A real businessman’s story as “the canary in the coalmine”
By SeattleMoss on February 11, 2009 at 7:10 PM in American Consumers, Canada, Economic Stimulus, Economy, stimulus tax package
SPECIAL NOTICE: Seattle Moss will be a guest TONIGHT during Jay’s radio show, “No Topic Taboo, Everything Else With Jay,” 9:00 p.m. to 10:00 p.m. This is must-listen radio! I’ve talked to Seattle Moss, and he’s as charming and engaging on the phone as he is in print. Jay’s will be a great show! – Susan
Many of you know me as Seattle Moss, a manufacturer of industrial poly products such as bags, covers, liners and sheeting crucial to all companies that are processing, manufacturing, or shipping any type of finished goods to the market place.
I have been called the canary in the coal mine. Without my products, there are no products from anyone to anywhere. So I would like to take a moment to give you all a quick snapshot of where business stands in the Northwest United States and Canada.
For the past five years, I have managed to grow my business every year 20% on average and, although we are relatively small compared to some companies, this has meant increasing revenues from $10-20 million. We have, during this period, been able to increase our labor force from just 20 people to more than 80 in the busy season.
That all changed this past year.
I first noticed a fall-off early in 2008 when our long-established sales reps in Oregon and Seattle started missing their targets. This was offset by new business that I brought in from Canada so there was no immediate cause for alarm. In fact I didn’t know the full extent of the recession until one fateful day in Oct when Stretch Pelosi told the world that we were in a Great depression and there was nothing great about it…
During the summer I warned everybody on this blog that we were headed for the Obama collapse because I believe in self-fulfilling prophesies.
Namely, if you talk enough about class warfare, raising taxes on the wealthy, capital gains taxes, carbon taxes and punishing businesses, then what you get is a collapse of the economy. Yes, the financial and the sub-prime also had a lot to do with it, but Obama and his minions effectively spooked the market out of $30 trillion in equities, thus causing business to come to a complete halt.
Since October my business which has never declined has seen the bottom fall out. We are now 40% off our totals from last year and things seem to be getting even worse.
I supply all the lumber business which has seen a precipitous drop with mills closing everywhere. Gypsum board, roofing, windows, cement and all supporting industries and suppliers have all but ceased to produce.
What I’m also finding is usually reliable industries like fishing are unable to get the necessary financing to take their boats out this spring. They have told me that their boats have to just sit in the port not going to Alaska to harvest the fish.
What a loss for me! The biggest problem for me has been the dollar. Last year Canada bailed me out. Now that business is drying up because everything costs 30% more for the Canadians.They are just starting to feel the collapse and business has dried up considerably. Not too many places to escape to find additional work. we have laid off 60% of our work force and have cut the days for others.
As a result of this collapse I have been forced to look outside the box once again.
Those that do have the capital are buying huge blocks of product from me at basement prices which will allow them to resell once hyper inflation kicks in later in this year.
So where I stand right now is that I’m about ready to have my biggest month ever except the price will be at a deflationary levels which has cut profit margins considerably, but does have the benefit of keeping people working and not adding to the layoffs.
My company is in better shape than others in my industry. We will survive through this crisis but there are days and you have seen my posts where I haven’t been able to see the light at the end of tunnel and it gives me a big lump in my throat.
But wait a minute…..Enough is Enough!!!
I refuse to be a victim of a crisis other people have created. I started to think what is stopping people from buying at the very best moment to buy. I went into full battle mode, brainstorming and thinking of any industry that wouldn’t be affected by this collapse.
Then it came to me … Apples, Pears and Berries. These industries are affected only by the weather and not the economic conditions facing other aspects of the economy. I went to work and called every distributor and grower in the industry and this is what I told them on the phone.
“This is the trough..The darkest moment before the dawn…When fear and uncertainty grips the nation…When resin prices are at there lowest, demand has dried up and we need to keep employees on the line for the sake of their families.
The moment has come.. The very best time to buy!!!”
Because the stimulus package will be signed dollars will be printed,confidence will emerge and hyper inflation will be the next step in this process.”
Saying these words to my customers finally got them to buy!….All of them!
Now my extruders are filled with orders and the workers are smiling because there won’t be additional layoffs..I may have had to cut my margins but the company will keep going and I will find additional deals out there.
Checked with my Oracle today:
Deflation is almost over…I have sold all my cheap plastics within the last two days like a stampede, with folks wanting special terms. Now I’m looking at more expensive resins and higher prices despite the low demand. It’s hard to tell my future customers that we are having price increases when there is so little demand.
Spring will bring warmth and hyper-inflation which will be the beginning of the end of our buying power as a nation. The collapse of the American dollar will not be far behind. This may help my Canadian business but hurt everywhere else.
I want to thank everybody at No Quarter for their support. We are all in this together
Seattle Moss
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