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Sunday, 10 May 2015 22:00

Q&A: Krista DeJonge, president, Western Michigan chapter, Financial Executives International

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Krista DeJonge Krista DeJonge COURTESY PHOTO

A career-long financial executive, Krista DeJonge knows the importance of maintaining a strong network of advisers and colleagues to stay on top of changing industry trends. As the president of the Western Michigan Chapter of Financial Executives International (FEI), DeJonge helps connect other local executives to the resources they need to drive growth within their companies. FEI houses 74 chapters throughout the U.S. – including two branches in Michigan – as well as a national organization. DeJonge also serves as CFO for the Lansing-based Air Lift Co., a manufacturer of suspension systems for trucks, vans and RVs.  After serving as a judge for this year’s CFO of the Year Awards, DeJonge spoke with MiBiz about FEI and trends impacting regional financial executives.

What does FEI bring to the table for its members?

The biggest thing it brings is networking. We have members but we also have strategic partners such as Comerica and BDO. At our monthly meetings, we all get together and talk about best practices. I reach out to members of the group right now when I run into a business issue or (want to) understand how another business is handling legalization of marijuana. I’ll reach out to them and ask if they’ve established a formal policy around it and, if so, is it something I can leverage. It’s really a soundboard of peers. At every organization, you might have a couple of senior finance folks, but you only have one CFO, so it’s a channel by which CFOs can get together with their peers and share those types of ideas.

As many companies continue to add capacity as the economy improves, what are you seeing as far as the access to capital is concerned?

It’s a great time to invest right now. The market is doing significantly better than it was 12 to 24 months ago. With the combination of the current (market) growth and cheap borrowing rates, it’s an ideal time for CFOs to jump on that and invest in the future. Whether that be infrastructure, buildings, tech or people.

Where are you seeing a lot of that capital expenditure and investment going?

I think it’s almost equal and depends on what the strengths of the organization were 12 to 24 months ago. At my company, for example, we’re just completing a 40,000-square-foot addition so we’re taking advantage of the current status by expanding so that we have the capacity for the future. But we are also investing a lot in our people.

Do you expect to see more deals occurring given the access to relatively cheap debt?

I think it will, but to be honest, I see more organic growth being fueled rather than M&A. We had a couple of years there where a lot of investment was put on hold to be able to fluctuate with the economy. Now with the economy back on the upturn, people are making up for some of the internal investments they held off on. There’s a lot of opportunities to capitalize on where historically a lot of folks had capped out internally and that’s why they looked to the M&A market.

Where do you see interest rates moving in the future?

I think for the next six to 12 months, they’re going to remain fairly consistent with where they’re at. I do think in the next two to three years, we’ll start to see debt rates go up, but I think they’ll still be very favorable compared to the cost of equity. (But) we have many years in front of us where debt is going to be a very positive investment tool.

What are some challenges that you’re seeing as a CFO?

The biggest challenge right now is definitely hiring and retaining talent. That impacts everything throughout the organization. If I have to pay a premium to get a welder in, you have a blue-collar hourly person that can demand as much as a college grad. You’re certainly paying more to get the talent that’s required to sustain your organization. That’s where I think investing in your culture becomes so important.

What about managing rising health care costs?

We are actually looking at innovative insurance models that include portions of self-coverage and stop-loss coverage versus being fully insured, and then focusing on wellness programs to positively benefit employees who make healthy life choices. But you have to be careful because there are legal ramifications for creating those innovative models. You’re relying on experts in the field, your counsel and insurance brokers to ensure that you’re making policies that are sustainable.

Interview conducted and condensed by John Wiegand.

Read 3768 times Last modified on Sunday, 10 May 2015 21:19

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