From The Milwaukee Journal Sentinel

As government leaders respond to fears by some analysts and many frenzied investors that we are tumbling into, if not already in, a recession, six Wisconsin executives offer their take.

They are Cindy Lu, vice president and co-founder of Novo Group; Jeff Joerres, chairman, president and chief executive officer of Manpower Inc.; Paul Purcell, chairman, president and CEO of Robert W. Baird & Co.; Steve Roell, chairman and CEO of Johnson Controls Inc.; Tom Boldt, CEO of the Boldt Co.; and John Bergstrom; CEO of Bergstrom Automotive.

In interviews with Journal Sentinel reporters Joel Dresang and Thomas Content, they differ on the inevitability of a downturn but agree that a recession now will be unlike the eight-month decline that officially ran from March 2001 to November 2001.

Q. What's your view of the economy today, and what concerns you most?

Lu: Candidates tend to be a lot more cautious about moving. So it might take a recruiter twice as long to get somebody over to a new opportunity because, even if they hate their job, they're still going to maybe stick it out because it may be considered safer or more secure than to make a move.

Joerres: My main concern is that are we going to talk ourselves into something. That's an immediate concern because what I don't see is some of the other concerns really affecting the core part of the business.

Purcell: There's clearly a slowdown. Real estate, industrial production, employment growth, all of those economic indicators are clearly flashing slowdown. And the question is, will that slowdown turn into a recession. I think what you're seeing is that monthly the probabilities are going up.

Roell: My concern is the psychology that's being created by all the headlines and news broadcasts. If you would have asked me a month ago, I would tell you there was some softness in the economy, but the consumer wouldn't be impacted the way it is.

You've got an awful lot of activity that is psychology-based, which is now starting to impact the economy in terms of buying decisions.

Boldt: I think of that old line about what influences the stock market: greed and fear. The fear part is definitely going on. There has been this constant drumbeat of the subprime market and the impact of that, and how deep and influential will that be.

My belief is that fairly soon we're going to be coming to the end of this, and I don't think people quite appreciate the size of the American economy. If you take the subprime and write down $200 billion, in relationship to the size of the American economy, that's not that big of a deal.

Bergstrom: Everyone in business is a little apprehensive of what kind of ripple effect there's going to be from the housing. We'd all be not true to ourselves if we didn't say that. In some ways, because we are Wisconsin-based, we have never had real spikes like California or Texas or Florida. Is it as good as we want it to be? No. Could it be a whole lot worse? Yes.

Q. What's your outlook for the months ahead?

Lu: Any business is not going to do as well in a recession. Maybe it's because our clients are diversified, but we're not feeling it as much.

Joerres: Right now it clearly looks soft and is soft in the U.S., Europe continues to have strength, and we'll just have to see how much of this "contagion" really exists.

When we talk to our clients, when we look at even our own business and how we're conducting it, there's still demand out there. We all get nervous when you see how one domino can knock another, can knock another, can knock another -- and they end up affecting your business.

Purcell: My assessment is that the probabilities have crossed 50% that we're headed into a recession.

Roell: The North American auto industry and the residential HVAC market, we're already in deep recession modes. The global market I still feel very good about. I still see our key markets holding up well, in terms of non-residential construction. Our backlog and our order rate and our pipeline of future orders are all showing double- digit gains.

Boldt: In our business I have not see anything that would be evidence that people are panicking, (or that) projects are being canceled or delayed, or anything.

Q. Inside your business, what actions are you taking right now, or have you taken, to prepare for a slowdown?

Lu: We might shift gears and look more at selling on the sales organizations rather than the back office organizations. Especially in a bad economy, organizations are going to be adding top sales people in order to drive revenue. There just may be a lot less in the back office type role.

Joerres: If there were something that knocked all of the dominoes down and became very difficult, we would just view it as an opportunity to look at new services that we should be putting in place, to accelerate some openings in some emerging markets, because many of our competitors wouldn't be able to do that.

