A New Year of ‘What-Ifs’
In with the new and out with the old. Doesn’t ring
quite right these days, does it? After all the tragic and surprising events of
2001, we’re feeling apprehensive, nervous, even frightened about 2002.
Terrorism is now a major part of the American world, and we’re at war
with an enemy that might be anywhere and everywhere — across the oceans,
right next door or on the shop floor.
This is new to most of us. Not since Pearl Harbor has
America had to respond to a direct attack. Sixty years ago, the country’s
leaders, its industry and its people united in a war effort the likes of which
had never been seen before. Last year, we went through a similar situation and
people are still wondering out loud: What if?
What was tested all last year, and will be for this year as
well, is American optimism, particularly in terms of the economy and
specifically in terms of business and manufacturing. What if the recession
— which is now official although who in industry didn’t know it was
here almost a year ago — turns into a lengthy one, a deep one?
What if situations like the bankruptcy of LTV Steel in
Cleveland become common in the metals industry? What if other large
manufacturers follow suit?
On the other hand, what if the economy soars in terms of
manufacturing output and zero inflation and unemployment drops to three percent
and the Dow actually does go to 36,000? Remember that prediction? Remember
irrational exuberance?
Well, according to the CFOs of 300 middle-market
manufacturers responding to a survey by Fleet Capital Corporation, exuberance
is going global. Ninety-two percent of the companies surveyed sell to foreign
markets. Nearly half (47 percent) expect an increase in foreign sales in 2002,
while 42 percent expect exports to stay the same, and only eight percent
anticipate a decrease in sales to foreign markets.
However, 49 percent of respondents indicate that another
large-scale terrorist attack similar in magnitude to the September 11 tragedy,
which many economists believe pushed the U.S. economy into its official
recession, would have a significant impact on the national economy.
Says James G. Connolly, president and CEO of Fleet Capital,
“The CFOs’ optimistic outlook is consistent with the demand
we’re seeing for financing acquisitions and other growth
activities.”
Another survey of manufacturers of durable goods says this
year they will spend eight percent to 10 percent more than last year or some
$15 billion. Only 15? Keep in mind that’s the durable goods folks,
machine tools and so on. That’s a whopping increase! Durable goods
companies are the most telling bellwether industry in the economy and their
capital spending plans suggest a mighty busy metalworking year. Gardner
Research of Cincinnati did this survey, but several others have come out with
similar predictions. Meanwhile, productivity and consumer spending are up while
inflation is close to zero. What if?
Manufacturing managers should ask themselves “what
if” every day, and apparently, many of them do. The American manufacturing
manager has always been the ultimate problem-solver and, I’m sure, will
continue to deserve that title.
The world still looks to the U.S. for examples of the
successful application of industrial technology. We have been setting good
examples for generations. America and American manufacturing is the hope of the
world. Nothing about 9/11 or 2001’s sad and frightening events has
changed that. Happy New Year!
George Weimer
contributing editor, weimerg@fleishman.com
