequently pulls the plug on Schenk. A great company with good products and healthy customers is forced to declare its insolvency. As these things go these days, the Indians come to the "rescue." Automobilwoche reports that the Ashok Minda Group, based in Uttar Pradesh, will be buying Schenk. Globalism wins, Daimler is happy and the West's industrial base is eroded a little bit more.

Martin Schwoerer
Martin Schwoerer

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  • Blowfish Blowfish on Jun 25, 2008

    Apparently the US ship building industry is having a labor shortage Is nice to see something else is going at full tilt. Probably this will get Gettelfinger to sign up more memberships.

  • Nonce Nonce on Jun 25, 2008
    I don’t think the problem is lack of, or losing capacity. I think it’s the lack of, or losing work. Make jobs, not wealth!! The United States has "lost" most of its agricultural jobs, too. The horrors! The farmers rioting in the streets!
  • Toxicroach Toxicroach on Jun 26, 2008

    Unemployment is at 5.5% during a slowdown/recession/depression. That ain't bad. Industrial capacity is the highest its ever been. So I'm really not buying that NAFTA is really bad for America. Bad for guys who were getting 130000 in compensation a year for a 60000 a year job... not so bad for the average joe who was footing that bill.

  • Pfingst Pfingst on Jun 26, 2008
    Privatize the profits, socialize the losses. It’s Dubya’s compassionate conservatism at its finest. I know it's fashionable to blame everything on Bush these days, but this sort of thing has been going on a long time, far longer than W has been in office. And you might be surprised to discover that many businessmen who do this sort of thing are Democrats - predatory business practices do not have a strict party affiliation.