If you went into this past weekend hoping that $700-billion bailout of financial institutions in the United States would become reality, it appears you may get your wish as Congress considers today what may be an economic necessity in order to avoid total collapse.
If you’re expecting that aid to be the end of the current economic crisis, think again. As Congress was to begin voting on the package today, three European banks required rescue and another looked to be on the verge of a state rescue, while stocks on that side of the ocean began to fall after losses in Asia.
About the same time, it was announced that Citigroup had taken control of Wachovia’s banking operations, a move that could very well affect the future of the Wachovia Championship on the PGA Tour which, among other professional tours, must be concerned with the future state of tournament sponsorships.
Whatever form this bailout package takes when it becomes reality, it can only be looked upon as a stopgap, not a solution. As the events in Europe and Asia illustrated, the economy is more global than in past economic downturns, so the question is not about if the economy goes sour, but to what degree?
“Right now, the challenge is to really understand how bad it’s going to get,” said Doug Hawken, president and chief operating officer for Ping Golf, when he was at the Canadian operation in Oakville, Ont., last week.
“We’ve weathered this year and I think some other companies, though flat, have weathered the year, but I think there’s a lot of concern about next year and how the government deals with this, in helping correct the situation and how it actually pans out, will have a big impact on disposable income and the confidence to spend it.”
Of course, you’re talking golf’s mojo, it’s life force, when you bring up disposable income. It may be a completely different world by the time Canadian golf courses open their fairways for play in 2009.
Admittedly, Hawken is focused on club manufacturing, but a tightening of disposable income starts a domino effect that includes all aspects of the game from rounds played to food and beverage to pro shop sales to travel.
If that tired old Canadian opinion that this is an American dilemma and doesn’t affect us still exists, consider that 70 to 75 per cent of this country’s exports are to the United States.
“I think we’re in for a couple of tough years where good, managed companies that have a little cash are going to be able to weather it, but those that are out there on the edge are in for some rough road,” said Hawken.
That holds true for all aspects of golf. For his part, Hawken works for a family-run business that doesn’t feel the pressures of outside influences such as stockholders when decisions that affect the company are being made.
“I think in a privately-held company, even in good times or bad times, you’re able to make decisions from a more long-term perspective than meeting some quarterly number of target or quota. I think we’re in a great position,” said Hawken. “We’re fortunate because the entire family – the board consists of family members – are very much engaged in the business, very much understands the business and are very realistic about any expectations. The whole leadership team together are confident that we’ll weather this together. We don’t have unrealistic expectations and we’ll manage within those,” he said.
That sounds like sage advice, no matter which aspect of the golf industry one works in.