Article Number : 4288 |
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| Date | 3/13/2009 10:29:30 AM |
| Written By | LGM & Associates Technical Flooring Services |
| View this article at: | //floorbiz.com/BizResources/NPViewArticle.asp?ArticleID=4288 |
| Abstract | EXPLANATION: Commenting on Mohawk Industries’ disappointing fourth quarter results, Jeffrey Lorberbaum, chairman and CEO, said: “We are in an unprecedented time with the U.S. and world economies under great stress. Our category is suffering from the same issues as the entire economy, including increasing unemployment, falling consumer confidence, limited credit availability and declining business investment... |
| Article | EXPLANATION: Commenting on Mohawk Industries’ disappointing fourth quarter results, Jeffrey Lorberbaum, chairman and CEO, said: “We are in an unprecedented time with the U.S. and world economies under great stress. Our category is suffering from the same issues as the entire economy, including increasing unemployment, falling consumer confidence, limited credit availability and declining business investment. In addition, the housing contraction has had a significant impact on the purchase of flooring for our residential channels.” Like most companies in this industry and outside it, management must steer the ship through turbulent waters and try to stay afloat with as little damage as possible. MORE MOHAWK: Lorberbaum went on to explain the company’s position in 2009 and measures it is taking to tighten belts this trying year. “In this environment we are focused on cash flow and the balance sheet. Our balance sheet remains strong with over $850 million in credit availability. All of our business units have a priority to maximize cash by reducing costs, improving working capital, limiting capital expenditures and focusing on actions which positively impact sales and margins. All of our segments have taken aggressive steps and our capital structure and future cash flow will allow us to manage through the downturn.” That $850 million is on hand for an emergency or for acquisitions. Warren Buffett, the quintessential businessman and investor, says now is the time to buy— when prices are low. GIRDING: Before the year ages, a new survey by Mercer, a consulting firm, published in Workforce Management revealed that one in four companies has frozen salaries and that number may rise to one in three by the time 2009 budgets are done. Also, this year executives are less likely than their subordinates to get a salary increase. The biggest budget drop was at the executive level, where 77% of the more than 400 respondents plan to decrease their salary budgets from their 2008 projections. Organizations still budgeting increases for 2009 have trimmed them to 3.2% overall, down almost a half percentage point from mid-October projections of 3.6%. As painful as salary caps or salary cuts are, they beat the alternative. Unemployment is a devastating human condition. STIMULATED: The Associated General Contractors of America (AGC) strongly endorsed President Barack Obama’s stimulus package after scrutiny and approval by its chief economist, Ken Simonson. He said the $787 billion in aid, now signed into law, includes more than $135 billion in construction and infrastructure investments and will boost personal earnings by $75 billion and the Gross Domestic Product by $230 billion. Simonson concluded that the infrastructure and construction funding will create or save 650,000 construction jobs and 300,000 positions in related fields, such as equipment and material supply, and an additional 970,000 jobs in the broader economy. Said Simonson: “Beyond the immediate benefits, the new infrastructure projects will make businesses more efficient, commuting more reliable and our economy more prosperous for years to come.” My kind of guy. REPORT CARD: That outstanding panel of industry executives that played to an SRO crowd during Surfaces 2009 received high ratings from the moderator, a knowledgeable and savvy professional. The topic was: “Prevailing Through the Current Crisis—An Industry Wake-Up Call” and more than 1,000 people were in the audience. The moderator was Gerri Willis, personal finance editor at CNN and host of “Your Bottom Line,” and she wrote: “The panelists were very smart and articulate. It was interesting to hear from the audience who asked great questions. Having bought floor covering recently, it was fascinating how the industry was dealing with this very difficult economy, as well as their strategies for surviving the downturn. Another issue that drew my attention was the degree to which these businesses were first into the recession, which makes you think they will be the first out. I was impressed with the charitable aspect of the event (FCIF) and the attendance. This is clearly an industry with a heart.” She won me over with industry “first out” of the recession and industry “with a heart.” |