Blog Post

FEI Louisville survey outlines the COVID-19 impact on local members and companies

Terry McWilliams • May 19, 2020

Searching for the best path to reach the other side of the pandemic

LOUISVILLE (May 19, 2020) - Since its appearance, COVID-19 has blazed an unprecedented trail of medical mayhem and economic destruction. In the United States, the pandemic has infected more than one million people, and tens of thousands of Americans have perished. Measures to mitigate its spread have handcuffed commerce, resulting in the highest job losses since the Great Depression.

People are hurting. Business is suffering. All across the country, owners and executives are searching for the best path forward in the struggle to reach the other side of the pandemic.

That's also true in Kentuckiana, based on the results of a survey conducted by the Louisville chapter of Financial Executives International. FEI Louisville asked its 80-plus members and community CFOs to assess the impacts.

We wanted to know: Is your business facing liquidity issues? Are supply chains working? What steps have you taken to combat your way through this? What have you learned -- and when will we get back to normal?

The results from the online and email survey, which took place from mid-April through early May, are not statistically representative but provide insights into the breadth of difficulties Louisville executives are facing and how they are coping.

The bottom line: They are concerned for their employees - keeping them secure, keeping their talents available. They worry about disrupted collections and cash flow. They want to keep processes running and efficient in the midst of social distancing, supply chain and transportation issues. Uncertainty is disarming. In the face of the pandemic, they've found better ways to do things. They've seen successes with remote work and face-to-face video communication. Many are using existing resources more efficiently and in unexpected ways.

While many are critical of the government response to COVID-19, they're divided on when - if at all - society will return to "normal."

Who participated in the survey

Nine industry groups were represented, divided roughly among manufacturing, food service, distribution, banking/finance, technology, utility, construction, healthcare and professional services companies. Nearly half had 500 or more employees; 35% had between 51-200 employees. Of the executives who participated, 35% were FEI members more than 5 years; 38% less than 5 years. The rest were non-member financial executives in the community.

Liquidity, financial stress and sales impacts

More than half (56%) said COVID-19 brought financial stresses or liquidity issues, with 48% reporting lower sales.

"No sales," one person lamented. Remarked another: "Manufacturing has ceased except for essential orders. Global supply chain problems."

Said another about the company's one-third drop in sales: "Schools are closed. Restaurants are operating at a fraction of capacity."

Regarding supply chains, six in 10 had difficulties due to the inability of domestic and/or foreign suppliers to fulfill orders or problems with transportation. Others had issues obtaining raw materials or commodities.

The news wasn't bad for everyone. 20% of the executives said their companies were experiencing greater demand and sales because of the nature of their services or products.

Facing the most important issues

The biggest worry the CFOs cited was the economic and financial impact. Having sufficient liquidity, collecting cash and worrying about the ability of customers to pay were frequently mentioned.

Employee issues were another key focus. Leaders talked of the need to keep in place core staff and mission-critical employees.

"Ensuring we keep our employees employed, serving our customers, and coming out strong to continue our double-digit growth," one finance executive wrote. Still other comments cited the need to proactively take care of associates, balance production needs with employee safety and even worrying about employees working from home who may contract the virus.

Maintaining production and service levels also got CFO attention. "Long term, the redesign of work to facilitate social distancing without the frustration and productivity loss (currently) experienced," one said.

Another observed that his company was less efficient working from home because certain activities such as R&D have to be scaled back. Another company is handcuffed by the inability to reopen locations.

Still others lamented the difficulties of planning and operating in a pandemic. "You can't plan for things like this. Everyone has risk back-up plans, but this is unprecedented and we cannot go forward based on fear," one said.

"No one likes uncertainty."

Responding to COVID in the workplace

Nearly 9 in 10 allowed all or some of their employees to work from home.

"Employees are working from home where possible or on a reduced/staggered in-the-office schedule," said one executive. "We are finally able to fill previously open positions given the number of other companies who have laid off staff."

Six in 10 people said their companies cut non-payroll expenses; 25% also reduced or eliminated staff. Half have applied for federal payroll assistance and another quarter sought SBA or other funding.

