Nortel Networks could have avoided a calamitous inventory buildup, mountains of bad debt and a $19 billion quarterly loss if its executives had talked to their customers' treasurers instead of their salespeople, CEO John
Roth said recently. The treasurers, he noted, knew "that they were having difficulty in raising the money" to pay their suppliers.
Much of corporate America revved up supply as late as last year's fourth quarter, egged on by customer demand and Wall Street enthusiasm. Corporate treasurers were surely surprised by the suddenness with which orders hit a wall as the year turned, but anecdotal evidence suggests that you and your finance departments received the first troublesome signs.
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Should treasurers have communicated their concerns more loudly to others in their companies? Are you speaking vigorously enough today about new concerns, such as the effects of bank consolidation on your operations?
Our cover story chronicles numerous examples of ways that treasurers–like it or not–are being pressed by their bosses to break out of their finance silos, spread the gospel of balance-sheet management to line managers and speak out to superiors about financial forecasting changes. "What CFOs Want from Treasurers" starts on page 18.
Great Lakes Chemical's risk managers reached out to line people for detailed sales data by region and season to determine if the company should hedge against temperatures that freeze sales of swimming pool chemicals.
Discover their surprising conclusion in News & Views, page 7.
Goldman Sachs hasn't received support for its proposal that bank loans be marked to market, managing editor Jay Sherman reveals in another News piece. But privately, many treasurers tell us they are fed up with the increasingly vicious game of hardball that commercial banks are playing. With a sympathetic administration in Washington, this is the time for you to voice concerns about the subtle threats or outright rejections you are hearing from bankers.
Some articles we've seen suggest you have new clout in withholding business from banks, but the reverse is much more common. Long-time lenders are even refusing to renew backup CP lines for customers who can't feed them with fees. And with so many mergers, there are a lot fewer banks to talk to.
If you've got a banking story, speak out. Send your tale to us at the e-mail or snail mail addresses to the right. We'll keep your name confidential, but we'll help you take a stand.
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