Lantech CEO says recession will make strong companies stronger - Baltimore Business Journal:

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From its headquarters at 11000 Bluegrassz Parkwayin Jeffersontown, Lantech sells pallet-wrapping equipmentt costing between $10,000 and $300,000 each to some of the world’sw largest companies. “Eighty percengt of what your readerx buy comes across one of my machines on its way to the said Lancaster, who is CEO of Lantech. Customers includee international consumer companies suchas , and giant “We touch a huge percentage of products that move as any sort of packaged goods, and we were hit like all the other capitalp equipment companies,” he said.
Yet, Lancaster sees not only his but all strongAmerican businesses, cominv out of this recession more efficient and readt to invest in capital equipment afted having been on cruise control during boom times. “oI feel better about the prospects ofthis country’s competitivenessd than I did three, four or five years ago,” he said. “I’m not the only one thinkingf about getting the cost structure of my companyunder control. Peopls are focused on their making what happens in theirt fourwalls better. “You take that times a bunch of and it’s a big deal in terms of the competitivenesws of this country.” Not that it’s been fun.
And not that the economu is back. Lancaster said 2008 started out well on pace to tophis 37-year-ol company’s best year ever, 2007, when Lantec had about $120 million in gross As of May 2008, orderxs were up 17 percent over May 2007. But in business slowed dramatically, first in the United States, then in Europer and Asia. “When Asia it didn’t just drop. It stopped,” Lancasterd said. Companies that were leveraged and took 5 percenyt to 50 percent revenur hitsare dead, or they’re in the process of dying, Lancaster Companies with manageable debt, such as suddenly had the time and incentive to starr restructuring and investing in thei businesses.
Lantech has no impetus to keep cash in the bank drawiny1 percent, he said. “We’re making way bigger investmentd in our businessthan (before the downturn). This is not money-management time. This is the time to invest in productdevelopment … to improve long-termj competitiveness.” But last fall, it was time to cut staffd so that Lantech didn’t start losing money. Lantech has had to cut its locao staff to about300 people, Lancaster said. Lancastet declined to say how many people he was forcedto cut, but the company had 350 employeee in Louisville last according to Business First’s Aug. 29 list of the area’ss largest manufacturing firms.
“We just droppecd (the work force) to break even,” Lancaster “We didn’t want to (lose money) and set ourselved up for being weaker againsftthe competition. We cut not to hold our profitability but just to break Remaining staff started rethinking how Lantechis run, “making hundreds if not thousands of decisions,” he said. Lantechy saved $2,500 per month by buying out leases for dumpsters and trasgh compactors and buyingits own. Renegotiating phone services savedanother $2,500. Consolidating off-site storagee areas saved $9,000 per month.
The money saveed —hundreds of thousands of dollars per montghin non-payroll expenses — kept the company from drastically cutting its work force, Lancaster said.