September 11 is a date that has been burned into our collective memory. Each of us remembers where we were and what we were doing that morning as the full horror of the terrorist attacks unfolded.

On September 11th, the September issue of Wood & Wood Products, featuring the 12th Annual WOOD 100 Report, was at press. In sharp contrast to the dire economic news that flourished in the popular media, the WOOD 100 Report brimmed with optimism.

Fifty-seven of the WOOD 100 companies were expecting to post a double-digit growth in 2001. Eighty-two percent said they expected 2002 to be their “Best Ever” or at least a “Good” year.

What Impact?
A couple of months after the terrorist attacks and with America knee deep in war, we wondered what impact the events of 9-11 and the resulting blow to the already stumbling economy had had on the 12th Annual WOOD 100 companies. How had their business activity been affected; what were their current sales expectations for 2002; what had they done, if anything to counteract negatives created by the events of 9-11 and after?

Executives of 55 of the WOOD 100 companies responded to our fax survey. Despite the changes in the economy, 27 (49%) said that their business activity “Stayed the Same.” Twenty executives (36%) said they saw a decrease in activity and expected their 2002 sales to be less than originally predicted in the 12th Annual Report.

Surprisingly, eight respondents said that their business activity has increased since 9-11. Companies that predicted an increase were Lexington Manufacturing Inc., Nu-Trend Cabinet Co., Bluegrass Furniture Co. Inc., D & L Custom Interiors, Hoffco Inc. which predicted a 50% increase, SolidTops Inc., and Jasper Seating Co. which said its business is up 5%. (The eighth company asked to remain anonymous).

When asked if they were doing anything to counteract potential negatives created by 9-11, 28 said they were taking special action. Some of the most common remedies included beefing up marketing, laying off employees, decreasing spending, lowering prices, lowering inventories, adding new products and/or business opportunities. Some companies said they were doing a combination of these and other actions.

Increased Marketing
The most consistent answer to the question — What has your company done to counteract any negatives? — was to increase marketing or sales efforts. Twelve of the 28 companies that took action said that they had added some brochures or even more project pictures to each of their brochures, paid for more radio spots, held contests and promotions, stepped up the number of sales’ calls or added more sales staff.

“We have increased our print media, sponsored shows on NPR (National Public Radio) and did an insert in one of our largest market’s newspapers in Rochester, NY,” said Frank Carnovale, CEO of Exhibits and More, “We also placed more ads and issued more press releases on our high-profile projects and increased the number of trade shows we have attended on the East Coast.”

The Liverpool, NY-based Exhibits and More, an exhibit designer and fabricator, saw a decrease in business activity due to the trade show and travel industry slowdown.

“It took three weeks for the effects to hit us because of the work backlog,” said Carnovale. “We have decreased, but already we are starting to see an increase in our volume for orders and in quotations as a result of our increased advertising. I think staying visible to our prospects has shown that we are a strong, viable company.”

Another company that found marketing to be the key to making a turn around is Indian Country Inc., a component manufacturer in Deposit, NY. Indian Country increased its advertising budget, added two more sales people, including a new sales and marketing manager, and revamped its Web site.

“We have felt the opposite of most people who think cutting back is the answer,” explained Gerard Kamp, CEO of Indian Country. “We have done the opposite by actually adding certain things.

“The reason we have stayed successful and business has not decreased through this is because more advertising increased our business, calls for quotes and our customer base. The economic downturn and 9-11 just proved to us that we needed to be even more efficient than before.”

Lower Prices, Reduced Inventories
Several of the WOOD 100 companies mentioned that they were forced to reduce prices in order to generate business. Others said they were switching to just-in-time manufacturing to reduce inventories. Lexington Manufacturing Inc., an architectural millwork component and store fixture manufacturer in Coon Rapids, MN, has been doing both.

“We now offer a lot of different JIT shipment programs,” said Bob Dimke, president of Lexington Manufacturing Inc. “Companies we supplied to were scared to carry inventories so they ran them down; we reacted by keeping them supplied with parts JIT. Now we have a staff that works on Fridays as well whereas before we had a Monday through Thursday work week.

“We have also seen price pressure because profits are harder to come by in our region,” said Dimke. “For instance, some store fixture manufacturers have been supplementing their business with architectural millwork components, which is what we mainly produce. This has meant more competition, which leads to price reductions.”

The company saw business decrease in October and November but is seeing a comeback.

“We have been experiencing a slower start to the year than originally expected, but before this year we had averaged 30% growth,” said Dimke. “We obviously do not anticipate 30% growth for 2002, but we will be growing because of new projects and our cost-effective attitude.”

Layoffs Become Necessary
For at least four of the responding companies a business curtailment made it necessary to lay off some employees.

Since making these cuts, EMI Construction, which laid off one-third of its 75-man workforce (see sidebar at left) Pearson Millwork, Cherry Valley Woods and Moralmar Kitchen Cabinents have looked for other ways to ensure they will not have to lay off more staff.

Even though Cherry Valley Woods , a contract furniture and custom millwork company in Palmer Lake, CO, laid off only one person out of its eight employees it was just as difficult for them as the other companies.

“Hospitality is one of our lines of business so with the decrease in travel, naturally, our business is less,” explained Danielle Grant, sales manager of Cherry Valley Woods. “We just do not have as much work lined up because some of our projects cancelled or are on hold, so there was not enough work for that eighth person.”

The company also changed its focus, much as it did when it switched from institutional furniture to the hospitality market in early 2001.

“We have been keeping our sales heavy on residential and commercial and then lastly hospitality,” says Grant. “This strategy will help keep us going because there are still plenty of office buildings and homes going up.”

New Products Equal Success
Five companies focused on replacing products that were not performing well or introducing new product offerings. They looked at new business opportunities by adding new products or asking accounts and customers what products they wanted to see their companies develop.

“We manufacture computer desks and activity tables for elementary schools,” says Funblock Inc. President Michael Crane, “but we also do home furniture for kids, which is the market for us that is suffering right now.

“We have contacted our dealers which has led to us producing a different line of modular coat lockers and other sizes of classroom storage and shelving units. We also do more work for other cabinet shops on our CNC equipment,” says Crane.

Like most of the 54 other respondents to our survey, Funblock remains optimistic for the company and for its future success.

“9-11 and the downturn in the economy has forced us, like any other company, to be more aggressive,” said Crane. “With the invention of our new products, some increased marketing and the latest CNC equipment, we will still be profitable for 2002.”

Other Steps
Another solution came from John Wiley, president of Elipticon Wood Products Inc. He said the company thoroughly reexamined its service and quality after the attacks.

“We met with our employees to evaluate the possible implications of 9-11,” said Wiley. “We pledged our best efforts to continuing good service and quality products and emphasized that their best efforts were also more critical now than ever before.”

American Regional Woodworks owner Michael Beasley said his company is simply trying to “sell more for less.” He also said, “We have prepared our employees to work longer hours in order to make more sales and get more projects completed.”

Kretz Lumber Co. of Antigo, WI, drew upon the strength of patriotism to forge ahead.

“We got ‘United We Stand’ stickers for all of our employees’ hard hats and other safety gear,” said Dan Kretz, president of Kretz Lumber. “We handed out the same stickers to the attendees at our annual ‘Forestry Field Day’ and collected Red Cross donations.

“We also held a company-wide meeting to improve our focus to a positive one and to talk about how to change things that we have control over.”