Given that JSJ Corp.’s diversified manufacturing operations span North America, Mexico and China, Nelson Jacobson and the company’s board of directors are bracing for a period of acute political uncertainty. However, the chairman, president and CEO of the Grand Haven-based company fully expects to see “very significant growth — 20 percent plus” in 2017. That growth is coming off a record year this year in which JSJ’s sales were “well over” $500 million across its portfolio that includes GHSP Inc., Izzy+ and Dake Corp. Jacobson spoke with MiBiz about his outlook for the new year and how the political volatility influences the company’s plans.
What’s your outlook for 2017?
We make complex engineered solutions for a wide range of industries. We do it globally. In that context, what we still see is steady growth, relatively slow growth. The most significant is that automotive, which has been on a very significant growth path, far in excess of the general economy since the recession, we certainly see what we’re describing as a plateauing. It’s not a drop in volume on the vehicles we’re involved in, which are primarily the U.S. and Japanese car companies. It’s more of a plateauing. That will be more of an adjustment to seeing significant growth year over year.
Given that plateauing in automotive, what are your prospects for growth?
Overall, we still are optimistic about business in ’17. We’re having an all-time record year in ’16, we’ll have very significant growth — 20 percent plus — next year, but boy, it’s an uncertain journey. It never happens how we planned it. It’s in fits and starts. It just requires you to be nimble and focused. … The word we use most is that it’s very uncertain, but ultimately there is growth and opportunity there.
How do you handle that uncertainty that seems poised to ratchet up next year?
It requires management to be nimble and very agile and keep a very wide perspective on things. We have to be watching what’s happening on a fairly broad basis across a lot of different markets and a lot of geography.
Does that uncertainty change your strategy for capital expenditures in the new year?
We’re definitely being more thoughtful and judicious because we think there may be some additional variables out there. … We look hard at what are our commitment levels for capital and engineering. We’re a very engineering-intensive company. We looked at what was committed which will still provide us for growth, and what were our pursuits. I think we’re taking a more discerning look at what specifically are the programs, where are the programs, where are some of these risks with the threats of trade wars or rescinding trade agreements and how could that impact us.
With JSJ’s global reach, how are you thinking about Trump’s isolationism and anti-NAFTA rhetoric?
(We’re asking) what will happen given the election with a lot of the noise about ripping up trade agreements. Is that rhetoric? How real is it and how significant is it?
What has NAFTA and global trade meant for JSJ?
Certainly, there’s always an opportunity to refine trade agreements. But inherently, our belief is that NAFTA has been very good for everybody. There was so much inefficiency before. … Today, you can go from Mexico City to Montreal, Quebec nonstop. I’m just a real strong believer in global trade, and ultimately there’s good work to be found and the right type of work to be found in all locations. Under this period, we’ve grown our employment dramatically right here in West Michigan — and for very high-paying jobs.
On the other hand, Trump seems to be taking a pro-business approach to policy and his cabinet. How will that influence the economy?
I think it is going to be pro-business. If there is a draw-down on regulation, and getting some of the things that aren’t adding value out, that would be good. I really hope that we have an opportunity to redirect funds into education and training. We’re in desperate need of skilled workforces at the floor level, machinists and toolmakers and engineers.
With the duality of uncertainty and a pro-business administration, what does your crystal ball for the economy look like?
I think it’s going to stay fairly strong. For a durable goods manufacturer and an engineered products company like ourselves, having 2- to 3- to 4-percent growth is actually really good. Really fast growth can be hard and overwhelming given the complexity of our supply chains and the needs and complexity of supplying the customers.
The Fed just raised interest rates by a quarter point and all signs seem to point to additional modest raises next year. How does that affect your decision making?
It can go up a point or two points, and I don’t know that it would make one bit of difference in anything we do. That’s way down (the list of concerns). It’s the uncertainty, a trade war or other things. Interest rates are just not the constraint for us.
Looking ahead to 2017, what’s keeping you up at night?
It’s the uncertainty. I’m looking out for thousands of employees and families globally and (wondering) how does that affect them. Is it rhetoric or is it real? How will it affect us? … We had a great November. We’re going to finish the year strong and already where we have some visibility, the first quarter looks good. The question is where do we invest. … We’re really thinking hard about how are we ensuring that we’re getting the correct vision and assessment on all the opportunities that are out there so we can be flexible and nimble in this world. As things will change pretty dramatically, (we want to) be able to take advantage of them.