Moody's cuts Collins & Aikman's debt ratings

NEW YORK (Aug. 25)—Moody's Investors Services gave a "negative" outlook on Collins & Aikman Corp., downgrading all of the company's debt ratings. Moody's said the rating downgrades reflect Collins & Aikman's continued problems in converting higher revenue into stronger levels of profitability and cash flow generation. The ratings agency pointed to several contributing factors, including higher-than-expected launch costs, labor inefficiencies, launch delays, plant downtime and material cost reductions being used to offset price concessions to the company's auto maker customers. It remains to be seen, Moody's said, whether the company's new CEO David Stockman and his five-member presidents' council will prove more effective. Moody's also voiced concern over the as-yet-to-be-disclosed results of the independent audit committee investigating the company's business dealings with two of its directors.