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For the past week, rumors have swirled about the future of CIT. Would the government rescue the bank from insolvency? (Apparently, not.) Would the bank be forced to file for bankruptcy? Or, would bond holders provide capital to keep CIT afloat?
Why – you might ask – does any of this matter to a career executive? How does it affect your managerial future?
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CIT [CIT
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]– compared to the big buys like Goldman Sachs[GS
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] or Citigroup [C
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]– is a quiet but powerful engine to thousands of small and mid-sized companies. And while companies like Walmart [WMT
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] and IBM [IBM
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] get all the headlines on sites like CNBC, it’s actually middle market companies that drive much of the economy. Oh, and provide many of the jobs and careers for millions of Americans.
Full disclosure: CIT is the credit provider for my company, though our borrowing has been minimal. But in a different economy, CIT would have assisted us with our working capital needs and it would have provided capital for add-on acquisitions.
As it has for thousands of other companies, CIT has supported expansion plans and growth strategies by putting their money where their mouth is. And while my company is not overly dependent on that support, hundreds of mid-sized retailers and manufacturers absolutely rely on CIT for the working capital that buoys their week-to-week efforts ($21B loaned in 2008 alone.)
The bottom line: CIT is a great partner and very important to middle market companies.
Does it have the glamour name or deep Washington connections of Goldman Sachs? No. Is it worth saving? That’s for its bondholders and Uncle Sam to figure out.
But will thousands of executives and managers be badly hurting if CIT goes under?
You can bet on it.
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Erik Sorenson is CEO of Vault, the Web’s most comprehensive resource for career management and job search intelligence. Vault provides top talent with the insider information they need to make critical career decisions. An Emmy award-winning media industry veteran, Erik served as president of the MSNBC cable news channel through 2004. His experience spans radio, local and network broadcast television, cable and syndicated TV, and the Web.
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