Say Good-bye To a Tough Year For Automation

By the last quarter of 2008, we knew we were in for something.

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Automation World economics columnist Alan Beaulieu had been predicting a 2009 recession since early in 2007. By early 2009, we understood that we were in for a ride. I’m old enough to have lived through the effects of the 1973 “Arab Oil Embargo,” the recessions of the ’80s and the Dot-Com bust of 1999-2000. Without a doubt, this one is/was worse than those.

I have just returned from two technology supplier user conferences with the companies reporting year-end results as of Oct. 31 years. One was Advantech Corp. and the other Rockwell Automation Inc. Both announced Fiscal Year 2009 results that were dismal: total revenues down around 25 percent. Rockwell, though, had a very strong cash position, and each company remained profitable. Reflecting the general global trend, both salvaged profitability—and perhaps survival—at the expense of many jobs being lost. Thousands of jobs were cut by automation suppliers, many more by their customers, and even many jobs were lost at the magazines that cover the space.

On the other hand, the two companies reported that revenues for the fourth quarter of 2009 were up compared to the previous quarter. Both companies attracted large numbers of customers to their events. Companies are reporting increased quoting activity. The general economy is showing signs of shaking off sluggishness. Even the usual “doom-and-gloom” newspaper journalists who love to wallow in bad news are taking a more upbeat tone. Beaulieu predicted a mild 2010 recovery along with his 2009 recession prediction. That looks like what might be happening. We can only hope.

Our two best-read columnists are Beaulieu and industry pundit Jim Pinto. Each took a look at what has been happening and offered some advice for what to do coming out of the recession. This is not time to sigh deeply and congratulate yourself for surviving. Your competition is not standing still, so there is much work to do.

Beaulieu (see "What Happens Next for the Economy") says you need to be profitable at today’s reduced levels of economic activity. “We strongly suggest that you plan on leveraging your 2010 profits into missionary efforts to enable the business to sell boldly into new markets or to boldly sell new products/services that your customers want.” Pinto (see "Post-recession Planning") says, “The good news is that there will be lots of new business opportunities in the upturn. The bad news is that those competitors who survive will be leaner, meaner and tougher when they fight for market share in new opportunities.” Now is the time to be bold, position your company for the new opportunities coming around the corner and get your message out.

Talent needed

Pinto had further thoughts about coming out of the recession, “The winners will require top talent…” Laying off people is tough. One would hope they were all good. But if you lost your most talented and creative people, you’ll be hurting as you try to rebuild. On the other hand, we are still facing the loss of talent through retirements (probably temporarily postponed due to the uncertainty of the economy), so recruitment is an essential ingredient for assuring a supply of top talent.

There are tips in this issue. Managing Editor Wes Iversen reports on new technologies for training the next generation of operators (see "Operator Training Simulators to the Rescue"). Contributing writer Alex Anderson writes about programs exciting the next generation to get interested in math and science (see "Exciting the Next Generation Engineer"). In previous editorials, I’ve evangelized getting involved with young people’s education to get them excited about what you do. As you recruit top talent for this climb out of recession, budget some time to excite young people who will eventually replace you.

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