Economic dowturn 2

[555-04Q2]

Following on from the original one started by schmenke...

How are other people finding things in the rest of the world?

Following on from a record 2008 where we doubled our turnover and tripled our profits, our company has just posted a record first quarter ending March 2009. We also have confirmed orders that will provide us with record quarters between April - June and July - September 2009.

All of my business friends are reporting similar trends with their businesses over here in little ol Seth Efrica.

[jim mcglinchey]

I'm allright Jack ! What business are you in to we all get a slice?

[555-04Q2]

80% of our market is manufacturing large standby diesel generators for stadiums (sadly we didnt get any of the 2010 FIFA work), shopping malls, factories etc as well as customised electrical panel systems and installations.

Most of my fellow business owner friends are in totally different fields to me but still reporting good growth like ourselves even though times are supposed to be tough at the moment. I was just wondering if other countries/regions were also as fortunate as us.

I see on the news continual bailouts, mass job losses etc worldwide and I'm trying to get my head around the current world situation. We have even seen a strong growth rate in our exporting which should actually be down.

[jim mcglinchey]

Locally here in NI there is a division of Caterpiller called FG Wilson who also supply generators and they have had to lay off alot of temp staff due to a real downturn in demand, but to put it in context the downturn comes on the back of really successful years so its hard to say how serious it is.

[555-04Q2]

Yeah we know FG Wilson very well. They are one of the biggest generator manufacturers in the world. They are represented by a local distribution agent in Southern Africa. We are lucky, as we manufacture everything in house, we dont have to pay import duties on complete sets, therefore we are a lot more competitive price wise with our Volvo Penta and Perkins powered sets.

South Africa is still growing strongly in our field while the factories in Europe and the USA are laying off staff at a phenomenal rate. One of the directors of an alternator company that supplies us said that if it werent for the demand from our country last year, they would have been in serious trouble. We were their largest customer for the period July-December 2008. Scary thought!

[Easy Drifter]

I am not aware of all the facts involved in your success but might labour costs be a major reason for your ability to keep prices below most of the competition?
Currently a big fight here with the proposed sale of Chyrsler to Fiat is labour costs where, according to Chyrsler the rate of compensation with all benifits is $76 per hour. They want the Cdn. Autoworkers Union to agree to a compensation package of approx what Cdn. Toyota and Honda factories pay at about $56 per hour. That is not straight salary but includes all benifits such as future pension, insurance, medical and dental etc.
It is rather complex.
The CAW are going to have to give up quite a bit to ensure Govt. bailouts or else face Chyrsler and maybe GM going bankrupt.

[schmenke]

The downturn has hit the province of Alberta hard. All work here is directly related to energy, specifically demand for petroleum.

However, my company is a bit of an anomaly as we are actually fairing well. I work for a large engineering company (one of the largest in the word in fact). Our Alberta-based operations provide services to many of the oil 'n gas giants inovlved in (what else) oil sands mining and bitumen production.
All our competetor companies have been forced to lay off hundreds in the last few months, but our company is fortunate to have recently signed a couple of large contracts that is providing us with steady work for the next 3 to 5 years.

An iota of recent positive news for the province is that three of the large petroleum companies have announced that they will be re-initialising some capital development projects that they have previously put on hold.

[Mark in Oshawa]

The downturn has hit the province of Alberta hard. All work here is directly related to energy, specifically demand for petroleum.

However, my company is a bit of an anomaly as we are actually fairing well. I work for a large engineering company (one of the largest in the word in fact). Our Alberta-based operations provide services to many of the oil 'n gas giants inovlved in (what else) oil sands mining and bitumen production.
All our competetor companies have been forced to lay off hundreds in the last few months, but our company is fortunate to have recently signed a couple of large contracts that is providing us with steady work for the next 3 to 5 years.

An iota of recent positive news for the province is that three of the large petroleum companies have announced that they will be re-initialising some capital development projects that they have previously put on hold.

Schmenke, your downturn will go away the second oil starts to go up over 50 bucks a barrel. Isn't there a bumper sticker out there with the statement "Lord, I promise to be more careful with this boom than I was with the last one" or something to that effect?

It is the nature of the Alberta economy to be up and down like a toilet seat.

My business (trucking for a company doing good business in generic products) is limping along. Our company related freight is doing well, but it has never been enough to keep the trucking side of the operation going by itself, so we rely on other business to keep all us long haul guys moving.

I think the Canadian economy outside of the auto industry is actually hurt more by the US issues than anything that has happened up here. Canada was the only G7 nation to not lose a bank. Heck, they are still recording big profits and buying up US banks. TD is now the 3rd largest bank on the Continent, something unheard of 10 years ago.

I do think though none of that means much if the US doesn't get a turn around soon, and while all the money spent should do something at some point, I am afraid all Obama's ideas have been politically twisted into social engineering more than just getting the economy going. Building or spending money on programs that wont make money for the country long term will do little long term to help the economy. The economic engine of the US is sputtering, and a flood of cash wont help it, just like pouring gas in a carburetor would flood a motor. You need cash and you need people in a postion to make it work for the economy. Hiring people and putting them in government programs wont stimulate the economy.

[schmenke]

Schmenke, your downturn will go away the second oil starts to go up over 50 bucks a barrel. ...

No, it's gotta be a bit higher than that. Closer to $60 to $70 is what most oil 'n gas companies have used as a break-even cost on the ROI of their capital projects.

[J4MIE]

Thanks to my company's contractors well and truly messing up and being generally useless and money grabbing fools, we are quite safe for the moment and will probably need to expand in our office slightly over the next few months. The number of customers complaining will keep us busy for now too...... :(

[555-04Q2]

I am not aware of all the facts involved in your success but might labour costs be a major reason for your ability to keep prices below most of the competition?
Currently a big fight here with the proposed sale of Chyrsler to Fiat is labour costs where, according to Chyrsler the rate of compensation with all benifits is $76 per hour. They want the Cdn. Autoworkers Union to agree to a compensation package of approx what Cdn. Toyota and Honda factories pay at about $56 per hour. That is not straight salary but includes all benifits such as future pension, insurance, medical and dental etc.
It is rather complex.
The CAW are going to have to give up quite a bit to ensure Govt. bailouts or else face Chyrsler and maybe GM going bankrupt.

Actually, our skilled labour costs are pretty high, especially when you compare labour cost/efficiency vs most other countries.