Company says it needs $2 million to avoid defaulting on loans - NewsOn6.com - Tulsa, OK - News, Weather, Video and Sports - KOTV.com |

Company says it needs $2 million to avoid defaulting on loans

Updated:
TAHLEQUAH, Okla. (AP) _ A Cherokee Nation electrical component business needs $2 million from the tribe by next week to avoid defaulting on money it owes to the bank, the company's management said.

The report to the tribe from Cherokee Nation Industries claims 157 jobs are at risk in Adair and Cherokee counties because of the situation.

If a tribal loan doesn't come by June 15, CNI will be over its credit limit by $2 million and all future incoming cash will be demanded by its bank to pay down the company's line of credit, the company report said.

The tribal council has sent accountants to CNI to assess the situation.

Council research shows CNI paid $16 million to one supplier at the same time sales stemming from that inventory dropped from about $3 million a month to less than $500,000.

Principal Chief Chad Smith said at worst it will take between 10 and 18 months to use up the excess inventory.

Tribal Councilor Harold DeMoss said there is no guarantee that a $2 million loan would save threatened jobs, but Hiram McFarland, president of CNI, disagreed, calling the issue ``a short-term cash flow problem.''

Tribal councilor Barbara Starr Scott said she is wary of giving CNI more money unless management changes are made.

CNI began in 1969 and provides electrical wiring components for government projects and the aerospace industry. It also puts together telecommunications components and hires government medical personnel, engineers and scientists.

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