EXCERPTS:
"Containment-boom makers and their vendors that ramped up supply for BP PLC after the Gulf of Mexico oil spill say the company suddenly stopped accepting deliveries weeks ago, leaving them with millions of dollars in unused product.
Several makers of the vinyl protective sheaths known as boom and their suppliers say they are deeply in debt and have been forced to lay off workers and delay payment to vendors.
During the height of the oil spill this summer, more than four million feet of containment boom was laid on the water's surface to shield the Gulf Coast. But BP began putting boom orders on hold or rejecting them about the second week in July, as efforts to stop the flow of oil gained ground. On Tuesday, BP said concerns about storms in the Gulf would delay by several days work on a relief well expected to help permanently seal the well.
To be sure, some of the suppliers and manufacturers were speculating on demand, ordering boom and increasing production before they had contracts in place. But The Wall Street Journal interviewed 11 manufacturers and suppliers who said they had contracts with BP or were delivering to those who did. Ten of those manufacturers said they now were out money.
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About a dozen manufacturers make all the boom used by oil companies, emergency-response companies and marinas in the U.S. The supply on hand dissipated quickly after the Deepwater Horizon oil rig, leased by BP, exploded in April, sending millions of barrels of crude oil into the Gulf. BP suddenly needed boom and lots of it.
But recently the Industrial Fabric Association International, which represents companies including boom makers and their suppliers, says it has received dozens of calls from members who say they are suddenly saddled with containers of inventory, canceled orders and no way to pay their mounting bills.
