2008: Executives make their predictions and share their concerns

By Joe Nowlan -- Industrial Distribution, 1/10/2008 8:40:00 AM

How do you think 2008 will be for business in general and your company in particular? Also, what are among your main concerns for the 2008 business climate?

Barry Gerin, president, PM Industrial, Chatsworthy, Calif.
“We’re looking at not a great year but a good year. We’re looking at some growth. Here in Southern California, I think we’ll get some good business with aerospace this year. Our medical customers are doing well, [as is the] automotive aftermarket … We’re also looking to expand. We’re going to add a couple of outside salespeople this year. [All in all] we think it will be a pretty good year.”

Concerns
“The ‘uh-oh scenarios’ are the things we’ve been talking about for decades: qualified people. We’re the kind of distributor looking for a customer to call us with problems. So the people we hire for inside or outside are people who have knowledge or whom we want to train. … We‘re focusing on training as one of our core values, to have an educated staff.

“[Another concern is] the amount of products going off shore to China. I know there’s a lot of talk about it coming back here, because the quality is not good over there. But there’s too much profit for [China] not to fix the quality issue. I think over time the quality issue is going to be fixed. And if it’s not going to be China, it may be Vietnam, different places that will get it done.”


John Hughes, vice president of bearings and power transmission, Precision Industries, Omaha, Neb.
“We’re pretty sure that 2008 will be a good year for us. We have a number of national contracts that we landed in 2007 and we’re in the process of implementing [those] in ’08. So we look for it to be a good year.”

Concerns
“As long as the economy stays reasonable healthy—we’re diversified enough that we do pretty well. But a few years back we had a slowdown and we really felt that. So as long as the economy itself stays pretty healthy … we’re all pretty much optimists here anyway.”

Tim Ulshafer, vice president of sales, Strong Tool Co., Cleveland
“We had a good year in 2007. And a lot of the things driving sales last year are still present and should continue. But it’s really spotty out there by industry. If you look at the medical industry, that’ll be strong and only get stronger. But if you look at U.S. automotive, that could be a different story.

“We’ve aligned ourselves with industries that are growing. … You have to go out and find the prosperous niches to serve. Going forward [though] economically, I don’t know. I’m hearing some pretty bad things. I’m sure [we] will be impacted, but I think the diversity of our customers and vendor materials will allow us to continue to service those niches well and continue growth throughout the year. I think it’ll be stronger towards the end than in the beginning.”

Concerns
“I’m concerned about the price of gas. If that continues to rise, how [often] can I put my guys in the field? How much will that cost us? What will it all mean to overall expendable dollars out there among the general population? The higher gas goes, the less there is to spend on everything else. And that’s a challenge we’re all going to have to deal with.”

Clarence So, CMO of Salesforce, San Francisco
“I know there’s concern, especially in North America, that we’re on the cusp of a recession or ‘stagflation.’ Now who’s to say if that’s going to happen, but what I’ve seen before in history is that companies will start to hunker down and focus on what’s really important. When they do this, they focus on their core customer relationships. Keeping your existing customers is more profitable and less expensive than going out and finding new customers.

“Companies should probably think about the way they work with their customers so they can hold on to them during times of uncertainty.”

Concerns
“I worry about the economy, though, because we all have a lot tied into our economy here, and there are some very powerful forces in the international markets out there. So we need to do what we need to do to keep ourselves healthy and keep long term planning so we don’t do short term things that will hurt us five years from now.”