Honeywell pressures suppliers to cut prices 30%

Honeywell (NYSE:HON) is asking some of its suppliers for 30% price cuts, extended payment terms and other concessions, Barron’s reports, citing a letter that says the request mirrors demands it is getting from its customers due to the economic impact of the coronavirus.

“Customers have come to us for support to balance the impacts across their supply chain,” according to the letter, which was signed by Honeywell’s chief procurement officer. “In turn, we are asking our supply chain partners for similar support.”

Honeywell reportedly is seeking 30% across-the-board price cuts, 60 additional days to pay its suppliers, 2% rebates on future order volume growth, holding of Honeywell inventory by its suppliers and immediate resolution of outstanding claims against the company.

The concessions Honeywell and others are seeking from suppliers are another kind of financing that the S&P Global rating firm has called a “sleeping risk” on the books of U.S. businesses.

https://seekingalpha.com/news/3558445-honeywell-pressures-suppliers-to-cut-prices-30-barrons