Purcell: We're going to continue to grow. We're just going to do it cautiously and carefully to make sure that we take good care of the people and the clients that we have.

Roell: We're still being very careful to protect our critical investments that we're going to grow in the future. We're not going to pull back on our M&A activity. Our balance sheet and access to capital is such that we can do a lot of acquisition work right now without even going to the bond market.

Bergstrom: When we did our business plan for 2008, we changed our inventory significantly to anything that was environmentally driven. We cut back in our truck inventories.

Q. What's your view on actions in Washington -- the Federal Reserve's move this week, the stimulus package?

Joerres: Some of that is helpful because it puts a bit of salve on some wounds, but it really doesn't go to curing anything, and that's my concern.

Purcell: Whatever packages come out there'll be a healthy dose of tax rebates, with the hope that consumers take and spend them or at least reduce their debt to increase their spending capabilities going forward. My guess is there will be a number of specific fiscal things that come through as well. But I do think looking back at 2001 and 2002 that the tax rebates helped.

Boldt: I was surprised . . . My view of the economy is that it's stronger than a lot of people make it out to be. What I've heard and seen and what I believe is there are choppy waters ahead, maybe not in 2008 but in 2009, 2010 -- and that's a whole different story. It's still churning along from my perspective. But if I were a homebuilder I might have a different perspective.

Q. How does this situation compare with the 2001 slowdown, and do you think your business is better positioned or more vulnerable than it was then?

Joerres: Our company itself is in a very different spot because we own the largest outplacement company in the world. The best time for an outplacement business is a downturn because that's when most companies are thinning their staff and having people career- transition out. So clearly we have an element in our portfolio that we never had before and that will serve us very well.

If we were a U.S.-only company, I might be a bit more crazy. But I have the rest of the world to be looking at.

Purcell: Stock market valuations this time around are much more reasonable than they were in 2000-2001, so it is our belief that the impact on the stock market will not be anywhere near as severe as the 2001-'02 action.

Also, personally, I think globalization -- the impact of China, India, South America and a more vibrant Japan and Europe -- those economies are much healthier than they were back in 2001 and 2002 and growing much more quickly. I think a healthier global economy will act as a bit of a cushion.

Roell: It's a little early to be predicting a recession. Everyone is saying that word; they didn't use it a month ago. The consumer is only feeling the impact of the stock market over the last 30 days. The question is does it affect their buying patterns -- do they cut back, do they defer, do they delay? So that's really the wild card.

Cindy Lu, vice president and co-founder of Novo Group, a Milwaukee-based professional recruiting firm that started in 2003 and has four offices nationwide, with a fifth planned this summer. Novo's fee structure and client base should help it withstand a recession, Lu says, along with needs for executives because of restructurings and retirements.

Jeff Joerres, chairman, president and chief executive officer of Milwaukee's Manpower Inc., a publicly traded employment services company with offices in 78 countries, up from 59 countries in 2000. Among its subsidiaries is Right Management, acquired in 2004, which is the world's largest provider of outplacement services.

Paul Purcell, chairman, president and CEO of Robert W. Baird & Co., a Milwaukee-based employee-owned investment firm that expects to generate about 20% of its 2008 business from outside of the United States, compared to about 5% in 2000.

Steve Roell, chairman and CEO of Johnson Controls Inc., a $32 billion Glendale company that sells everything from car batteries and in-vehicle electronic gadgets to air conditioners, boilers and building control systems. While it serves the housing market and the sagging new-car market in the United States, Johnson Controls has offices in 125 countries and projects that more than half of its 2008 sales will come from outside North America.

Tom Boldt, CEO of the Boldt Co., an Appleton construction firm that specializes in commercial construction. The company has little exposure to residential real estate, and sees no signs of slowing orders or delays in coming projects.

John Bergstrom, CEO of Bergstrom Automotive, the largest car dealership group in the state with 29 stores. Across all brands, Bergstrom says the company is seeing demand shift from large pickup trucks and sport utility vehicles to fuel-efficient cars, luxury hybrids and crossover sport utility vehicles.

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