10.01.2008

Taylor Wimpey squeezes suppliers

Taylor Wimpey, the UK’s biggest housebuilder, is cutting payment to its subcontractors and suppliers by 5 percent as a result of the toll the credit crunch is taking on its business.

The company says that it needs to take 'urgent action' after a difficult year for the housebuilding industry and a tough economic outlook.

The 5 percent reduction in price applies to all outstanding works on existing orders and future orders placed after 2 January 2008.

The letter to suppliers said: "We are reviewing our own overheads, house designs and build processes to drive out inefficiencies, but also need our subcontractors, suppliers and consultants to play their part."

It said: “We have not taken this decision lightly but it is essential that we take this action if we are to secure the long term business for Taylor Wimpey, our subcontractors, suppliers and consultants.”

The housebuilder also said it may review its credit terms for suppliers if it is not able to reduce overall costs.

A Taylor Wimpey spokesperson said: ”Taylor Wimpey is committed to reducing costs and we expect our trade partners to work with us to do so."