Exclusive outtakes from industry leaders
Corning CFO and the economist who predicted 8 of the past 4 recessions
The chief financial officer of Corning glass, James Flaws, told the Reuters Global Technology Summit in New York that he read from the 158-year-old company’s official history and drew on his own experience to explain to younger managers what these downturns mean.
The first lesson is that economic predictions are hard.
“We don’t have an economist. We used to have one and he predicted eight out of the last four recessions,” Flaws said with dry humor.
The second lesson is that — at least at Corning — things have been tough before. This year, all merit increases were frozen.
“I actually worked here in the ’80s when we cut everybody’s pay,” he said. And during the recession of 1975, shortly after he joined the company, the company fired 25 percent of its management.
“Unfortunately they did that on a Friday night. It was really bad,” he said.
He touched on recessions in the 1990s and the tech crash of 2001, but said that this recession seems most to him like that of the early 1980s — which until now was always described as the worst downturn since the Great Depression of the 1930s.
“That was a classic W,” he said in reference to the use of a letter to describe the roller coaster economy of the early 1980s.
“It was like this and then about six months later you had the second one. It was very widespread. Unemployment climbed above 10 percent and affected a lot of different industries.”
Flaws said that he is not predicting that this will be a double-dip recession — but his company is preparing, just in case.