(From the Sept. 5, 2011, issue of Rubber & Plastics News)
AKRON—The economy is stagnant, banks won't lend, political partisanship has made government dysfunctional, too unable to help. What's a rubber industry company to do?
The best advice seems to be to do what it takes to survive now, but prepare for the inevitable end to the economic doldrums.
Dennis Byrne, emeritus professor of economics at the University of Akron, had it right when he spoke Aug. 23 at the Hose Manufacturers' Conference in Independence, Ohio. The long-time rubber industry observer believes companies need to ensure they will be one of those left standing when demand finally picks up, but they also should investigate new opportunities that may present themselves when sluggish demand improves.
Byrne agrees with estimates that growth will be unimpressive for 14-18 months. Of course, no one can predict the future, and so many negative factors have piled on it makes forecasts even more difficult than usual. The huge federal debt, brinksmanship that hurt the nation's credit standing, the economic mess in Europe, Wall Street jitters and the seemingly endless mortgage crisis are just some of the issues that stymie the recovery.
Rubber companies can't change that situation; their managers only can deal with it.
If you did things right during the last recession—and you must have if your company is still around today—it really is time to get ready for the future. If there's a market you believe your business could exploit, start the preparation, be ready to jump when demand improves.
When the business cycle does turn up, companies that have the capacity, processes and products to meet higher demand will reap the benefits. Be one of them.