Valleywag has the story on Honeywell CEO Dave Cote’s email to all 122,000 employees encouraging them to support the housing bail out. Why you ask? Because Honeywell, like many other large firms, leverage the short-term commercial paper market to manage cash flow and operation expenses. This market has effectively stopped working and CEO’s like Cote (and GE’s Immelt) are hoping that they don’t have to tap credit lines to fund ops while the commercial paper market is frozen.
Tapping credit lines would make investors nervous, putting pressure on their stock prices and increasing borrowing costs (a nice, little vicious cycle).
Of course you wouldn’t want to come right out with your ulterior motive, so instead make it a play for Main Street and hope your butt gets saved by the folks that are going to get screwed the most.
From Valleywag:
Why is Dave Cote telling Honeywell’s 122,000 employees to call Congress and ask them to vote for the $700 billion Wall Street bailout? The high-tech manufacturing giant makes its money far from Wall Street, on building electronics and airplane parts. But where the credit crisis hits the heartland the hardest is a market for what’s called commercial paper — short-term loans made to large corporations to fund their daily operations. It provides the cash that smoothes over the gaps between when supplies get bought and employees get paid and when customers pony up.
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