KINGSTON, R.I. -- May 21, 2001 -- Four of this year’s six inductees into the University of Rhode Island’s College of Business Administration Hall of Fame gathered before a banquet earlier this spring for a roundtable discussion on the high-tech economy, construction, real estate and international markets.
Those participating at the Hyatt Regency in Newport were: Bradford R. Boss, of North Palm Beach, Fla., URI graduate of 1955, chairman emeritus of A.T. Cross in Lincoln; Cynthia M. Deysher, URI graduate of 1978, of Sudbury, Mass, president of Deysher Advisory Services and former chief financial officer and vice president of ArrowPoint Communications; Robert S. Russell, URI graduate of 1975, of East Greenwich, chief executive officer of Rusco Steel; and Kenneth E. Munroe, URI graduate of 1943, of Narragansett and Naples, Fla., former president of Munroe Realtors Inc. Retired U.S. Sen. Claiborne Pell did not participate in the roundtable. Asa S. Knowles, first dean of the College of Business Administration, was inducted posthumously.
What is happening in the high-tech, data and information sector of the economy?
Deysher: It is a significant business cycle that technology companies in particular are going through. When you see the likes of companies that have been darlings of Wall Street for 11 years straight, like Cisco Systems, which is the company that bought ArrowPoint, to see them falter, and report revenue below what it was the quarter before, you understand that there is a significant adjustment going on, and I don’t think technology is something that is going to be corrected in the next quarter. I think it is going to take at least a year. So it’s real, it affects the ability to hire employees, attract employees, the stock options. It’s one of the more difficult business cycles I have ever seen, but I have only been in business for 23 years.

What’s happening in real estate primarily here in Rhode Island?

Munroe: From what I see, it is still going strong. The biggest problem today is getting listings, because the demand is far greater than the supply. And prices are still going up drastically. We see it here and in Florida. People seem to be paying whatever they’re asking, because there is so little to offer. Demand is there, and with mortgage rates going down, why it’s easy to get financing, and more people can afford homes. I’d say it’s very good in real estate.

How has the economy been for small business and the construction industry?

Russell: The construction industry is booming. We weathered the storm more than most, because we have backlogs of work that will catapult us through the next few years, so it doesn’t really matter what happens to the stock market. The construction industry is really booming now, and it has a few growing problems—the lack of labor; there aren’t enough skilled laborers to go around for all of the projects. It makes it a little more difficult for some to keep on schedule. Supplies are strong, because we get most of our supplies from mini-mills and they have very strong inventories.

What are your impressions of the stock market and the shakeouts that have been occurring with NASDAQ and the dot.coms?

Deysher: The market got significantly overheated last year. It peaked in March of 2000. You had companies that didn’t have a viable business, that didn’t have experienced management, and they were going out in the public markets and getting funded. It really was like the Dutch tulip craze that happened 500 years ago. I think we needed an adjustment in the market. A lot of these companies have gone out of business, but they’ve gone out of business because they really didn’t have a sustainable business model.

Does the volatility bother you?

Munroe: No it really doesn’t. I know in the real estate market you had peaks and valleys constantly, and you just ride through. When they come, you just don’t get too upset about them, because generally they taper off. We’ve had a real growth period the past several years. If you don’t have to sell (in the stock market) just sit back and relax, and it will all straighten out.

What about the labor market?

Deysher: The labor market’s changed a lot in (technology) in the last year. You couldn’t hire people, you had to pay a lot of hiring bonuses, and now a lot of people are being laid off in the technology sector. Start-ups are not having trouble anymore finding good people. There is a lot of management talent out there. So in the past year it has changed significantly from a real labor shortage to a real labor supply.
Russell: There is a huge shortage of skilled labor in the construction industry, and it will continue I would say through the next couple of years. I think there is just so many projects going on, the labor pool is small. Then you have a lot of retiring, and again most kids are expected to go to college, but there are a lot of skilled labor positions that make more money than a college grad. We’ve been around for a long time, and we’ve established a pretty good labor pool in the company. One of my fortes is surrounding myself with good people.
Boss: We have no problems, none at all (finding capable people). I think it’s difficult to hire some people in a senior capacity, because I think there are other states that are, let’s say, a little more attractive to them as a tax wise situation. I think there is still a lot of work we have to do in the state that way. As far as, if you have a reputation as a solid corporation doing what is right, you are going to be able to retain them and get them here.

How has the economy affected A.T. Cross?

Boss: We have found that a lot of the trends with personal computers and things of that nature have affected the sale of writing instruments per se. We noticed that back in the ‘80s when our refill sales started to drop. One of the things we have had to do with the advent of more casual dress is to make products more appropriate, if you will, with that type of attire, and we have been able to start to make some nice inroads in the last maybe 18 months to two years with some products of that nature. Things are going a little bit better for us in the last year or so, and we can see it start to become better. It hasn’t been easy, just because of the nature of our product.

Boss displays new product called the Morph, a more casual pen than the traditional Cross Slimline.
Boss: This, during my brother’s last year, was developed by a 24-year old Austrian who had been with the company two weeks… He had this on an easel. The idea is, you can change your grip, which no one had done before. We call it Morph, a metamorphosis of our company, from a standard Slimline to something so different.

How is A.T. Cross doing?

Boss: We have no long-term debt. We’re progressing. We’ve had to make some restructuring charges, we had to close our plant in Ireland. That’s been done, and that’s all behind us.
Now we’re doing all our manufacturing in Lincoln, and selling oversees. We don’t have quite the need for oversees manufacturing we had before, back before they had the European Union.
We’re not a company that borrows money, and we’ve stayed away from debt. I learned that many years ago; some of our accounting professors taught us that.

Are you worried about the residential development boom in South County?

Munroe: I don’t think that anybody who lives there likes to see this rapid growth, but it’s inevitable. It’s so easy to get to Providence. People love being out in the country so to speak, and they can get quite a nice home for not too much money. That’s what’s causing the growth down in South County. I think people are getting tired of living in the built up areas, and they want something where they can have more movement, be closer to the ocean.

Do you think South County communities are doing enough to manage the growth?

Munroe: They are trying, but I don’t think they can do much about it. The people are going to pour in, and I don’t think anything is going to stop it. One of the problems as I see it is real estate taxes are getting quite a bit higher.

Cynthia what about your area (Sudbury, Mass.):

Deysher: It’s still hot. I have lived in Sudbury for 13 years, and it was a lot more rural than it is now. There are million dollar homes there; that’s commonplace now, where that was very uncommon, before and those homes are selling. I think the high end of the market is still doing well.

For Information: Dave Lavallee 401-874-2116