My grandfather worked in a potato chip factory in Decatur, Ill., and he once took my family on a tour of the plant. All that machinery fired my boyhood imagination, and I gotta say, you’ve never tasted a chip like one just out of the fryer, plucked from the conveyor belt.
I was fond of those chips, and not just for the taste. Crane’s Potato Chips included a prize in every bag, a major league baseball pin. Each summer, when we visited from Washington, we would add to our collection.
I remember thinking how cool my grandfather had it. That is, until I overheard him one day talking quietly with my father about the factory’s prospects and whether there might be layoffs in the offing. That made no sense to me: How could a product so good not be in demand?
Now all grown up, I have a better sense of business cycles and global competition, of supply and demand, and changing consumer preferences. If there is one certainty in business, it is that there is no certainty.
Recently came news Booz Allen Hamilton was paring back its manager and executive ranks, this from a company that has mostly stellar earnings reports since going public in 2010.
Booz Allen is hardly the only contractor shifting gears as federal spending slows. Lots of others are cutting back, too, and for good reason, as I learned last week while chatting up Bill Ridenour, the president and chief administrative officer of John Marshall Bank in Reston.
John Marshall specializes in loans to businesses, and many of its clients are small and mid-size government contractors. Some up-and-comers, Ridenour said, can get in trouble by staffing up when times are good, betting on extensions and new contracts before the work has materialized.
A good banker will work with a client to be prepared, while building in triggers to a loan, so that if work winds down a financial institution’s exposure is limited.
We’re in a wind-down phase right now, and I’ve seen this movie before.
My grandfather’s company eventually sold to a larger snacks concern out of Chicago.
Those baseball pins are now collectibles.