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SAN DIEGO
WEATHER FOR ELA’S 42ND ANNUAL CONVENTION REFLECTS THE STATE
OF THE INDUSTRY Bylines:
Lingering Fog plagues Big Ticket leasing.
Patchy Sun teases
the Middle Market segment of the Industry. Small Ticket
& Vendor lessors warm up to clear & sunny skies. By PAUL MENZEL,
CLP LEASING NEWS SAN DIEGO, CA - The
City that is known for perpetual sunshine reminded leasing professionals
from around the Country that change is a constant. Every attendee was looking for signs of positive economic growth to break the chill
that they have been enduring for the last two years. Overcast skies opened the convention on Saturday, but warm sunshine
emerged by the end of the meeting on Wednesday. The fluctuating weather of San Diego served
as a fitting backdrop for the release of the “2003 State of the Industry
Report” by the Equipment Leasing and Finance Foundation. Tom Peters and Michael Treacy
shared their secrets for achieving growth regardless of the economic
conditions. Ben Stein, actor and economist, provided balance with a flood of jokes
and life chronicles. The estimated
1150 individuals in attendance were as diverse as the industry’s prospects. Approximately 430 different companies represented
all segments of the market. Attendance
by individuals was down by only 5% from last year but higher than two
years ago. The number of companies
represented was equal to last year and up 15% over 2001. ELA membership, down approximately 10% from
the prior year, is stronger than forecasted by the Association’s leadership.
The largest segment and greatest growth in membership is in the
smaller size companies and lowest dues paying category. The foggiest prospects
continue to be reported by the Large
Ticket leasing segment. Thomas M. Jaschik, LaSalle National Leasing
Corporation, reported to the ELA Board of Directors that change is in
the air. The equity markets are
static to declining; low bank debt rates provide a formidable alternative
for lessees; attacks on off-balance sheet treatment and synthetic structures
are a continuing threat; Basil II Accord confounds the future for many;
consolidation and contraction continue.
Michael Fleming, ELA President, reminded
everyone that the hallmark and strength of the industry is adapting
to change with creativity and innovation.
David Merrill, Fifth Third Leasing Company, reported cautious optimism for Middle Market leasing. The legislative tax changes affecting leverage
leases also serve as a threat to this segment. The average size of the mid-ticket lease has
dropped. The trucking industry
is again active; construction shows pent-up demand, manufacturing is
only replacing equipment; technology is indicating recovery from the
Y2K hangover. Portfolios are not being sold in order to preserve
income and profitability through static growth. Worries about a “false start’ in the economy
abound. Service Providers, represented by John McCue
of McCue Systems Inc., reported 261 attendees.
Exhibitors found a warm and friendly reception with shopping
activity picking up. Consolidation
in the information and technology group continues.
Outsourcing of attendant processes and systems is a growing trend
among businesses in general and financial institutions in particular. Small Ticket Vendors, as reported by Paul
Frechette of Key Equipment Finance, is seeing increased collaboration
between lessors and equipment vendors.
New production is characterized as “hopeful”. Yours truly, as Chairman of the Small Ticket Throughout the conference,
the general mood was upbeat and reflected the conference theme of “TRUST IN EXCELLENCE’. Edward
Dahlka, Chairman of the ELA and LaSalle National Leasing Corp.,
opened the gathering with a report that ELA is “financially strong”. He also reported that “the survivors have used
the economic pause to become faster, leaner, and more focused in operations.”
Ed went on to tell attendees that “change creates opportunity
and our industry has always thrived in such times.”
The Association will spend almost $2 Million on “advocacy” as
it represents our industry in shaping positive change in the face of
increased regulation and homogenization … serious threat to all of our
business models. Donations to
the ELA LeasePAC are critical to our success in government relations
at the Federal and State levels. In
the end, Chairman Dahlka reminded us that “Community is created through
vulnerability.” Tom Peters,
of “In Search of Excellence” fame, waxed sage by opening the general
session with his talk entitled “Business
Excellence for a Disruptive Age”. His message was the “replace apathy
and whining with commitment”. He
shared some quotes of others that he espouses below.
Presentation slides available at TomPeters.com. “Uncertainty is the
only thing to be sure of.” Anthony Muck, Citigroup Asset Mgmt “If you don’t
like change, you’re going to like irrelevance even less.” General Eric Shuseki, Chief of Staff, US Army “Innovation not Optimization.
We have shifted from a Service Economy to an ‘Experience’ Economy”
Tom Peters “75% of all administrative
functions, H.R., and backroom processes will be outsourced and digitized
in the next three years.” Jeffrey Imelt, GE “Don’t own nothing
if you can help it. If you can you should
rent your shoes.” Forrest Gump ‘The sun is breaking
through” Paul Menzel reporting. Paul J. Menzel, CLP Senior Vice President
Community Bank Lending
Group SANTA BARBARA BANK
& TRUST P.O. Box 60607 Santa Barbara, CA
93160-0607 1 South Los Carneros
Road Santa Barbara, CA
93117 Dir Ph# (805)560-1650 Email PaulM@sbbt.com Mailcode: #67
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