While the news reports show so many manufacturing companies struggling, some are reaping the benefits of their nimble and forward thinking approach to growth. While some are choosing to focus on the seemingly inescapable doom and gloom, others are using this time afforded by our current economic slowdown to take stock of their businesses and position themselves for success once things turn around.

It's not all gloom and doom. There are opportunities to be taken advantage of, both domestically and internationally. It's like managing your financial portfolio…is your business diversified enough? Are you making investments you shouldn't? Are you considering the long term as well as the short?

Here are a few trends we’re seeing that manufacturers may want to explore as we progress into 2009. 

Healthy Balance Sheets Yield Great Opportunities

So many organizations with financially distressed suppliers spend an inordinate amount of time managing them. This gives financially sound suppliers a leg up. Are you leveraging your financial health the right way to get new business? Have you considered new markets or acquisitions? Have you considered increasing prices? (If you have a particularly strong balance sheet, this may be a possibility—even in today’s economic environment.) 

Middle-Market Companies Are En Vogue Again

In the late ’90s and early ’00s, there was significant focus on acquisitions and top-line growth. Companies took on significant debt, and cost structures increased. While OEMs used to prefer to work with these mega suppliers—in some cases shutting out smaller companies altogether—that’s no longer the case. Today, it’s those middle-market, privately held, family-owned businesses that didn’t take on a lot of debt, whose cost structures are good again, that will drive the manufacturing industry going forward. We’ve already seen that trend with certain clients in the metal castings industry. 

Automotive Consolidation Means Fewer Suppliers & Greater Demand

Over the next six months, we will likely see real consolidation in the automotive industry. When the market improves, fewer suppliers will be competing for increased volumes, which will make surviving suppliers healthier. This will be coupled with inflation in certain key markets. We’re already seeing this trend in certain commodities, such as tin-plated steel. 

The Global Recession is Real…But That Doesn’t Mean Global Activity Should Be Discounted

China is experiencing a myriad of layoffs and plant closings; it’s estimated that 35,000-40,000 small businesses have closed in Southern China alone. Mexico’s peso has depreciated an unbelievable 35 percent. Russia, who recently was investing significantly in automotive, has pulled back.

Still there are some opportunities to capitalize on. Because the peso has depreciated so significantly since July 2008, some organizations may want to consider executing a hedge. For example, let’s say an organization has $100,000 of payroll in 2009. If you convert it to pesos now or execute a hedge with a future contract you can lock in a 40 percent savings compared with the exchange rates as recently as July 2008. Moreover, you don’t have to let the money just sit there; you might consider taking advantage of Mexican government bonds, which typically earn higher interest than you could earn here in the states.

In addition, steel costs much less in China than in the United States. Any savings available via simply purchasing raw steel for use in the United States would likely be negated by shipping costs and Chinese value-added taxes. If you are actually manufacturing product in China, however, you might be able to take advantage of these savings and buy a larger quantity of material for use both now and later. 

Infrastructure Is a Key Indicator of Growth

If you’re looking at your global business portfolio and wondering, “When should I become active internationally?” a good indicator is infrastructure. Infrastructure leads to construction, which leads to growth in the automotive sector.

There’s been a lot of talk about India as becoming a competitor of China’s; one thing India is sorely lacking is infrastructure. If/when this happens, it will present all kinds of opportunities for manufacturers. 

Heavy Duty Construction, Aerospace Defense, & Green Energy Are Good Bets

Oftentimes, organizations will ask, “What areas or industries should I be targeting?” Heavy duty construction (for reasons previously discussed) and aerospace defense (the war on terror is far from over) are good bets. There are also a variety of contracts out there to be won relative to green energy. However, this area will likely be a protectionist market. The Obama administration has made it clear that a certain amount of protectionism is in order; we just don’t know the extent. There’s also been a clear wake-up call toward the promotion of U.S. manufacturing jobs and the need to have a strong manufacturing base here in the Midwest. 

Come Out of Hibernation

While it can be tempting to bury your head in the proverbial sand, this isn’t the time to do it. Now is the perfect time to step back and evaluate your business portfolio with an eye on the long term. There are a variety of opportunities that manufacturers can take advantage of now; moreover, there will be even more opportunity once the inevitable turn around occurs. You’ll want to be a part of it.