Engineering businesses gear up to return
ENGINEERING and machinist companies will need to be nimble when it comes to managing cashflow once they get back to work, United Machinists chief executive Sarah Ramsay says.
Some engineering companies say they will be allowed and capable of working safely in an Alert Level 3 environment if Cabinet decides to bring the country out of lockdown next week.
Mrs Ramsay, who is also a board member of the Southland Otago Regional Engineering Collective (Sorec), said it was unlikely firms would be able to continue many contracts where they left off.
‘‘Everyone’s been through a process of the initial shock, the grief for the plan that was, because I think we all realise the world’s not going to be the same for quite some time.’’
She had been part of a Zoom call with other key stakeholders in the industry locally and nationally yesterday morning.
‘‘The last couple of weeks have been intensive planning for what we’re going to do when we get back . . . the sentiment was pretty universal that we’re all pretty frustrated and anxious to just get stuck into it now.’’
There would be financial hits to come, Mrs Ramsay said.
United Machinists is a contract manufacturer for hightech exporters and many of its clients sent products to the United States, Europe, Australia and Asia, all areas affected by Covid19.
‘‘We’ve taken a pretty significant hit.
‘‘One of our clients is actually significantly up, one has put work on hold for a couple of months and another is planning to be business as usual.
‘‘As far as our anchor clients — we believe it will be slower. We’re forecasting to be about 50% down for the next three months and then we see things building back up.’’
Businesses would need to be quick on their feet when it came to cashflow, Mrs Ramsay said.
She said her company had prepared multiple cashflow forecasts and was operating conservatively. It would update forecasts daily, depending on what clients were doing.
Mrs Ramsay said her staff would receive the wage subsidy and hoped by September or October the company would be in a position to put staff wages back to what they were.
She had no intention of letting any staff go.
Farra Engineering chief executive Gareth Evans, who as chairman of Sorec had also attended the industry Zoom call, said he and his staff were keen to get back to work as soon as possible.
‘‘The whole team’s itching to get back to work. Everyone’s quite excited at the prospect.’’
The company was working through health and safety plans to ensure it met Government rules.
‘‘We’re quite fortunate that our sites are very spread out, so maintaining physical distancing is not going to be too challenging for us.
‘‘The biggest challenge will be where our guys are doing site work — where our guys are out on other people’s sites.’’
Mr Evans said it was likely the company would be facing a ‘‘very lean year ahead’’ financially.
‘‘We’ve had some customers reduce or cancel orders already.
‘‘We’ve had a couple of others that have gone into liquidation.’’