It was not a year likely to be forgotten. Book-ended by staggering events--the war in the Persian Gulf and the disintegration of the Soviet Union--what 1991 may most be remembered for is the unrelenting economic strife here at home, resulting in the longest and most devastating recession in almost a decade.
Unlike the recession of the early 1980s, however, this one was felt by everybody, from the assembly line worker at General Motors to the Ivy League MBA on Wall Street. At best, according to several CEOs of the nation's largest black businesses, 1991 was a challenge, a struggle, the ultimate test of their companies' flexibility and stamina.
The new economic realities of 1991--the demand for flawless products and services, the growing reliance on emerging companies for economic growth and the availability of thousands of experienced, results-oriented managers pushed into occupational free fall by downsized corporations--has created an outlook of rugged opportunism for black entrepreneurs. They know that the bottom line is survival--and to survive, thei companies must compete more fiercely than ever for business opportunities.
BLACK ENTERPRISE's milestone 20th Annual Report on Black Business reveals that the nation's largest black-owned businesses have adjusted to these realities and surged forward, with more companies emerging in new areas and with improved performance overall. Take Metters Industries Inc., a $26.8 million systems engineering concern, for example. CEO Samuel Metters says the key to his McLean, Va.-based company's 58.2% increase in revenues in 1991 was its anticipation of the recession and defense cutbacks long before they struck. Following his personal survival strategy, "Plan for the worst, look for the best," Metters sought out recession-proof opportunities, creating a new division within his company that maintains records on waste management for several government agencies.
Most of the nation's largest black-owned companies and automobile dealerships spent the year cutting back where possible. The total staff for the 1992 BE 100s, the nation's 100 largest black-owned industrial/service companies and 100 largest black-owned automobile dealerships, increased by only 2.5%, from 37,778 to 38,723. The collective gross revenues of the BE 100s totaled $7.9 billion, a 10.4% increase over last year and the largest increase since BE began tracking separate lists in 1988. Meanwhile, gross sales for the nation's largest industrial corporations fell by 1.8% last year.
Slimmed Down, Toughened Up
Apparently, the BE INDUSTRIAL/SERVICE 100's aggressive efforts to slim down and toughen up in 1991 were effective: Total 1991 sales for the nation's largest black-owned industrial/service companies were up 10.6% over the previous year, to nearly $5 billion, while total employee numbers increased by only 3.9%, to 32,590.
The performance of American Development Corp. (ADC), a $25 million, sheet-metal manufacturing operation, is consistent with those trends. CEO W. Melvin Brown Jr. attributes his North Charleston, S.C., company's 68.7% increase in revenues to a two-year, $25 million contract to build postal carts for the U.S. Postal Service and to the $1 million he invested in robots to build them--enabling ADC to trim about 40 jobs. Not surprisingly, ADC is this year's sales growth leader among the largest black-owned industrial/service concerns. The company is ranked No. 50 on the BE INDUSTRIAL/SERVICE 100 list.
The chief executives of long-established companies are aggressively seeking new synergisms in their search for growth and expansion, while entrepreneurs of more recent vintage are acquiring undervalued businesses and reaping profits in technology-based industries that would have been impractical as recently as 15 years ago. Both types of businesspeople are represented in this year's choices for BE Company of the Year.
Charleston, W. Va.-based C.H. James & Co., No. 72 on the BE INDUSTRIAL/SERVICE 100 with 1991 sales of $18 million, is a company born in the 19th century. However, CEO Charles H. James III, the fourth generation of the James family to lead the 109-year-old, poultry and grocery products concern, is aggressively leading the company into the 21st century. The 33-year-old Wharton MBA plans to achieve this by expanding the company's marketplace nationally and pursuing strategic alliances with other flood industry concerns. (See "109 Years Old And Still Going Strong," this issue.)
Meanwhile, Don H. Barden, 48, has built Barden Communications Inc. into multimillion-dollar company by parlaying real estate investments into ownership of the nation's largest black-owned cable franchise. Barden Communications, an 11-year-old company on the BE INDUSTRIAL/SERVICE 100 for the second year, ranks No. 5 with $91.2 million in 1991 revenues. The Detroit-based company posted 6% sales growth in a year when both the real estate and communications markets were battered by the recession. (See "Wired For Success," this issue.)
Despite the differences in these companies and their respective CEO's, both James and Barden face the same challenge: to reshape their businesses to thrive in the 1990s.
Proven Winners And New Players
The largest of the BE INDUSTRIAL/SERVICE 100 companies continued to anchor the list by delivering solid performances in 1991. Only one of the top 10 and two of the top 20 companies on the list reported decreases in annual sales: Chicago-based Soft Sheen Products Inc., the hair care company, reported a 4.6% drop to $87.9 million, and Trans Jones Inc./Jones Transfer Co., the Monroe, Mich.-based transportation services company, had a 18.4% slide to $61.2 million.
New York-based TLC Beatrice International Holdings Inc., comprised of food-processing and distribution concerns concentrated primarily in Western
THE 1992 BLACK ENTERPRISE 100s PERCENT 1990 1991 DIFFERENCE CHANGE TOTAL SALES (*) $7,169.025 $7,911.192 $742.167 10.4% TOTAL STAFF 37,778 38,723 945 2.5% 1992 B.E. INDUSTRIAL/SERVICE 100 TOTAL SALES (*) $4,517.894 $4,996.809 $478.915 10.6% TOTAL STAFF 31,351 32,590 1,239 3.9% 1992 B.E. AUTO 100 TOTAL SALES (*) $2,651.131 $2,914.383...