Remember Outboard Marine Corporation (OMC)?
At its peak, OMC was a multibillion-dollar Fortune 500 company behind Outboard giants Evinrude and Johnson, along with major boat brands like Chris-Craft, Four Winns, Lowe, Princecraft and Stratos.
In 2000, OMC sold roughly 100,000 outboard motors and controlled about 1/3 of the outboard motor market.
Big. Established. Iconic brands. Massive market share. And on December 22, 2000, OMC filed for bankruptcy. About 7,000 employees were laid off.
Imagine being a supplier in 2000 and hearing:
“OMC? We’re not worried about them. Look how big they are.”
Sound familiar? Enron. Lehman Brothers. Sears. Toys “R” Us. First Brands. And OMC.
“They’re too big to fail” has crushed many a DSO, supplier balance sheet, and Bank Covenant.
The lesson isn't that every large customer is a bad risk. The lesson is that size is not a credit strategy.
Great companies intentionally decide which risks they're willing to retain — and which ones could hurt badly enough that they should be transferred.
Because the best time to have that conversation is before the big company that “can't fail”…
fails. Again.
Too big to fail isn't a credit strategy. “They're too big to fail” isn't a credit decision. It's an assumption.
Make the decision to retain or transfer the risk intentionally—before the market makes it for you.
Your Customer Doesn’t Have to Look Risky to Become a Bad Debt
Trade Credit Insurance helps companies protect against unexpected customer nonpayment while intentionally deciding which A/R risks to retain and which to transfer.