ork,
I like to be polite when I'm telling someone they are wrong <g>
This week I met with the number two for a major supplier in North America. He and one of his guys flew to our headquarters to meet with me and our top guy in North America. We did the exchange thing and I was shocked to see they grew sales by a few million last year. With sales down significantly, this was impressive. How did they do it? This company supplies 35% of the total market for a certain high value component for NA automotive. They are run by a prudent owner and carry almost zero long term debt. They had a massive short term credit facility that was significantly reduced without notice. But they had cash. And that cash allowed them to pick up the vast majority of work from two major bankruptcies last year from two of their main competitors. The strong get much stronger and those with debt and no cash or credit are not invited to the vultures feast.
Now, a brief personal automotive update. To my shock, my number two was fired last week. A complete shock to me and to him, for we had submitted our 2009 plan in December and it was fully approved and funded by the board. Why did this happen? Two reasons. First, it appears that my right hand man pissed off the board by refusing to accept a relocation offer three times. I knew about this and supported his decision to stay with the Detroit automotive team, but I underestimated the negative impact his rejection would have with our global director and boss in Europe. But here is the real reason. We are a private company and we have activity in so many industries that our product offering is a very good bellwether for the health of the global economy. What I have heard is that something absolutely freaked out the owners in the past 60 days. I've seen the numbers (almost daily now, as there are a series of reports from all the divisions and segments on sales and production orders in the system), and they are scary. There are only three areas that are meeting plan, and the plan numbers were massively revised downward in October. So, my number two was a big salary guy (he actually makes quite a bit more than I do, but this is because of his length of employment) and was the first significant loss from the automotive team. We lost some production people in the fall and we lost some allocation time from "shared employees" like service, legal, and quality in December, but this is the first core team member to get cut.
I've heard that all of our Asian plants are down 40-50% from last year in production and sales. We are a global company and the indication is that things are about to get much worse. We don't produce any direct products, but like BASF, our stuff is absolutely everywhere. We always joke with people that they have ten products from our company in their house and at least two on their person at all times.
GT
TH |
