In the face of the worst downturn since the Great Depression, how are North Texas business leaders viewing the second half of 2009, and what are they doing to cope? We decided to ask a few, all finalists in this year’s Entrepreneur of the Year competition sponsored by Ernst & Young.
Dennis Bloom, Ameriplan USA: “I believe that 2009 is going to be a difficult year. I just viewed some statistics from the Direct Sales Association—our [health insurance] company is a direct marketer—and in ’08, everybody was down. The first quarter of ’09 was about the same, and I think we’re going to continue seeing that. But I do believe we’re going to have a turnaround in 2010. What we are doing is positioning ourselves to take advantage of that turnaround, either in the last quarter of ’09 or the first quarter of ’10.”
Robert Wright, Murex N.A. Ltd.: “The next couple of quarters we think are going to be pretty challenging. We’ve got a lot of different customers that are either having problems or financial issues of some sort, and the banking environment is pretty tough. So our biggest issue now is credit—the ability to give credit and the ability to get paid for that credit. We’ve had a couple of our customers go bankrupt on us, including a good-sized independent oil company, and the stock of a lot of the public companies has been compressed. We’re in the gasoline business, so our volumes aren’t really off; in fact they’re up a little. But the environment is much more competitive as far as pricing, the amount of margin we make. Meantime, we’re trying to help our suppliers any way we can. Sometimes we’ll pay them quicker, sometimes we’ll do more services for them. Our goal is to keep them in business, to keep them as healthy as we possibly can.”
Eric Affeldt, ClubCorp Inc.: “I believe that if the recession hasn’t already started to trough, it will by the end of the third quarter at the latest. Relative to our [private clubs] business, we’re starting to see a little relief in terms of memberships being sold at the clubs, and also a little relief in terms of people quitting the clubs. So I think by the end of the third quarter, we will be through the worst of it. We’ve tried to focus our cost-containment to corporate overhead and what I would call more hidden areas, the back of the house areas, as opposed to front of the house—a bartender, a waiter, a golf professional. We’re also continuing to create plans to take even more costs out of the business in case I’m incorrect, and we’re not hitting the trough here.”
Lew Kling, Flowserve Corp.: “We announced a $40 million restructuring where we’re removing some people around the world, and we closed two factories. The other, probably more important way [we’re coping] is getting very close to our customers. When you can convince your customers that you can deliver product on time, and it’s going to work and it’s at a fair cost, your customers will keep coming back. That said, projections for the year are very good going forward, as of the end of the first quarter. As an [industrial-equipment] company, we’re seeing some slowdowns in the case of big projects coming online, big projects being let, but we haven’t seen many cancellations. So if there’s few cancellations and just some delays, you have to be optimistic.”
Optimism’s the watchword, then, as Kling says. And, who knows; if enough of us stay positive, we may be growing again before you know it.
