Sector Cancer: Concordat

Hello everyone,

As in every sector in recent years, a concordat storm has begun in the elevator sector. What is this concordat? The legal definition is as follows: An agreement between creditors and a debtor whose commercial situation has been shaken, approved by the court, regarding the collection of debts according to a specific plan.

This is the legal aspect of the matter, but there is a much simpler explanation: It essentially means the postponement of debts.

Now let’s look at the factors that led to this situation. Why are companies that have dedicated years to the industry, many of which are mid-to-upper-tier firms, finding themselves in this position?

Considering the title of this article, we can think of it as a cancer. It starts from within, undermining the system, and then spreads very quickly. By the time it is detected, it is either too late, or we lose the patient, just like in the case of cancer, and we lose our companies.

As with everything else, early diagnosis is very important for these companies before they reach this point.

However, companies in our sector that have reached this level of growth must receive support to maintain their position. It is clear that the era of one-man management is over. Companies must either have professional managers within their own structure or work with a professional management team from outside. Looking at other sectors, we can cite Koç Group or Sabancı Group as examples. Thousands of other companies are supported by professional managers. In companies that have reached a certain size, in companies that are well-known, the era of the “I know everything” one-man boss is over. 

The real problem is growth. As you grow, you lose control, and you lose financial control. The result: bankruptcy. I am sure that the owners of these companies have done everything they could to avoid this situation. I believe this. In fact, for these people, losing these companies is equivalent to losing a child they have raised. This situation is that devastating. It can cause an unimaginable trauma for the company owner.

Let’s revisit the process of how business operates. When these companies, which believed they were gaining an advantage, find themselves unable to exit bankruptcy and face insolvency, they attempt to reach a settlement by offering suppliers and employees half or a third of what they are owed. When they reach a point where they cannot pay these debts — in other words, when it’s too late —another star, another value, will be lost from the industry. All the remaining creditors, even if they do not voice their claims, will not forgive these debts in their hearts. But the real issue is where are the assets these business owners accumulated over the years in this sector? Why are the assets and investment tools obtained from the revenues of this sector not liquidated to resolve the company’s financial difficulties when it faces hardship? In some cases, this even leads to asset stripping. 

In the companies that declared bankruptcy and couldn’t get out of it, who will take responsibility for the rights of the workers who gave years of their lives to that company?

The bottom line is this: Growing is good, but as you grow, you need to take certain precautions and get support.

Best regards.