Lantech CEO says recession will make strong companies stronger - Atlanta Business Chronicle:

moakhamet84.blogspot.com
From its headquarters at 11000 Bluegrass Parkway in Lantechsells pallet-wrapping equipment costing betweenb $10,000 and $300,000 each to some of the world’e largest companies. “Eighty percent of what your readersz buy comes across one of my machine on its way tothe store,” said who is CEO of Lantech. Customers includw international consumer companies suchas , and gianty breweries. “We touch a huge percentage of products that move as any sort ofpackagedc goods, and we were hit like all the other capitalo equipment companies,” he said.
Yet, Lancaste r sees not only his company, but all strong American businesses, coming out of this recession more efficientr and ready to investg in capital equipment after having been on cruised control duringboom “I feel better about the prospects of this country’xs competitiveness than I did three, four or five yeard ago,” he said. “I’m not the only one thinkinyg about getting the cost structur e of my company under control. People are focused on their ‘knitting,’ making what happens in their fourwalls “You take that times a bunch of business, and it’zs a big deal in terms of the competitivenesa of this country.
” Not that it’s been fun. And not that the economg is back. Lancaster said 2008 starter out well on pace to tophis 37-year-oldx company’s best year ever, 2007, when Lantech had about $120 million in gross revenue. As of May orders were up 17 percentf overMay 2007. But in business slowed dramatically, first in the Unitexd States, then in Europe and Asia. “Whebn Asia dropped, it didn’t just It stopped,” Lancaster said. Companies that were leveraged and took 5 percent to 50 perceng revenue hits are or they’re in the procesw of dying, Lancaster said.
Companiesa with manageable debt, such as suddenly had the time and incentive to startr restructuring and investing intheir businesses. Lantech has no impetusd to keep cash in the bank drawing 1 he said. “We’re making way bigget investments in our businessthan (before the downturn). This is not money-managementy time. This is the time to invest in producrtdevelopment … to improve long-termj competitiveness.” But last it was time to cut staff so that Lantech didn’t start losing money. Lantech has had to cut its loca l staff to about 300 Lancaster said.
Lancaster declined to say how many people he was forcedto cut, but the compan y had 350 employees in Louisville last year, according to Businesas First’s Aug. 29 list of the area’s largest manufacturingb firms. “We just dropped (the work force) to breajk even,” Lancaster said. “We didn’t want to (lose money) and set ourselvea up for being weaker againstthe competition. We cut not to hold our profitability percentage, but just to break even.” Remaining staff started rethinking how Lantechis run, “makingt hundreds if not thousands of decisions,” he said.
Lantecgh saved $2,500 per month by buyinyg out leases for dumpsters and trash compactorw and buyingits own. Renegotiating phonee services saved another Consolidating off-site storage areas saveds $9,000 per month. The money saved —hundreds of thousands of dollars per monthin non-payrolo expenses — kept the companyy from drastically cutting its work Lancaster said.