Modern Plastics Worldwide - July/August 2009 - dae uptlax

EDITORIAL
An abundance of
resilience
The recent NPE was an interesting
moment in time for a number of reasons,
but principally because the show
happened to be held in the midst of an
extreme market downturn. Most exhibitors
were upbeat or at least satisfied with
the event, and I can only recall one who
quite openly said he was disappointed
with traffic to his stand (he had a pretty
good location, too).
So I boarded the plane home hoping
that times were getting better or at
least more stable, but then read a wellresearched
article on “the second wave”
of the recession that, the author predicts,
is now crashing down and will continue
doing so over the next months. The first
wave was caused by banks’ and other
financial institutions’ irrational exuberance;
this second wave is due to lending
institutions that either are not lending or
are only doing so at scurrilous rates, and
then only to the most solid customers,
thereby starving plenty of companies of
monies they may need either to invest or
to help tide them over until the recession
ends. This aversion to lending is especially
painful to privately owned, small-
mpw.plasticstoday.com
Trade shows are just a moment in
time, and thank goodness for that, as
we’d all be in sad shape if we tried to
live on three hours of sleep per night. and moldmakers has been nothing short
to-mid sized enterprises, which account
for about 90% of plastics processors
and their machinery and molding/tooling
suppliers.
I don’t think this second wave is
news to any of us; this article struck
me only because it was particularly well
researched—frighteningly so. But in talks
in the past months, and most definitely in
Chicago at NPE, people repeatedly spoke
of fighting to be “the last man standing”
so that their companies can benefit when
the good times start to roll again. And
in fact, though there have been some
closures and M&A action, so far it has
been at a much slower pace than most
assumed. During a webinar earlier this
year, one of the sharper observers of
our industry, Jeff Mengel of Plante &
Moran, predicted about 13% of North
America’s roughly 7800 processors and
moldmakers would be out of business
by year’s end, victims of the automotive
slowdown and other painful economic
forces. I spoke with Jeff during NPE and
he agreed that the resilience of processors
of amazing. The year is more than halfover
but the pace of closures has been,
thankfully, much slower than anticipated.
That is not to say that there have not
been hard measures taken, and payroll is
down at many, possibly most, companies
in this industry, the result of layoffs or
workers forced to work fewer hours (or
be paid for fewer hours, regardless of the
actual workload).
So, this is a rather long way of saying,
here’s to all of you, fighting the good
fight. You are in very good company.
Matt Defosse,
Editor-in-Chief
MODERN PLASTICS WORLDWIDE • JULY/AUGUST 2009 9