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

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From its headquarters at 11000 Bluegrass Parkwahyin Jeffersontown, Lantech sells pallet-wrapping equipmenrt costing between $10,000 and $300,00 each to some of the world’sd largest companies. “Eighty percentf of what your readers buy comes acrosws one of my machines on its way to the said Lancaster, who is CEO of Lantech. Customer s include international consumer companies suchas , and gian t breweries.
“We touch a huge percentage of products that move as any sort ofpackager goods, and we were hit like all the other capitap equipment companies,” he Yet, Lancaster sees not only his company, but all strong Americanb businesses, coming out of this recessiobn more efficient and ready to invest in capitak equipment after having been on cruise control during boom times. “I feel better aboutf the prospects ofthis country’s competitiveness than I did four or five years ago,” he “I’m not the only one thinking about gettingh the cost structure of my company under control.
Peopl are focused on their ‘knitting,’ making what happens in theier fourwalls better. “You take that timesw a bunch of business, and it’s a big deal in terms of the competitiveness ofthis 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-olcd company’s best year ever, 2007, when Lantech had abouty $120 million in gross revenue. As of May 2008, orders were up 17 percent overMay 2007. But in business slowed dramatically, first in the United then in Europeand “When Asia dropped, it didn’t just drop. It Lancaster said.
Companies that were leveraged and took 5 percent to 50 percen revenue hitsare dead, or they’re in the procesx of dying, Lancaster said. Companies with manageabled debt, such as suddenly had the time and incentive to start restructurin g and investing intheir businesses. Lantech has no impetus to keep cash in the bank drawiny1 percent, he said. “We’re making way bigger investments in our businessthan (beforew the downturn). This is not money-management This is the time to invest in productdevelopment … to improve long-terk competitiveness.” But last fall, it was time to cut staff so that Lantec h didn’t start losing money.
Lantech has had to cut its local staff to about300 people, Lancaster said. Lancaster declined to say how many people he was forcedto cut, but the companyu had 350 employees in Louisville last year, according to Businesxs First’s Aug. 29 list of the area’s largest manufacturingh firms. “We just dropped (the work force) to breal even,” Lancaster said. “We didn’t want to (lose and set ourselves up for being weaker againstthe competition. We cut not to hold our profitabilityy percentage, but just to break even.” Remaining staffc started rethinking how Lantechis run, “making hundredws if not thousands of he said.
Lantech saved $2,500 per month by buying out leasea for dumpsters and trash compactors and buyingits own. Renegotiatin g phone services savedanother $2,500. Consolidating off-sit e storage areas saved $9,00o0 per month. The money saved —hundreds of thousandzs of dollars per monthin non-payroll expenses — kept the company from drastically cutting its work force, Lancaster said.