Real-World Manufacturing Lessons From a Failing Business
•February 20, 2026
0
Why It Matters
Understanding these real‑world failures helps current and aspiring manufacturers avoid costly missteps that can sink a business. The story is timely as many small manufacturers face similar pressures from consolidation in the automotive supply chain and generational leadership transitions.
Real-World Manufacturing Lessons From a Failing Business
[
](https://substackcdn.com/image/fetch/$s_!Ffxs!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F33adcde9-0e63-48f4-ab48-ac77e9df357e_784x1168.jpeg)
Image by Grok
I’ve been doing some consulting to find small manufacturers that might be a good bet for my small investment firm client. One business currently for sale that I looked at turned out to be an object lesson in some typical ownership land mines.
It was a small machine shop outfit with a couple of locations. It had negative earnings last year and had been declining for several years.
I dug into what was going on, and learned this:
-
The founder/owner had run the business until about five years ago, then turned it over to his two kids
-
Neither of the kids could actually run the business, so the dad had been backing them up
-
The business had been surviving on contracts with one of the big automakers all its life
-
Its “diversification” strategy was to make subcomponents for suppliers of that same automaker
-
The longstanding contracts with the big company had dried up, and the whole business was running at 10% of capacity
-
Nobody but the owner had any sales expertise, and his was limited
-
There was no actual recovery activity happening—just a plan on paper
This is an actual true story. I stress that because it’s so full of the common pitfalls for SME manufacturing owners it woud be comical, were it not so real-life tragic.
0
Comments
Want to join the conversation?
Loading comments...