All In This Together

Mar 19, 2020

By now, everyone should have come to the realization that we are looking at some challenging times ahead. While health officials working to “flatten the curve” of coronavirus, we’re all trying to adjust to a sudden shift in all our lives. This isn’t a local catastrophe, we’re all being impacted.

Just how much remains to be seen.

Yesterday, my wife relocated her office to our home. Today, I’m adjusting to a pair of very different kinds businesses working under our single roof.

Last night, I spent time talking with different industry contacts, asking what they’re seeing in their particular industry.

Essentially, everyone gave the same answer: the supply chain is being disrupted.

How badly is still the major question. But as things in China appear to be stabilizing, there’s some cautious optimism in some businesses that the disruption will be measured in weeks, not months.

But virtually every industry agrees:

  1. As supplies of raw material slow up, the first to feel the impact will be component makers,
  2. As they’re forced to slowdown-or possibly stop entirely- due to a lack of material, that impact will move up the manufacturing chain, eventually getting to manufacturers,
  3. When that happens, finished products will get scarce, and prices will likely rise.

What’s also accepted, although reluctantly, is that an industry of small companies will be disproportionately impacted.

We’re already hearing reports of small service providers on the West Coast telling firearms companies they’re beginning closures that will last 2-3 weeks. Consequently, their customers (the manufacturers) may run out of necessary pieces they assemble their parts.

As a result, both companies may shut down. Hopefully for weeks, not months.

Once the supply chain restarts, there will be a lag time between restarting and producing products.

The first will be a delay getting raw goods back into the supply chain. A second gap will happen as product is finished and sent to customers waiting on them.

Another delay happens as the customers resume their production. That’s when we will see just how badly manufacturing has been impacted. If the delays aren’t excessive, the smaller finishing houses -the people who apply coatings or whatever- should have survived. If they did, they start their work and eventually the gap between raw goods and finished products begins to narrow, then disappear.

That’s presuming, of course, each of the small companies can survive a shortage work or a shutdown mandate like those being considered in many parts of the country.

Work can stop; bills will not.

Yesterday, Tennessee Governor Bill Lee reminded reporters that more than three-quarters of Tennessee’s companies are small businesses, companies with 50 or fewer employees. “We’re having to take some extreme measures to protect our citizens,” he said, “we’re going to have to take equally extreme steps to protect our businesses because our citizens depend on those jobs.”

It’s a growing problem. Nevada Governor Steve Sisolak ordered all nonessential businesses in the state to close down Tuesday night. And those nonessential included casinos.

If casinos are nonessential in Nevada companies that provide everything from raw materials to parts coatings for other industries may be considered disposable. Without some form of governmental assistance, that is.

Our industry is largely comprised of small, entrepreneurial companies. We prefer small government. Our times, unfortunately, may make that impossible for many of our businesses to survive without some form of government assistance.

So we need to make certain that assistance isn’t just available, but that it’s neither politicized or weaponized against our industry. This assistance package needs to be available to every small business, not just the ones adjudged as “acceptable” by politicians.

There still are politicians who continue to push banks and lending institutions to deny credit to the “gun industry.”

While we’re all distracted by events far beyond our control, we can’t take our collective eyes off political hotspots or virtue signaling politicians. If we don’t, they will weaponize the very aid intended to help businesses - all businesses- survive.

Effective last night, Ford Motor Company stopped all production through March 30. General Motors is also closing down, but on a schedule determined by managers. Both companies say they’ll use the shutdown as an opportunity to sanitize facilities and devise new plans to deal with previously unforeseen challenges. They’re large enough to survive the uncertainty, although they fully expect the government to help ease their discomfort.

The coronavirus certainly qualifies as unforeseen challenge, not just for businesses, but for the people they employ.

We’re all working on how to respond. Staying calm while remaining vigilant would be a good way to start.

As always, we’ll keep you posted.

—Jim Shepherd