O.C. execs see turnaround coming

O.C. execs see turnaround coming


January 28th, 2010, 1:44 pm · 8 Comments · posted by Mary Ann Milbourn, OC Register

Four Orange County executives representing banking, fast food, high tech and housing said today that they had retrenched during the recession but have positioned themselves for a turnaround which they expect this year.
Paul Folino, executive chairman of Emulex Corp., the computer storage networking company in Costa Mesa, summed up the stories of all four panelists.

"You have to retrench, get a new business model and hunker down," he told about 160 breakfast guests of Cal State Fullerton's Mahaylo College of Business and Economics. "But what you (also) do need to do is prepare to win, to prepare for success so you don't end up being in the bleachers and unable to be in the game (when it's over)."

The panel, the first of a series by the business school, focused on "The new landscape of Orange County." The speakers were asked to discuss how their companies survived the recession and their expectations for the future.
Joining Folino on the panel were:
•Dan Young, president of The Irvine Co.'s Irvine Community Development Company LLC
•Glenn Gray, president of Sunwest Bank,
•Bill Sanderson, president of fast-food service company Golden State Service Industries, Irvine.
Here are their company stories:
Folino said that during the worst of the recession, Emulex's revenues were down 20% to 25%.
Last month, however, the company, which serves IBM, Hewlett Packard and Dell, reported its first quarter over quarter growth in two years. Folino sees bright prospects for the entire high tech sector this year, barring a double-dip recession.
"Tech will help lead the way out of this recession," he said.
Although the banking industry has had it's issues "like a total meltdown," as Sunwest Bank's Gray put it, he was optimistic.
He noted federal regulators continue to have a list of between 522 and 1,200 banks that are financially troubled and may fail.
"The good news is most of them are not going to be in Orange County," Gray said. "Orange County actually looks pretty healthy right now."
As for Sunwest, he said the 40-year-old bank had its best year ever last year and has doubled in size to 10 branches. It is now the third-largest California-based bank.
His advice: "If you keep your powder dry and don't do a lot of stupid things — like subprime loans — you'll be able to take advantage. I actually do see a bit of a turnaround this year."
Golden State Foods, which is a supplier to McDonald's and other fast food businesses, actually has benefited from the downturn as the public traded down to less expensive food outlets.
The company added 100 people to its liquids business operations in Vernon and is growing a new business to supply Starbucks.
"We see the recession as an opportunity," Sanderson said. "Some of our competitors in some business segments stepped away from their knitting and pared down. We've very active in the market for strategic acquisitions."
The Irvine Co. used the dark days of what Young described as "the housing depression" to study the market to determine what would be the next trend in home buying, then decided to get out in front of that market.
"It's been about as bad as it can get, " Young said, "But we are going to step out in this market."
The company is opening 21 new model homes this weekend — the biggest, Young said, since 2005 — and already has 600 buyers prequalified for loans.
Anil Puri, dean of the Mihaylo College, said all four companies taught an important lesson for businesses:
"Innovation is the key to growth."