https://www.youtube.com/watch?v=mT43r41dMB0
Fast-tracking an auto parts manufacturer relocation
with supply chain financing
CLIENT OVERVIEW
In response to shifting global trade dynamics and rising uncertainty around international tariffs and cross-border logistics, a Canada-based assembler of emission control products initiated a full-scale relocation of its core operations from Ontario to Sterling Heights, Michigan. The move was driven by the need to secure long-term competitiveness and maintain uninterrupted service to major US automakers.
The company plays a critical role in the North American automotive supply chain with a product portfolio that includes catalytic converters and advanced emission filtration systems. Following two months of in-depth legal, tax, and supply chain planning, the leadership team made the strategic decision to relocate. It turned to eCapital for fast, flexible financial support to make it happen.
THE CHALLENGE
The company faced a tight 12-month window to complete its relocation and resume full operations to avoid breaching contractual obligations with major automotive OEMs. While facility leasing opportunities and the availability of a skilled labor market in Sterling Heights aligned well with production needs, securing a dependable US-based supplier network presented a major challenge. Key constraints included the short relocation timeline, which allowed no margin for production delays; the need for reliable US suppliers of specialty metals and engineered ceramics; cash flow strain during the transition due to upfront relocation and sourcing costs; and urgent capital requirements to establish just-in-time (JIT) delivery partnerships and secure volume pricing.
The company required a strategic financing solution to maintain production continuity.
THE SOLUTION
Understanding the urgency and complexity of the relocation, eCapital assembled a cross-functional team to evaluate the company’s financial standing and map a funding strategy aligned with its timeline and operational objectives.
Key Steps Taken:
- Public-Private Funding Partnership: eCapital helped the company secure economic development assistance through the Michigan Economic Development Corporation (MEDC) to offset relocation costs.
- Financial Health Review: A detailed analysis confirmed that cash flow was the most immediate constraint, especially for supplier prepayments and contract negotiations.
- Tailored Financing Solution: Within five weeks, eCapital executed a supply chain financing agreement, unlocking working capital to support sourcing US-based materials and components.
- Vendor Enablement: The financing solution provided predictable liquidity, enabling the company to offer favorable terms to suppliers and ensure timely, high-quality deliveries.
EXPECTED RESULTS
This strategic funding package would provide the financial resources to empower the company to stay on track with its relocation plan and hit key milestones, including:
- Secure and onboard multiple US suppliers for critical specialty inputs.
- Sign long-term contracts to guarantee material availability and stabilize costs.
- Avoid disruptions to key automotive OEM contracts.
- Maintain JIT delivery schedules during the transition.
- Be positioned to begin shipping products from Sterling Heights by March 2026.
With a payroll funding facility in place to ensure operations could be fully rooted in Michigan by its target date, the assembler can explore expanded capacity and new OEM partnerships within the US market. In this scenario, eCapital would remain a trusted partner as the company looks to further invest in innovation, supplier relationships, and supply chain performance.
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