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What Does “Lead Times” Mean? TOP DEAD CENTER
Russell Palmer ............................Chairman of the Board Michael J. Osenga............................................President Michael J. Brezonick ..................*Senior Vice President***

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Okay, all together now. Deep breath. Exhale. Repeat. Deep breath. Exhale. At the risk of completely jinxing the thing, the worst appears to be over. Of course, if you listen to some prognostiguessers, this is only the pause ahead of the complete and total collapse of the global economic system. Of course, no one wants to forecast exactly when all that will happen. But after the last 18 months we’ll take any good news we can get, for however long it lasts. No doubt there are problems, maybe severe problems ahead of us. But aren’t there always? Certainly there are reasons to be wary, concerned, thoughtful. If not, you weren’t paying attention the last year and a half. Thus, we are thankful that many segments of the engine-powered equipment mar- kets appear to be in one stage or another of recovery mode. For a minute, let others debate which segments, how high, for how long and how widespread. But nibbling at the edge of our current feeling of “whew” comes the beginning of a troublesome “what if?” One of the major global OEMs was running around visiting its suppliers late in 2009 and saying “expect 20% more biz from us this year. Oh yeah, don’t be surprised if it turns out to be 30 or 35%.” All of which was greeted by a collective supply chain sigh of relief. Until they replayed the tape. “Um, did he say 30 to 35%?” There is the beginning of concern that a rapidly improving equipment market could outrun the supply chain. The math isn’t hard. The last 18 months have wiped out a lot of people and resources like square footage and other such staples required to pro- duce stuff. No, there is not a capacity shortage, and more than a few suppliers out there are saying, “geez, if they can’t get (fill in the product), tell ’em to call us, we’ll take care of that problem in a heartbeat.” Well maybe. With an estimated 25 to 35% fewer people currently employed in these markets, this thing can’t simply turn on a dime and pretend it’s 2008. The reason these are only whispers right now is the recovery is moving at a com- fortable pace. Most would be happy with about three to five years of this slow, steady, predictable, manageable growth. Which of course never happens. Plus, there are some markets (see equipment, compact) where recovery is a dream, not a reality. So it’s not universal — not at all. But at one of the spring shows, somebody smilingly said, “yeah we’re starting the year out OK, actually a little better than OK. But man, there are some segments that really seem to be starting to move. If it keeps going like this, we may have some lead- time issues.” Huh? Lead times? Lead times? Talk about a lost cultural reference. You might as well have been talking about John Lennon, the Lovin’ Spoonful or Canned Heat. Lead times? dp