Investing in North East USA

Greg Wolfe - VP and general manager, Megger Valley Forge

When a recession strikes, the instinctive response for businesses is to slash expenditure to the bone, and that invariably means putting all investment plans on hold. For some businesses that are in poor financial health, such a response may be unavoidable, but it’s perfectly possible that companies in this category would have struggled to survive even without a recession.

But what about the majority of companies that are in a stronger financial position? Are they right to stop investing? Anyone who believes the answer to be yes is ignoring one very important fact – the recession will ultimately come to an end. The timing may be uncertain, but end it most certainly will.

Now if all companies adopted the same strategy, when the economy improves there would still be a level playing field. But that’s not how it works – some enlightened organisations, while taking care to eliminate unnecessary expenditure, will have maintained their commercial momentum by continuing to invest throughout the recession. When it ends, therefore, they will be in a much stronger position than their competitors to profit from the upswing.

For this compelling reason, continuing investment is the strategy that has been adopted by all parts of the Megger organisation across the globe. In the UK and Sweden, major capital projects are ongoing, and now it’s the turn of the USA to demonstrate how a dynamic, confident and forward-thinking business deals with a recession and plans for the future.

At the company’s major manufacturing site in Valley Forge, PA, a new and highly automated surface mount line has just been commissioned. This allows printed circuit boards to be manufactured in-house, reducing costs and lead times, and allowing even better control over product quality. Note that all of these factors enhance the company’s competitive position during the recession and, possibly even more important, after it.

At the same site, the opportunity has been taken to lease an additional 400 sq. m of building space, which has allowed six new engineering laboratories – three for HV equipment and three for LV – to be set up. These will facilitate the further development of new and existing products, once again paving the way for enhanced success in the future. To cope with the anticipated increase in demand, the production area has also been increased by 20%.

The laboratories are complemented by a newly installed machine shop that provides in-house metal fabrication facilities. As a result product prototypes can be produced faster than ever and at reduced cost. That means a faster response to customer requirements as they develop and change.

Of course as well as making investments in house, a company with its eye on future growth needs to make sure that its customers can see the benefits that this expenditure is bringing to them. For this reason, the company has created a new product showroom, which is co-located with the North-East USA AVO Training facility.

This facility is also a recent addition, and provides existing and potential customers with the opportunity to do a little investing of their own to enhance the expertise of their employees. Internal restructuring to bring together teams of co-workers on related products, and a rather large investment in the back-room computer systems that underpin the business were also necessary.

This story is not intended as a catalogue of what Megger has done, but as an example of how a business with a genuine enthusiasm for the future can, even in these difficult times, lay sound foundations for future success and profitability. Without doubt, it’s time for businesses of all sizes to shake off that recessionary torpor, and to remember the old adage that fortune favours the brave!