New business practices executives will keep

Most financial executives found that employees can perform in places other than the traditional office.

"Working remotely has 'worked' better than I thought. Productivity seems to be high, even in the face of unparalleled challenges," one wrote, echoing the comments of many others. "Zoom turned out to be a nice tool that we use in the future."

Video has helped executives communicate. More than 9 of 10 increased their use of video meeting software such as Zoom or WebEx for internal discussions. 75% said they were using it more for external meetings with bankers, customers, suppliers and others. 73% said they were staging more conference calls than before.

Others mentioned they'll continue to laser focus on costs and cash flow, and capital sources.

Observations varied on the government's handling of the pandemic

Executives were divided on their assessment of how federal and state governments have responded to COVID-19.

Many praised Kentucky Governor Andy Beshear's handling of the virus response. "Kentucky has set the standard. The national response has been horrific." Others chided the state for not opening more quickly. "We can't just live around this virus when so many other issues for people's lives are at risk," said another.

On the federal level, there was a diversity of opinion. "These policies assume a short-term economic hit with a duration of 30-90 days. They are aimed at keeping people in current jobs through that period...These policies are just postponing the realignment of the workforce to the new reality and creating a massive public debt. Nobody knows what the impact of all this money being poured into the economy this fast will have."

Another said the federal unemployment offering has "made it difficult to find quality help," while still another called the federal response "confusing at best, with mixed signals that probably cost precious time and possibly lives."

One financial executive summed up: "I wish our economy could be spared but I know that is nonsense and we all have to sacrifice. Some in major ways."

When are things returning to normal?

"Normal may never happen again," said one, "but hopefully a return to a near normal operating environment."

In the survey, 15% thought that would happen in the third quarter of this year; 35% said the fourth quarter. Another 27% thought it would happen sometime in 2021. Nearly a quarter of the executives thinks the "old normal" will never be back.

"I expect a slow re-opening of the economy, in sectors or waves, but with an ongoing focus on social distancing, personal protective gear and work-from-home. Absent a vaccine, I expect re-emergences of the virus, with necessary local quarantines possible for the foreseeable future."

Click here for a PDF of detailed survey results.

About FEI Louisville

The Louisville chapter of Financial Executives International has been an integral resource for senior financial executives for more than 75 years, representing members from private and public companies, universities, associations and foundations. As part of a 10,000-strong national organization, FEI Louisville helps ﬁnancial executives make informed business decisions, promotes ethical leadership, provides insightful programs and offers networking opportunities for CFOs, treasurers and controllers. Our national organization monitors legislative and regulatory issues impacting CFOs and offers online networking and career development capabilities. FEI Louisville provides a calendar of COVID-19 related webinars and websites from banking, accounting, HR, insurance, legal and employee recruiting resources. Visit www.FEILouisville.org for more information, call 502.410.2113 or email FEILouisville@gmail.com. The national FEI website is www.financialexecutives.org.

FEI Contacts

Terry McWilliams, chapter administrator. 502.410.2113, FEILouisville@gmail.com or terrym (at) mozaicir.com
Matt Monteiro, FEI Louisville president, 502.386.3815 or matt@bulletproof-finance.com.

About the Author

The chapter administrator for FEI Louisville, Terry McWilliams is a veteran financial communications professional based in his hometown of Louisville, a city well known for its bourbon, horse racing, fried chicken, basketball and Muhammad Ali. McWilliams is president of Mozaic Investor Relations, an IR communications consultancy he founded in 1997 serving regional public companies and other clients. In 2004 he launched a series of state-focused equity conferences that provided investor forums for CEOs and CFOs. McWilliams began his career as a newspaper reporter, working for dailies in Kentucky, Tennessee and New Jersey and contributing to The Wall Street Journal, USA Today and, Investor Relations Magazine. He has cross-border experience through engagements in London and Tokyo and has been involved with professional organizations related to communication, real estate and finance. He earned a Masters of Business Administration from the University of Tennessee and a bachelor degree in journalism from the University of Kentucky.

FEI COVID news release (PDF) Survey Results Detail (PDF)

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