Times are tough, despite the promise of an economic recovery by the experts.
Business can still be difficult to come by, stock prices are as volatile as ever and investors are scrutinizing every move business leaders make.
Here’s a look at how three local executives plan to navigate through the recession to better days. All three were part of a roundtable discussion at the “Doing Business in Turbulent Markets” seminar sponsored by Calfee, Halter & Griswold and McDonald Investments.
Spread the risk
Invacare is a manufacturer of health care products, but even with an aging population, the company has had to adapt to changing market conditions, according to Gerald Blouch, president and COO of the company.
Changing reimbursement policies in Western Europe and the ever-changing U.S. health care market have made the company examine its risks, and executives there opted for a mutual-fund like strategy.
“We run the company like a portfolio of investments,” says Blouch.
Risks are spread among the company’s products to minimize the effects of a downturn in any given market.
Invacare has revenues bigger than it’s next two competitors combined, but being the leader means spending time in Washington making sure legislators understand the needs of the industry.
This lobbying also gives the company a better idea of how the government will change reimbursement for programs like Medicare so the company executives can plan for any changes.
Think long term
Lamson & Sessions is a plastics manufacturer with heavy ties to the electrical and telecom industries.
Telecommunications companies have taken a big hit during the recession, meaning there is less demand for telecom-related products.
“We’ve been focusing on our cash flow,” says James Abel, executive vice president and CFO of Lamson & Sessions.
The company has restructured some of its debt to lengthen the term to free up cash in the short term. And while the industry as a whole is suffering now, Abel says the company is strongly positioned to be a major player when telecom rebounds.
“For the long-term, it’s a great play,” says Abel. “For the short-term, bankers are scratching their heads about what we are doing.”
Cut costs and search out new opportunities
Oglebay Norton Co. is a producer, processor and distributor of industrial minerals that has had to reinvent itself and cut costs.
Last year, the company closed several offices and merged parts of its business operations together to eliminate redundancies. A heavy reliance on a fading steel industry also forced company executives to re-examine the company’s goals.
“We had to ask ourselves what business are we in,” says Michael Lundin, president and COO of the company. “We were tied to steel, but now that’s less than 15 percent of our business. We are an industrial minerals company, but the distribution is more important than the products.”
