The aggressive acquisition binge by automotive supplier Cambridge Industries Inc. has struck a nerve with credit ratings service Standard & Poor's Corp.
The same issues also have led Cambridge, the industry's largest thermoset auto-parts supplier, to restructure its internal operations to better compete.
New York-based S&P on Feb. 11 downgraded Cambridge's credit outlook from stable to negative. S&P was concerned about Cambridge's debt load, said fixed-income analyst Lisa Jenkins.
However, S&P did not downgrade the credit rating for the Madison Heights, Mich.-based supplier. Cambridge maintained its single B-plus credit rating and single B-minus subordinated debt rating.
The down shift by S&P was not unexpected at Cambridge, said company President Kevin Alder. The company has grown by about $100 million in sales each year since about 1994.
Since late last year, the supplier has added program managers, product engineers and research and development personnel, Alder said.
``We'll start to see much higher revenues and earnings from new projects in the next few years,'' Alder said. ``We've had to put program managers and engineers in place now for that. It doesn't come cheap, but it's the right thing to do.''