54
ANALYSIS
Taking the Janus view
It is the gateway to a new year. The turbulent events of 2009 are still fresh in mind and a myriad of
questions abound over 2010. The time, then, to invite fastener business leaders to refl ect on the past
year and consider the prospects presented by the new one.
“The crisis is far from over.
“Communication is key: with
But hopefully the challenge
customers, suppliers and, last
of 2010 will be to gear up
but not least, employees.”
again when the wheels
Andy Harland
managing director,
start to turn faster.”
Caparo Atlas Fastenings Ltd,
Anders Karlsson
United Kingdom
president, I hope in writing this I am not feeling ‘deja vu’? We have just
European Industrial Fastener Institute
reviewed our order load for Q1 2010 to see that we are in line with
the budget. A feeling I had also in 2008, until the 10th December!
2009 was the year that never started - after 2008 suddenly Although December 2008 was dying, the order book for January
died in November. The challenge for all was to manage an industry and February was in line with budget and we were actively
when business levels crashed to a quarter of normal volume without manufacturing to our customers demands. Then in an instant the
warning. You look in your box of management tools and there are order book was halved. We took immediate action to close the
none such available. All actions to reduce capacity - like closing manufacturing side and three weeks of shutdown followed.
factories, reducing staff - take much too long time, cost a great deal So would 2009 bring a change towards optimism? No. It was
and drain the small cash fl ow that you have. even worse, with some customers locking their gates so one could
The main objective rapidly became to preserve cash fl ow in a not deliver! It was certainly a time when you discovered which
period when no bank would willingly lend you any money – the customers really believe in partnerships with their suppliers and
worst side effect from the fi nancial institutions’ own crises. Nothing those who clearly do not! Thankfully one of our larger customers
realistic materialised from our politicians. Promises of bridging loans did attempt to work with us and share some of the pain and with
etc all had to be backed by securities and repaid within the year. So support from our parent, Caparo Vehicle Products, the storm has
everyone started to reduce working capital in a supply chain already been weathered and we can move forward into 2010 looking to
over full of stock, which simply increased the effects even further. grow and develop the business further.
Orders from the manufacturing industry dried up completely in the The scars of 2009 are still visible. Good, well-run businesses
fi rst few months, affecting both traders and manufactures in the have folded and perhaps been re-born. Doubt remains on some
fastener industry immediately. We all felt the negative effects of but it does appear that there are some positives to take out of this
long lead times making it diffi cult to adjust to new business levels. experience and lessons to be learned:
At the beginning of 2009 we all feared the big bankruptcy that
would create the domino effect and drag us all down. We did see
• Communication is key: with customers, suppliers and, last but
a number of closures in the fi rst half-year but actually the industry
not least, employees. There has been increased openness and
managed much better than predicted. Well done!
support for each other, confi rming you were not in this on your
A big help was the various scrappage schemes that got the
own and encouraging you to fi ght harder to make it through.
automotive industry back working quickly. Others sectors, though,
were and are still operating well below 2008 levels. Anyway, the
• Market diversifi cation: Reliance predominantly on one industry
average offers no help to a company that has a narrow customer
is extremely dangerous. Our available capacity has given us the
base that fails completely. You simply had to have successful
opportunity to move into solar, construction, furniture and general
customers or a broad base to survive.
engineering as well as maintaining a strong automotive bias.
The crisis is far from over. But hopefully the challenge of 2010
• Margin: When you were just looking for an order anywhere, it
will be to gear up again when the wheels start to turn faster. Then
was very easy to lose sight of the saying ‘sales is vanity, profi t is
once more there must be capital available from bankers, who must
sanity’. Eliminating unrealistic price wars is essential.
recognise the possibilities of opportunities and growth. Unfortunately
that will not be so easy, even though the industry works with a huge The fastener industry should now understand its vulnerability to the
overcapacity at the moment. It takes time to increase staff levels global OEMs. They can be expected to match vehicle production more
and once again to operate the shifts that were closed in 2009. closely to customer demand. This should mean, if other shock waves
For sure, 2009 will be a year always remembered and talked happen again, the drop should not be so exaggerated. The way the
about for generations. Winners will emerge, though, and the industry responded in minimising the number of jobs lost, looking
fastener industry will come out of this crisis restructured and for other cost reductions before people, can only help to revitalise it
hopefully much stronger. for what we all hope will be a much more prosperous 2010.
Fastener + Fixing Magazine • Issue 61 January 2010
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