With the economy stumbling through a deep recession, America's companies are undergoing radical and unprecedented change. Major industries are shedding employees at an alarming rate just to stay alive. Others, such as the bastions of the banking and auto industries, have sought and received federal bailouts worth billions of taxpayer dollars. Many companies have simply folded, casualties of the increasingly competitive marketplace. With the economy in turmoil, CEOs must possess a sense of urgency, a mind for innovation and a curiosity for taking a risk, as new business models emerge.
In light of these new economic frontiers, Hispanic Business magazine interviewed CEOs about their plans to weather the recession and remain economically viable in 2009. In doing so, we took a look at key business sectors with one major question in mind: When will the economy recover? No one knows for sure, but the executives agree that the turnaround might be quicker than we think.
With the number of private-sector jobs shriveling, some companies are increasingly turning to government contracts to boost their businesses and get them through these rough economic times.
Flexibility Key To Survival
"While it will be challenging, this is an opportunity," said Randy Velarde, president and founder of the international petrochemical firm The Plaza Group. "It's important to pay close attention to what customers want and need, and take care in specifically meeting those needs. If we continue to treat our customers well through this recession, we will keep them now as customers after the economy recovers, and be more successful in the future."
In times of crisis, the CEOs agree that one key way to stay relevant is to adapt and diversify. Being flexible is essential to survival in the corporate world.
In the construction industry, builders are trying to cope with the sluggish private development market. So they have begun to focus on government contracts as a stable source of revenue.
"Right now, private construction is slow and environmental construction has slowed down considerably," said Gabino Cuevas, CEO of Florida-based engineering company Cherokee Enterprises Inc. The company has focused on landing contracts with the federal government and now has jobs in Maryland, Georgia, and South Carolina.
"Developers are hurting because there is no new residential construction going on at all, but we do more than that," Mr. Cuevas said.
He said he hopes that the Obama administration's talk of funding infrastructure and environmental projects might boost the industry.
"Green buildings and sustainability are all people are talking about, and it's having a huge impact on the industry," Mr. Cuevas said. "Our niche market is fuel storage, and with the push for alternative fuels, we want to stay on top of that trend."
Health Care Challenges
Standard wisdom says health care is one commodity the consumer can't forgo. But the recession can disrupt a sector in a roundabout fashion. One problem for health care firms, said Rainier Gonzalez, CEO of Miami-based Pacer Health Corp., is that as unemployment mounts, the number of those without insurance increases.
The uninsured patient pays out of pocket for expenses and that pushes up the rate of payment defaults. Profit margins at medical companies get squeezed.
