If you work at a Chicagoland shop and need to drive downtown, bring a few extra quarters for parking.
According to a recent BusinessWeek article, the Windy City’s government received $1.15 billion from a deal with Morgan Stanley, Abu Dhabi Investment Authority, and Allianz Capital Partners. In return, these investors now have the right to run the city’s 36,000 parking meters for the next 75 years, and they formed an entity called Chicago Parking Meters to run the operation. And thanks to some aggressive parking fee hikes, the group apparently will make more than $9 billion profit before earnings, taxes, and depreciation. Now that’s a chunk of quarters.
According to critics, the city essentially gave away future revenue to pay its bills today. The story says a lot about the importance of cash. The Chicago government needed it, the investors could get it for them, and officials apparently were willing to give up billions in future profits to get that cash immediately.
In the metal fabrication arena, one thing tends to help free up cash more than anything else: inventory reduction. And a recent survey from the Fabricators & Manufacturers Association supports that claim.