A Look At How People Are Coping In Tough Times
As the industry—along with the rest of the world—faces a tough economic landscape, various companies are responding in different ways. Some are turning to layoffs and belt tightening while others are consolidating with the expectation that better days are around the corner. It may be business as usual for most of the industry, as creative solutions are sought to keep companies afloat.
An interesting scenario is playing out at Strand Lighting, a company over 100 years old, which is now part of the large Genlyte/Philips Group. In fact, there were rumors that quite a few people had been laid off around New Year’s Eve and that the Cypress, CA facility was closing. Strand’s general manager, Tom Folsom tells the true story: “Strand will be letting 15-20 people go,” he confirms. The reason being that several Philips facilities in California are being relocated due to factory consolidation. “This came down in November 2008,” Folsom explains, pointing out that for Strand Lighting, 2008 was the best year for the company in over a decade in terms of sales and profit.
The Philips consolidation plans mean that Strand’s manufacturing of dimmers and controls will in fact be moving to Dallas, but at least eight factory employees are moving as well; another 20 will remain in California. Folsom adds, “We have a five-year lease and weren’t planning on moving, but Philips wanted to consolidate wherever possible. Now we have the longest lease in California and other people may be locating here. Most of the jobs are not going away.”
Folsom says that Strand is looking at a strong budget for 2009 and expects sales numbers to remain about the same as last year. “We have quite a lot of school projects and the pipeline for school bonds is deep. Decisions made 22 months ago are still going to happen.” Folsom also points out that the economy in Texas has never been worse except back in 1987-88, at which time he had some major projects there including the Wortham Center in Houston and the Meyerson in Dallas. “Those were built during the deepest recession we’ve had until now. Performing Arts Centers and schools live by a different heartbeat.” On the other hand, Folsom concedes that residential and commercial work is down, but “those are not our strengths anyway,” he says.
“It will be a tough year but we will survive it. Philips is good about budgets, and we have actually accelerated some R&D issues. The factory consolidation may be a little inconvenient but it costs less to support labor in Dallas than in Southern California, so there is a cost-savings there.” Folsom adds that there will be a new range of architectural products launched at Lightfair in New York City this spring, marking their first new products in this area in quite some time.
“There are some concerns but we are holding our own,” Folsom notes. “Some of the small companies may go away which is a shame but I’m cautiously optimistic. Rental shops will continue to buy, but as new shows happen, and we really only sell consoles and the Light Rack to that professional rental market. And Epic Production Technologies seems to be holding its own, and PRG seems to be busy."
At Wybron, the reaction to the downturn was creative, as witnessed in this statement issued last Friday by the company: “As you know, the US economy is in a major recession. Just turn on the TV or read any newspaper—unemployment claims have reached a 26-year high as hundreds of thousands of people across the country have lost their jobs. Here at Wybron, sales have slowed, but instead of laying people off, we’ve pulled together. To correspond with a reduction in work due to the struggling economy, we’re reducing employees’ hours by 20 percent. Everybody’s making the same hourly rate they were before, but they’re working fewer hours. We’re still open five days a week, and we’ll still provide the same quality service that our customers know they can expect from us. The response from Wybron employees has been awesome. When everyone found out about the new schedules, not one person left! Instead, everyone said, we care about this company and what we do, and we’re going to do what it takes to ride out this economy. The reduction is not permanent; it’s temporary until the economy improves.”
Part 3 Will Be Online Tomorrow.