Labor Department statistics for U.S. unemployment for the last two months of 2009 were grim, with an unemployment rate of 10 percent and growing; a tally that did not include another 7 percent of workers who have stopped searching for work or who work part-time because full-time work is unavailable. The economic outlook for business improved by late 2009/early 2010, with gross domestic product growing at over 5 percent, yet companies are reluctant to hire new workers.
NPCA’s technical consultant Sue McCraven invited precast producers Joe Floyd, president and chief operations officer of Joe Floyd & Sons Inc. Precast and Concrete Products, Prineville, Ore., and Billy Jackson, precast division manager, Southern Concrete Materials Inc., Fletcher, N.C., to share their thoughts on jobs and employment conditions in 2010. For recently published “Perspective” articles on the economy and the industry’s response, visit NPCA’s website at www.precast.org.
Q. As a result of the recession, have you been forced to downsize your staff?
A. Floyd: Not as yet, but it has been a struggle at times to keep them all busy. We have such a great crew that it has been a management decision to absorb payroll during short slow periods rather than risk losing dedicated, trained personnel. It’s hard to be optimistic given the direction government is taking our country, but at this point we look at the absorbed payroll as an investment with an eye to better times.
A. Jackson: Yes. Since January 2009 through January 2010, the labor force in the precast division of Southern Concrete Materials has downsized some 40 percent. The reduction in staff has not been due to layoffs but rather employees leaving for work in other industries. These personnel have not been replaced. The remaining employees have been able to maintain the manufacturing needs as business is down by approximately 50 percent at this writing.
Q. If you have had to downsize because of the recession, have you been able to find new production efficiencies to compensate?
A. Jackson: We have successfully been able to use self-consolidating concrete in all of our manufactured precast products. In addition, structural fiber mesh is being used in some of our precast products instead of wire mesh; this modification allows for a reduction in manufacturing costs and labor needs. In an effort to think outside the box, we are doing more specialty and complex precast items than have been produced in the past.
Q. Has the tighter credit market caused you to lose business or keep you from expanding your business? Has it affected you in other ways?
A. Floyd: Yes. Given the uncertainty of the national economy, we are being ultraconservative in our spending decisions and scrutinizing applications for credit from potential customers much more keenly than in the past. Also it has forced us to go “outside the box” to look for projects that we can quote.
A. Jackson: At this time, we have not been forced to reduce the credit limit of our steadfast customers; however, we have had to decrease the time allowed (from 120 to 90 days) before impeding their credit purchases. Additionally, we have had to find new and innovative ways to preserve our business – for example, bidding on projects as far away as 250 miles – that we have not entertained in years past.
Q. Are you planning to hire more people this year if the economy improves?
A. Floyd: Yes. We have definite targets and goals – a “wish list” – for 2010 that will require the hiring of five to seven new employees. All we need is for the government to stop its frivolous, unsustainable, porky practices and get out of our way so we can do our part to put this economy back on track.
A. Jackson: Yes, if the economy improves, it will necessitate the hiring of increased personnel. For this to happen, it is imperative for the financial institutions to be willing to lend money to those in the construction industry. With this industry in particular, the inability to borrow money creates a domino effect that has to end in order to see a rebound in the economy.
Joe Floyd is president and chief operations officer of Joe Floyd and Sons Inc. Precast and Concrete Products, Prineville, Ore. He has 30 years of experience in the concrete construction, excavating and precast concrete industry.
Billy Jackson has been with Southern Concrete Materials Inc., Fletcher, N.C., for 27 years. He started as a mixer driver, moved up to batching/dispatching, and then started precasting about 15 years ago. He now manages the company’s precast division and manufactures septic tanks as well as sewer, stormwater and specialty precast products.