Living In A Cyclical/Cynical World
Living In A Cyclical/Cynical World
I would like to start by saying I think VERY few people are accurate at forecasting anything past three months these days including myself. If I were really any good at it, I would still own the bulk of my Apple shares from the early nineties and would have purchased 100 times more Peak Energy stock (prior to the buyout) than I had. With that being said, I will share my thoughts on 2016 and beyond. I will not dwell on the political situation we are in. We have a premier who seems more concerned about “pleasing the prime minister” than protecting jobs in Alberta and an energy minister whose solution was to tell oil and gas people to move to BC and look for work. The bottom line is government is not business. Business creates real jobs that deliver real money into the economy! Government simply redistributes our wealth according to their own agendas and promises. We cannot do anything to change that for another four years, so we need to just roll up our sleeves and press on.
We are all aware 2015 has been a VERY difficult year for many people. We lost friends who were colleagues, business partners, and suppliers over the past twelve months. They were those who simply could not weather the storm for a number of reasons. What many thought was a light at the end of the tunnel turned out to be a train barreling straight for them. We live in a cyclical (and lately a little bit cynical) world here in Alberta. This past year has certainly been no exception to that rule with much more down than up. Downtown Calgary is not a happy place these days, and you cannot help but look into the eyes of people approaching you and see how worried they are about their own situation or the plight of others.
The year 2016 will be a time to get out of our funk and work together to create shared success. Certainly, there is enough bad news being spread for 2016. The expected active drill rig count is forecasted to be the lowest we have seen in more than thirty years, but we need to be a little more optimistic. We absolutely MUST band together and work collaboratively to ensure our industry can grow and prosper again. There are also great environmental pressures. Contrary to various sources, we have continued to improve on our record of protecting the environment, and we will make strides in 2016 as well. Environmental related products and services will no doubt prosper. Companies delivering their own solutions in an environmentally sound manner (like Plains Fabrication) should also see recovery and growth.
I believe there is another side to the issue. One of even greater importance. This business used to run on handshakes, people being true to their word, and actually living by a code of the West. I think it is long past time for people to get back to a more honest and ethical way of doing business. Rather than beginning at a position of trust and collaboration, we seem to start from mistrust. The relationships too often become adversarial and combative rather than collaborative and supportive. Lies and secrecy seem to be the natural course of business with ethics and honesty sometimes not even in the same vehicle much less taking a back seat! Frankly, it amazes me how often we see business people treating others most certainly NOT as they themselves wish to be treated.
This business used to run on handshakes, people being true to their word, and actually living by a code of the West. I think it is long past time for people to get back to a more honest and ethical way of doing business.
Driving costs out of the building in the WCSB absolutely MUST be a team effort that includes ALL stakeholders. We currently have two or three sides agree clearly to what each will do but then spend hundreds of thousands of dollars crafting contracts to enforce those agreements. In addition to engineering, re-engineering, and re-re-engineering products destined for the oilfields of Alberta, these costs all add up. We are all familiar with using root cause analysis to identify underlying causes of issues, but we are not using that tool where we should. Instead, we are fusing the dialing for dollars approach. Every day, fabricators are asked to, “Shave off a few more dollars,” or, “Give a few more points off.” They are told to do whatever they can to help larger companies stay competitive. Many of these companies have far better profit margins than those of us in manufacturing. Fabricators in Alberta are being squeezed like never before, and the perspective seems to be we are the ones who have been extracting huge profits from the industry. Whether we are talking about atmospheric tanks, pressure vessels, or process modules, I can assure one and all that is simply NOT the case. Whether through layoffs and across the board wage reductions, process improvements, or acquiring machinery to help automate, fabricators in Alberta are doing everything they can to reduce costs and thereby offer a lower price. Plains Fabrication is available to share ways, very early in the design phase, to cut costs and help benefit everyone. Acting as fabrication consultants at the pre-feed stage and even earlier, we work closely with engineers and designers to help optimize materials and designs.
As overused as the concept is, we really do need to craft agreements and alliances where ALL parties’ benefit and none are disadvantaged. Plains Fabrication is very tightly focused on evolving business relationships to a higher plane, being open and transparent, and working with a spirit of collaboration. We continue to find those companies who wish to do the same, including producers, EPC’s, suppliers, and even competitors, and we will work with those who wish to operate in this type of business model. There will always be both optimistic and pessimistic views of virtually any situation. It is time to support optimism, create collaborative alliances, and work together to craft a better way forward. Let’s turn 2016 and 2017 into years of optimism and Canadian success.