editor's comment, The

Electrical Apparatus, Jun 2008 by Barks, Horace B

Recession resistant? Our industry says yes

The cover photographs our editors selected for the backdrop of the Barks Publications booth at the EASA Show in Dallas this month illustrate two ways in which facilities in our industry are thriving in an economic downturn.

One, the Wood Group Generator Services of Farmington, N.M., represents a company with traditional "motor shop" roots that became a part of an international energy services firm headquartered in Scotland and operating in 46 countries. Expanding its reach has taken the company's growth through motors to generators and back to motors as its customer base has expanded. You will want to read the complete article beginning on Page 33 of this issue.

The other company, Hupp Electric Motors of Cedar Rapids, Iowa, featured in the April issue of Electrical Apparatus, has grown by offering its customers its commitment to quality work and by expanding its area of service from about a 50-mile radius to as far distant as Alaska. Founded in 1912, the company has been steered by the Hupp family through many economic cycles, and they have considered customer service a large part of the answer to their success. If you missed this issue, let us know.

Hedging economic conditions: challenge versus opportunity

As Contributing Editor William Wiersema, CPA, writes this month, service companies relying on manufacturing companies do have some coping to do during tough times, and he warns that desperate cost-cutting is not the solution. It takes planning and strategy, he writes, and what applies today is different than during earlier downturns.

U.S. manufacturing no longer drives the economy, but export markets are up, and Bill suggests that electrical apparatus service companies should position themselves beyond local market conditions and reconsider their concentrations with particular customers and industries. Service shops that have overspecialized in markets, such as automotive or energy, need to look further. Many have already diversified.

We are sure that our readers will find "Business strategies for tough times," Page 46, one of the most helpful articles that have appeared in our monthly "Managing Accounting" feature.

Workers' compensation: claims down, fraud up

Not related to ups and downs in the economy, workers' compensation insurance goes back to 1911, when Wisconsin became the first state to institute a statutory system. Other states followed in short order, and the federal government created a separate system for its workforce.

Our "Safety and Health" editor, Richard Elsberry, devotes his column this month to workmens' comp and points out that, despite media reports that would indicate the opposite, employers are more likely than employees to misuse the system. Failure to insure employees is the most common form of employer fraud; employee fraud generally involves exaggerated or non-existent injuries.

The article, page 48, ends with several ways that employers can minimize the expense of this necessary insurance. We recommend it highly.

Horace B. Barks