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A contrarian's view of downsizing.

When historians look back on this economy we are living in right now, they undoubtedly will call it something like The Era of Downsizing. Every day, the headlines on the financial pages seem to confirm that judgment: Corporations that were once symbols of stability announce they are selling off major parts of their business or laying off staggering numbers of employees. It is not surprising anymore to hear a company report record profits - and immediately announce they are cutting more jobs, closing more plants or pulling out of more markets.

This downsizing fever shows no signs of abating. The American Management Association recently surveyed 8,000 large U.S. firms and discovered fully 29% of them expect to slash jobs in 1996 - the highest percentage since the AMA started taking these surveys in 1987.

Why downsize? It is undeniable that Wall Street these days rewards downsizing very well. The bigger the layoff a company announces, it sometimes seems, the bigger is the jump in their stock price.

However, it seems to me that in far too many cases companies are embarking on downsizing without thoroughly thinking through their reasons - or the long-term consequences downsizing might have for their business and the economy in general. Indeed, there is a certain faddishness to downsizing. In many ways, downsizing is the product of a cottage industry of business book writers - who were preaching a different magic solution yesterday, and will be back to sell us something new tomorrow.

Well, United Stated Cold Storage is one company that is not joining the downsizing bandwagon. We believe in growing our business - not shrinking it. We are committed to giving our customers more and better service options - not telling them to take their business down the street.

While others have been downsizing over the past half-decade, U.S.C.S. has been building. Just last fall, we dedicated our newest plant, a 2.13 million cubic-foot plant in Fort Worth, Texas. With a Mariachi band playing and Mexican folk dancers swaying, we held a ribbon cutting ceremony that recalled the grand tradition of ship launching by our global parent company, the Swire Group. Even as we were celebrating that opening, however, the bulldozers were clearing a site for a 2 million cubic-foot addition that will be online very soon. U.S.C.S. also recently announced that we will be building three new plants, located in Illinois, North Carolina and Tennessee.

Let me be clear about one thing, however. Just as we at U.S.C.S. are not falling for the fad of downsizing, neither is our expansion the result of some corporate hubris. We plan our growth - and we plan to grow. Consider, for example, our ultramodern facility in Tracy, California. The 1.85 million cubic-foot plant sits on land that can accommodate a facility five times bigger. Our Tracy plant is not even three years old yet, but someday it will grow to 8 to 10 million cubic feet.

At United States Cold Storage, we have seen this growth philosophy pay off. For example, when we bought the old Bay Central Cold Storage plant in Milford, Delaware, we immediately more than doubled its size. In quick order, we expanded again and again until today the facility has a total capacity of 4.3 million cubic feet. More important, though, U.S.C.S.-Milford has become one of the premier frozen food plants on the Atlantic Seaboard. Overseas shipments through Milford jumped 45 percent in 1994 alone. We were proud when Delaware governor Thomas R. Carper honored U.S.C.S.-Milford as 1995 Exporter of the Year for its role in boosting the state's global trade.

We believe our employees, too, have benefited immeasurably from United States Cold Storage's commitment to expansion rather than downsizing. We run a tight, efficient operation with no tolerance for dead wood. Yet, morale is hearteningly high, and I know from the many employee suggestions I see every day that our people are devoting their creative energies to helping U.S.C.S. grow. That, of course, is a tribute to the leadership abilities of our local plant and regional managers. But it is also, I think, the kind of response you get when employees see that their top management is committed to growth.

Contrast that attitude to the wary skittishness you find among employees at too many companies these days. Indeed, nervousness about downsizing has infected so many people that we have seen retail sales sent crashing and home buying slow nearly to a halt despite attractive interest rates. Is this really to be the payoff of downsizing: An economy that shrivels up as well?

There's another reason I cast my lot for expansion rather than downsizing. As businesses of all sorts become increasingly global, it seems to me that our innate American optimism and can-do attitude is an advantage we should never abandon. I think of the words of Daniel Burnham, the architect and planner who transformed the city of Chicago' "Make no little plans, they have no power to stir men's souls."

David M. Harlan V.P. National Sales & Marketing United States Cold Storage, Inc.
COPYRIGHT 1996 Frozen Food Digest, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1996 Gale, Cengage Learning. All rights reserved.

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Title Annotation:United States Cold Storage Inc.
Author:Harlan, David M.
Publication:Frozen Food Digest
Date:Feb 1, 1996
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