When Large Companies Close, Small Businesses Suffer

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"Essentially what happens is they walk away without paying the suppliers, or if they pay it'll wind up being pennies or a few cents on the dollar."

Mark Pape's company, American Machine and Welding, was not affected by Dana Corporation filing for bankruptcy. But the owner says he has experienced the problem with other companies.

"As a small business man and a supplier of local industry, I know what it means to be affected by the bankruptcy of large companies."

Pape's company deals mainly with local manufacturers within a 30 mile radius of their Bowling Green location. With all the recent closings and bankruptcy filings he's no stranger to the problems that accompany them.

"Just in the last five to six years I can think of two or three that I've been a victims of, or managed a company that's been a victim of this."

There are only 15 employees at American Machine and Welding, but Pape says many people forget about the plight of the small business amidst the news of a large plant closing.

"You hear about those. And you hear about the loss of those jobs. But you don't hear about the small machine shop or the small vending company or the other small business that caters to these large facilities."

When a large company closes unexpectedly or files bankruptcy and is unable to pay their small suppliers it trickles down. Pape says if they lose a third of their business, they lose a third of their profit, and a third of their employees.

"It kills a small businessman, unless he's been in business a long time."

According to Pape, some suppliers continue working for a company that has gone bankrupt. They do not get paid as well, and sometimes they don't get paid at all. He says it's just another downfall small business owners face when larger companies go broke.