Be prepared Early planning, constant monitoring help lessen effects from potential recession
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n mid-2008, Owatonna-based General Equipment Co. was going gangbusters. The construction equipment maker had a 12-week lead time on projects and life looked good. President Dennis Von Ruden remembers going into a staff meeting around that time and sharing his plans to downsize the company. “They looked at me like I was crazy,” he says. But Von Ruden was monitoring economic indicators that indicated a tremendous economic crash was coming. He knew his industry’s ties to housing, roads and home improvement projects meant it would be among the first to feel the effects. And he realized the company had too much staff and that efficiencies were going down. He needed to start planning. “Customers were still wanting stuff so you have to figure out how you’re going to balance things,” he says. Conservative by nature, Von Ruden says he’s always keeping an eye on things, making sure the company doesn’t grow unsustainably fast and prioritizing purchases. “We watch out debt load very closely,” he says. “You sometimes have to limit growth to a certain degree. Too much growth too fast is not good. It comes back to haunt you.” Ultimately, Von Ruden was proven correct. By early 2009, the market was tightening and by year’s end, times were tough. General Equipment Co. was hit hard, with an employee count of about 60 people being cut nearly in half and sales dropping by about 45 percent. But planning ahead helped. He used savings to purchase some higher-tech equipment to replace older machinery – and some people who had left -- and used the downturn as an incentive to diversify into new markets and add new features on existing products. “We went into it having some capital to work with, that’s what got us through,” he says. “The interesting thing is we actually added to the bottom line. We actually grew as a company financially through that mess just with some watching of pennies.”
A conservative financial approach and preparing in advance helped General Electric Co. grow profits during the last recession even when sales dropped by around 45 percent. — DENNIS VON RUDEN, General Equipment Co.
by Andrew Tellijohn
PHOTOGRAPHS BY TOM DUNN
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