It was 1929. Twelve million people were out of work; 12,000 people became unemployed every day; 20,000 companies had gone bankrupt; 1,616 banks went bankrupt and 23,000 people committed suicide in one year. We're not seeing a lot of people jumping out the window on the 6 o'clock news every night this year, but the feeling of mass panic is certainly out there, as evidenced by mass selling of stocks in the days following S&P's downgrade of the U.S. credit rating.
By the time this issue gets printed and mailed, a lot may have changed. The market might have recovered and returned to pre-downgrade levels. Or more countries, much less companies, might come close to defaulting on their massive debts. The resurgence of optimism during the first quarter of 2011 might be a distant memory.
So many things are changing so fast, so I won't at this point predict the direction. I'm sure you're smart enough not to buy, sell or hold on to stocks based on my column. But my gut feeling is this is not a time to panic, much less to jump out the window.
The economic issues might seem very dire and the problems out there in the rental marketplace might be daunting, especially when the country's inability to fix its economy and deal with the debt challenge is so disheartening. But those of you who are still involved in the rental industry just came through one of the most challenging recessions in history, possibly the toughest in our lifetime, and you're still here to tell about it. You've been through a lot and survived, so I trust you'll get through this one.
This debt crisis isn't going away just because they arrived at a deal in Washington. The issue will be around for a long time, as will, most likely, economic and political volatility and the price of the stocks you own. Might as well get used to it.
One of the keys to survival for many that I talked to these past few years was the refusal to panic. When the phones weren't ringing, when the phones weren't being answered on the other end, when customers had no work, you found a way to readjust your business and adapt to changing times.
As our cover story on the credit markets point out, more than anything you need to show a strong, stable balance sheet, you need to keep practicing those business essentials that got you there. If one of the keys to your survival was enhanced efficiency, as I'm sure you know, this is no time to stop looking for ways to improve.
It's a crazy thought but when I've read about or seen movie images about panicked business executives or brokers jumping out the window and plunging to their deaths from the high stories of buildings, I sometimes imagined that while on their way down something occurred to them to change their mind. Maybe a solution occurred to them to a problem or the thought of a loved one came to them and they changed their mind thinking, “No, I don't want to die.” I don't think too many of you are contemplating such a thing, but, as a metaphor, I repeat my message of not panicking. Look for the fundamentals that are working and keep building on them. Adjust and change and don't give up.
Pat Olney once said he gets nervous if he's in one country longer than a week. The Canadian-born Olney, for those who don't recognize the name, is the recently named president of Volvo Construction Equipment, and if you take a look at what Volvo CE is doing around the world, you'll understand why the man doesn't sit still for long.
To start, Volvo has implemented or will be implementing more than SEK 2 billion (more than U.S. $315 million) of investment in the “BRIC” markets. The company is investing $100 million into its new U.S. headquarters in Shippensburg, Pa., where it is going to start rolling out wheel loaders, excavators and articulated haulers to complement the existing range of road machinery products already being produced there. Volvo will also add a customer demonstration center and training center there.
Check out our story on my visit to Volvo in Sweden in late May where Volvo rolled out dozens of new products including a number of world premieres.
But don't ask me where Olney is. By the time I find out the answer, he'll already have moved on.
