BP Destroys an Industry In a Single Bound (or Boom)
Boom-makers and their vendors -- the companies that supply the No. 1 weapon used to contain crude -- was one of the few industries that appeared poised to actually benefit from the Gulf oil spill. At first, they were BP's saving grace, laying more than four million feet of containment boom at the height of the effort. Now some of these boom-makers face bankruptcy -- thanks to BP.
The boom-makers aren't completely innocent here. According to the WSJ, which broke the story, there were some companies that ordered boom and increased production before they had contracts in place. Prices also went up, although the companies that were interviewed said it was just to cover overtime and tooling costs.
However, 11 of the major manufacturers and suppliers interviewed by WSJ, had contracts with BP or were delivering to those who did. Now 10 of those companies say they're out of money. To put this in is perspective, consider this: There are about a dozen manufacturers that make all the boom used by oil companies, emergency-response firms and marinas in the U.S.
There is a dim hope that these boom makers -- if they can hold out long enough -- will eventually see an uptick in business once the federal government strengthens its oil and gas spill response plans. It's little consolation to the companies left with a lot of product and debt.
The bigger issue -- aside, from of course the destruction of small businesses -- is BP's activities since last month, when it first succeeded in stopping the flow of oil from the Macondo well. BP was practically falling over itself to prove that it was doing all it could to contain and clean up the oil. Lately, BP has been more distant and has dialed back its presence in the Gulf Coast, leaving folks reasonably worried that the company will renege on its commitment to restore the region.
Photo from BP
For complete coverage, see All Things BNET on BP's Gulf of Mexico Spill
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