I've been reading that Citi is boosting their credit card rate up towards 30% for millions of accounts -- even those with good standing!
This smacks of a credit panic. Apparently the default rates for various card types is now so great that Citi wants out of the business, just like Advanta.
Apparently Citi is also backing out of oil company linked/branded deals.
Since Citi is such a major player it is reasonable to assume that their situation accurately represents the nation as a whole.
Beyond credit cards, it is apparent that bank lending to businesses is contracting nationally by huge amounts. Since so much of our business is supported by the credit markets one must take defensive measures.
The greatest peril right now is extending credit to general contractors. The risk is that one fine day the GC runs off/ folds leaving your billings unpaid. If you were depending on their payment so that you could pay your bills -- then it's all over for you.
The habit for most EC's is to lay off field employees and preserve the office jobs. I predict that it will become essential for you to curtail headquarters staff -- a very painful step.
Chasing bids with more aggressive pricing will prove fatal. Concentrating on sales/contract volume will kill you.
Your field crews are well aware of the contraction. The trouble is, from their point of view, dragging their feet and otherwise slowing down the job seems like the best way to maintain their income. Job completion is equated with a layoff. Hence, job cost overruns are breaking out like a rash all over America.
I've seen this with my own troops at all levels of seniority!
Hence now is the time to get out into the field and ramrod contracts towards the close.
