Even with recession-tinged clouds lurking overhead, plastics processors are more optimistic heading into 2002 than they were at the same time a year ago, according to a recent Plastics News poll.
Sixty percent of respondents said they have very favorable or somewhat favorable attitudes toward the economy in 2002. That's a leap of 16 percentage points when compared to answers to the same question last year.
The number of processors expecting a very favorable economy stayed in the 9-10 percent range, but the number expecting a somewhat favorable financial picture jumped from less than 35 percent to just over half.
Plastics News faxed the unscientific poll to about 1,200 processors nationwide in early December, and received responses from 145, or 12 percent.
The uplifting economic mind-set carries over into processors' back yards as well. Forty-nine percent of respondents said they expect their firms to be more profitable in 2002; that number is virtually unchanged from last year.
On the jobs front, it looks as if processors believe most of the damage already has been done. About a quarter of those responding commented that they have laid off workers. But, only 14.5 percent say they expect job cuts in 2002.
Customer growth or cutbacks topped the list of external factors affecting processors in 2002, with 82 percent of respondents listing that topic. Raw material pricing was a distant second at 46 percent, while interest rates checked in third at 36 percent.
Although most processors experienced sales drops in 2001, some were able to buck the downward trend with a vengeance. Infinity Plastics LLC, an injection molder in Ventura, Calif., saw its sales climb almost 30 percent to $7.6 million in 2001. Infinity Chief Executive Officer John Vanbosch expects that trend to continue into 2002 for his firm, which primarily molds diagnostic devices and pharmaceutical items for the medical market.
``It comes down to good customer service and doing what you say you can do,'' Vanbosch said. ``And we've gotten most of our growth from existing customers.''
Vanbosch added that he believes his firm's wide range of services - from part design to prototyping, molding, construction and assembly - has helped to fuel its growth.
Infinity also has avoided the trap of going into ``a protectionist mode'' at the first hint of a recession, Vanbosch said. His firm also hopes to take advantage of low interest rates in 2002 and already has tapped into the buyer's market that exists for plastics machinery, recently buying three new injection presses when it had intended to buy only one.
``I couldn't turn away at the prices the machinery firm was offering,'' he said.
Dried-up demand - and the unpredictability of the demand that remains - took a heavier toll at such processors as Paradigm Plastics Inc., a custom injection molder in Three Oaks, Mich., and could continue to do so in the next 12 months.
``Customers aren't placing blanket orders the way they used to,'' Paradigm President Paul German said. ``They're spot-buying in very low quantities.
``We used to have an account that would order 400,000 units every two weeks. Now they'll take a smaller order and we won't hear from them for four months.''
As a result, German, a 30-year plastics veteran who launched Paradigm in 1998, has cut his work force from 36 to 12. He expected his 2001 sales total to reach only $500,000 - down from $1.3 million in 2000.
Almost 20 percent of respondents cited foreign trade as having a major impact on their businesses in 2002. Perhaps the strongest case came from Wilks Precision Instrument Co. Inc., a custom injection molder in Union Bridge, Md.
President Thomas Wilks said Asian competition has hurt his business to such an extent that he is changing the focus away from molding and instead will move into remanufacturing laser toner cartridges.
``There's no way to compete when Chinese companies can take your business away for 30 cents on the dollar,'' said Wilks, who has reduced his staff from 48 to seven in the past year. ``And it's just going to get worse.''
Other respondents cited trade with Mexico and South America as hurting their business performance. At Paradigm, a key customer recently relocated his molding needs to Mexico.
``Offshore trade isn't the only problem, but it magnifies things,'' Paradigm's German said. ``When demand comes back, it's not necessarily going to be in the U.S.''
On the home front, even small investments could pay off in 2002. At injection molder Anderson Technologies in Grand Haven, Mich., President Glenn Anderson awarded employees a $100 Christmas bonus even though the firm's sales are down 30 percent and its work force has been reduced by 15 percent. Anderson distributed the bonuses while driving through his plant clad in a Santa Claus suit.
``In a down economy, you have to do bold things and inspire employees,'' Anderson said. ``My employees weren't expecting bonuses, but I felt it was something I had to do.''
Anderson's firm also isn't cutting back on technology improvement projects it had been working on before the economy soured.
``If you're working through a recession, you have to go out and be aggressive,'' he said. ``You can't put things on the back burner.''