While the Great Recession officially ended sometime in the middle of 2009, the downturn has left the U.S. economy in a beleaguered state, with fewer people employed, the U.S. consumer-driven economy hitting reverse, and private and public debt soaring.
Many Hispanic-owned companies in the United States have experienced more than their fair share of the many challenges. For them, 2009 was a historic year, and not in a good way.
"It was brutal, no question about it," Tony Trujillo, CEO of Holman's Inc., a New Mexico-based retailer selling precision surveying and computer products, told Hispanic Business magazine. "I've been through at least four of these economic downturns in my four decades in the business, and this is the worst."
The combined revenue for the nation's 500 leading Hispanic-owned firms plummeted in 2009 by an astonishing 16.6 percent, to $30.1 billion -- the largest one-year drop in the 28-year history of the list, as indicated by the annual survey by HispanTelligence, the research arm of Hispanic Business magazine.
The extensive drop in 2009 is the second consecutive tough year for the 500 directory. In 2008, for the first time in a decade, not every company on the index posted revenues of at least $5 million: seven companies fell short of the mark. In 2009, that number grew to 33, according to HispanTelligence.
To make do with less, companies have made teeth-grinding reductions in headcount.
The number of employees working for HB 500 firms fell in 2009 by 8.7 percent, to 120,363, from 131,894 in 2008.In 2006, the figure stood at 147,465 people.
This dramatic evaporation of jobs is a reflection of the nation's overall unemployment rate, which rose from 7.6 percent in January of 2009 to 10 percent by year's end. Among Hispanics, the jobless rate had reached 12.9 percent.
Meanwhile, a similar fate befell the Fortune 500, whose sales from the year before dropped by 8.7 percent, to $9.8 trillion, and whose employee base shrank by 3.2 percent, or by 821,000 jobs -- the steepest loss in the history of the list.
Still, Fortune 500 profits last year skyrocketed by 335 percent -- the second biggest jump in the 56-year history of the list -- mostly due to the large-scale layoffs. .
Interestingly, profits on the HispanicBusiness 500 remains mostly unchanged from last year, though they were slightly down. In this year's survey, 5.6 percent of the companies surveyed reported profits of at least 16 percent, down from 7.6 percent last year. Another 6 percent reported a loss, up from 4.4 percent last year. But in both years, roughly a third of the companies declined to respond to that portion of the survey.
For many Hispanic-owned companies in the United States, 2009 was a test of survival, and not all of them passed.
Among the casualties of 2009 were formerly strong firms like California-based Gonzales Automotive, No. 61 on last year's list with 150 employees. Also out of business is Rody Truck Center, a Miami used truck and equipment dealership, which ranked 318 on the list and employed 20 people.
The year was also historic for the reshuffling in the rankings of the HispanicBusiness 500.
For the first time in memory, a majority of the top-10 companies -- six, to be exact -- are new to top of the list rankings.
Gone from the top-10 club are former mainstays such as the Related Group of Florida, a real-estate developer, and Ancira Enterprises, a San Antonio automotive sales and services company.
Newcomers to the Top10 include Greenway Ford (No. 8), a Florida automotive dealership that presciently decided several years ago to open a handful of automotive dealerships in China.
"I have an associate who is Chinese-American," CEO Frank Rodriguez told Hispanic Business magazine. "We'd heard about things going on there and decided to take a look six years ago. The rest is history."
Also joining the ranks of top 10 is Ruiz Foods (No. 7), a California-based maker of frozen Mexican food, demonstrating perhaps, how penny-pinching consumers last year were less likely to eat out and more likely to stock up on frozen dinners.
The other newcomers are Crossland Construction (No. 5) of Kansas, Quirch Foods (No. 6) of Miami, Group O (No. 9) of Illinois and Pan-American Life Insurance (No. 10) of New Orleans.
Most notable, however, was the changing of the guard at the top. Brightstar, the global telecom wholesaler that had dominated the No. 1 spot for three consecutive years, was unseated in 2009 by Molina Healthcare, which, like other companies in the booming health care industry, has been a veritable juggernaut of growth showing no signs of slowing down anytime soon.
With its revenues skyrocketing to $3.7 billion from $3.1 billion in a single year, Molina actually benefited from the rising numbers of the unemployed, as it serves primarily low-income people covered by Medicaid.
But CEO J. Mario Molina, MD -- son of the late founder David C. Molina, MD -- said the company's culture of fiscal conservatism has also played a significant role.
"We are not flying around in private jets or throwing lavish parties, though I think we provide competitive benefits and have been very successful attracting talented people," Dr. Molina told Hispanic Business magazine. "We're dealing with money that comes from the taxpayers, so we are very, very careful about those things."
Molina Healthcare is poised to join the ranks of the Fortune 500, whose bottom-end companies report revenues around $4.1 billion.
Brightstar, meanwhile, saw its revenues drop 22 percent last year, to $2.7 billion from $3.5 billion. But while Brightstar was knocked off its the top 500 perch this year, the company still reported a profitable financial performance for the year.
"Because we responded quickly to the contraction and took proactive steps to reduce costs, we were actually more profitable in 2009 than in 2008," Marcelo Claure, the company's CEO, told Hispanic Business magazine. "Overall, 2009 was a very good year for Brightstar."
On a broader scale, very few sectors thrived. In all, seven of the nine sectors saw a decrease in revenue from the year before. The exceptions were finance, which broke even, and service, whose 7.1 percent boost was led by Molina Healthcare.
Hardest hit was automotive, down a whopping 57.2 percent, followed by energy, down half; and transportation, down a third.
The year's directory also extended a developing trend: More and more companies are posting less revenue from the year before. This year, it was a record-high 238. That's appreciably higher than last year's already disappointing number of 182 companies. In 2007, the number was 129; in 2005, it was a mere 60.
Although the energy sector suffered, the depth of its drop could be a little misleading.
That is to say, energy's performance in 2008 was unusually strong, due to a gravity-defying spike in oil prices during the first half of the year.
Mirroring a major movement on the Fortune 500 list, in which Exxon Mobil temporarily dethroned Wal-Mart as the No. 1 company, Hispanic-owned energy companies in 2008 enjoyed stunning success.
That year, energy was the only industry on the 500 in which all of the top 10 companies in the energy sector posted higher revenues than the year before.
In 2009, the opposite occurred: energy was the only industry in which each of the top-10 firms posted negative growth.
Much like last year, Florida boasted the highest number of companies on the list, with 119, followed by California, with 95.
Until about four years ago, California had the highest number of companies. But while the state has lost Hispanic-owned firms over the years, its overall revenue continues to rise, from $5.9 billion in 2007 to $6.3 billion in 2008 to $6.6 billion last year.
Florida, meanwhile, saw its revenues tumble in 2009, to $9.7 billion from $12.2 billion the year before.
Arizona continues to climb the list, rising to 18 companies from 16 a year ago and 12 companies two years ago. However, it remains to be seen how that state's controversial new immigration law will affect the Hispanic businesses there.
Most Popular Stories
- #myNYPD Twitter Campaign Backfires for NYPD
- Pols Back Away From Bundy After Racist Statements
- First-time Jobless Claims Jump by 24,000
- Putin Says Internet Is CIA Plot
- Durable Goods Orders Rose More Than Expected
- Freshman Senators Speak Out on Foreign Policy
- Nasdaq OMX Profits Soar in Q1
- John Oliver Set for 'Last Week Tonight'
- Justin Bieber's War Shrine Pic Causes Flap
- Sina Loses License Over Porn