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Company expects 2009 to be flat year at best
By Jim Mackinnon
Beacon Journal business writer
Published on Friday, Nov 21, 2008
Toppen, president and chief executive of Veyance Technologies in Fairlawn, met recently with Lou Gerstner, the retired IBM CEO and chairman widely credited with rescuing the computer and software maker. Toppen remembered asking for, and getting, tips on how to deal with hard times.
''One, assume it's going to be a lot worse than you can ever anticipate,'' Toppen recalled. ''As you can see how it's playing out, he was pretty wise in that respect, because it is much more difficult than anyone would have predicted.''
Toppen spoke at Thursday's Akron Roundtable gathering at Tangier restaurant, where he answered questions about the economy and global financial crisis after a talk that focused on Veyance, a new company that has historic ties to Akron.
Veyance — a name derived from ''convey'' and ''performance'' — is the former Engineered Products division of Goodyear Tire & Rubber Co. that makes rubber hoses and conveyor belts.
Washington, D.C-based private equity firm the Carlyle Group bought the division in 2007 for nearly $1.5 billion, renamed it and added to its extensive portfolio of companies. Engineered Products predates Goodyear's tire-making business.
Toppen told the audience he doesn't know when the economy will turn around.
Veyance is doing well but expects a flat to down year in 2009, he said. ''We don't expect a robust recovery in the U.S., which is a big portion of our business.''
As a result, Veyance will focus on taking care of its customers, reducing costs and conserving cash, he said.
''As you look at the credit crisis, what it really is about is liquidity, or availability of funds in the market,'' Toppen said. That affects consumers' abilities to get car loans, credit cards and mortgages, he said.
For businesses, the credit crisis hurts the ability to borrow money to keep running, he said.
''We're making the assumption that we can't go out and borrow money,'' Toppen said. That means Veyance has to make sure it generates sufficient cash to meet its needs and be self-sufficient, he said.
''We don't know how this is all going to turn out over time,'' he said. ''I think with the stimulus that the government is doing, as the housing market starts to right itself, it will eventually get better. We're not going to assume it's going to improve in the short term.''
Very little is accomplished by the government trying to legislate a fix to business situations, Toppen said. ''I think intentions are good. However, many times you don't get the results you expect.''
He also briefly addressed the current debate on whether the federal government should help struggling Detroit automakers General Motors, Ford and Chrysler.
''At the end of the day, whether it be our business or the auto companies, you have to design, manufacture and sell products that people want to buy, at a competitive cost,'' Toppen said. ''If you don't do that, I don't care how much money you can put in, it's not going to fix the problem. People on Capitol Hill are very sensitive to the automotive industry, and the number of jobs, the millions of jobs, associated with that segment.''
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.
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