Now is the Time for Opportunity

Unless you’ve been living under a rock, you know the economy is tough and has been for months. Every week, I read about manufacturers and retailers shuttering their doors and filing for bankruptcy, and large financial institutions or the government taking over banks and Wall Street firms. And a year or so ago, who would have thought the Big Three automakers would be in their current dilemma? Even foreign automakers are having troubles.

As automakers dramatically cut production, the shops supporting them are also forced to cut back. This trickle-down effect will likely cause many shops to go under. On the brighter side, the downturn will also help other shops to succeed. How? By giving them the opportunity to diversify into healthy markets, such as wind and solar energy. Many more industries are not hurting, but thriving.

How many shops focus on one industry? I’ll bet the vast majority of small to medium-size shops specialize in one industry or are dedicated to one customer. Many shops started when a particular industry or customer company was thriving, but what happens when that industry or customer backslides? For example, oil prices quadrupled from 1973 to 1974. As a result, the U.S. started drilling for oil like crazy, and machine shops popped up all over to support the demand, only to fold later in the decade after oil prices dropped and their customers disappeared.

By doing something now, you can probably avert disaster. Many shops are adding new processes so they can attract new customers. Does your shop primarily do turning? Now might be the best time to invest in a couple of mills and train your best machinists and engineers to use them. Become an expert at milling and seek customers that require it. You did it with lathes, didn’t you? It’s never too late. If you have to, hire an expert milling machinist or a sharp milling engineer. You can even use them as consultants, if need be. Take a job or two and get your feet wet.