2010 Manufacturing Sector CFO Outlook

There are some key statistics noted in Bank of America’s annual Manufacturing Sector survey. If you are in that sector, it’s a great read to understand what skills will be in demand in the upcoming year. A caveat … 78% of the respondents were privately-owned companies.

More than 62% of the CFOs surveyed indicated they plan to maintain their current workforce size. Of the remaining respondents, 28% will be hiring and 9% will be downsizing. If you’re a high-value target and seeking an opportunity … none of these numbers really matter. There are always opportunities when you can take away a company’s pain/problems/challenges and help them grow.

So what skill sets, along with measurable proof of positive impact, will manufacturing companies be seeking in their finance executives? Here’s my take.

M&A. Twenty-five (25%) percent of the private companies expect to participate in a merger or acquisition, while 37% of public companies anticipate M&A activities.

Strong financing acumen within cash management, letters of credit, and asset management (as the top 3). Other financial product knowledge includes asset-based financing, cash flow financing, foreign exchange, and retirement plan services.

Working capital and capital expenditure are the top two needs cited.

Revenue growth and cash flow are the two primary financial concerns of manufacturing CFOs.

Who’s hiring? According to the survey, it is those companies who are expecting M&A activity, primarily in the west, with revenues between $500 million and $2 billion.

CFOs and Job Security

In a list of top concerns of CFO’s, CFO.com’scarticle “What Keeps CFOs Up at Night” listed personal job security as #10 out of 10 top internal concerns. Given the fact that job security made the Top 10 list, this comment in the article is interesting to me:

“CFOs appear confident that their services will be necessary to guide their businesses through these tough times: they place personal job security last on the list of concerns.”

While CFO services ARE necessary, the average tenure of a CFO is still three years and declining. Job security is only as good as his daily performance and as far as the company’s next merger, acquisition, cash flow crises, or flat profits.

My question is, are CFOs really not concerned or are they in denial? Is it perception, or reality? Any thoughts?