Signs indicate manufacturing on rebound - Dr. Thomas Traynor quoted

10 November 2010. Business Review – Online. By: Joe Cogliano

Manufacturing still represents 100,000 employees in the 12-county region surrounding Dayton and contributes $4.7 billion in annual payroll, according to a recent report. This includes companies with local operations such as Honda of America (NYSE: HMC), AK Steel (NYSE: AKS), Navistar International Corp. (NYSE: NAV), Avery Dennison Corp. (NYSE: AVY), Caterpillar Inc. (NYSE: CAT), Eastman Kodak Co. (NYSE: EK), Trimble Navigation Ltd. (Nasdaq: TRMB) and GE Aviation, a division of General Electric Co. (NYSE: GE). During the recession, many companies stretched their payables, which in turn translated into older receivables for vendors, said Jim Kaiser, a director at accounting and business advisory firm Brady Ware and a board member of the Dayton Tooling and Manufacturing Association. The combination of money flowing and moderate sales increases is finally sparking investment — although limited — in equipment such as presses, he said. Some of the cash flow might also be a result of General Motors' larger suppliers, known as Tier I companies, finally getting caught up on payments to their smaller suppliers, said Jim Grosmann, a spokesperson for the National Tooling & Machining Association. NTMA has been meeting with GM for more than a year in an effort to pressure Tier I companies — accused of hoarding money and only paying critical suppliers — to pay up. Grosmann said some money started flowing this year. Tom Traynor, an economics professor at Wright State University, said the trend for customers catching up on past due bills is simply because they're in better financial shape. “It is another sign that the economy is improving, albeit gradually,” Traynor said.


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