Top Execs Share Their (Sad) Thoughts On The Economy

BusinessWeek interviewed eight corporate execs about the their thoughts on the economy. It’s really interesting to hear their perspectives. Here are excerpts from their comments:

  • FRED SMITH, FedEx: It is by far the worst I’ve seen in the 35 years I’ve been in business… The only good thing is that if anything turns this around, it’ll be pretty quick, since inventories are at such incredibly low levels. But I’d be very surprised if anything started to turn around before the middle of next year.
  • ROBERT NARDELLI, Chrysler: …our 6.5% unemployment rate… could go to 10%-plus. Even with aggressive resizing, we can’t keep up with it because we haven’t seen the bottom.
  • RALPH DE LA TORRE, Caritas Christi Health Care: We live and die on the tax-free bond market, and right now we’re dying… I think there’s going to be a pretty substantial consolidation in health care. As many as 20% of hospitals could close. There’s going to be no capital spending for at least the next year or two.
  • MILES WHITE, Abbott Laboratories: If you’re on a drug that’s reasonably discretionary, you might cut back as a patient. But if you’re on a drug for a chronic problem, you’re not cutting back… I wouldn’t call [our situation] severe.
  • LEWIS HAY, FPL Group: Probably 25% of our customers are past due. Normally, it’s more like 15%… With such a shortage of access to capital, how are we going to get all these alternative energy projects going?
  • DENNIS DAMMERMAN, former GE vice-chairman:  And while I don’t agree with much of what Barack Obama wants to do, I think that for a great chunk of our consuming public, he has improved that confidence. I hope this enthusiasm doesn’t die.
  • TIMOTHY MANGANELLO, BorgWarner: We’re preparing for nothing good until mid-2010… it’s possible it won’t improve by then… the cost structure in the U.S. has to improve. Health-care costs are too high. Tort reform is too difficult. And business taxes are too high.
  • FRED HASSAN, Schering-Plough: The key is inflation. If inflation stays under control and confidence returns, we’ll come back early. If inflation starts to roar in mid-2009 and thereafter, we have a problem. It might start to look like the mid-1970s.

My take: Overall, this doesn’t sound too encouraging for 2009. The only positive notes are that inventories are already pretty low and that President-Elect Obama may be able to bolster consumer confidence.

I’m hopeful that Obama will remain as inspirational and as non-partisan as he appeared to be during his acceptance speech.  I’ve also posted a couple of pieces of advice to the new administration: Appoint a Citizen Experience Officer and Revive “Brand USA.” 

For senior executives, I think the basic decision remains: Are you going to manage your way through the recession or lead your company out of it?

 The bottom line: I’ll keep offering advice on how to manage in a recession.

About Bruce Temkin
I am a customer experience transformist, helping large organizations improve business results by changing how they deal with customers. As part of this focus, I examine strategy, marketing, interaction design, customer service, and leadership practices. I am also a fanatical student of business, so this blog provides an outlet for sharing insights from my ongoing educational journey. Simply put, I am passionate about spotting emerging best practices and helping companies master them. And, as many people know, I love to speak about these topics in almost any forum. My “title” is Managing Partner of the Temkin Group, a customer experience research and consulting firm that helps organizations become more customer-centric. Our goal is simple: accelerate the path to delighting customers. I am also the co-founder and chair of the Customer Experience Professionals Association (CXPA.org), a non-profit organization dedicated to the success of CX professionals.

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