Good times in the city by the bay

I like San Francisco. Haven't left my heart there, but this great city fills a place in my heart for all the wonderful visits I have made there over the years. Yes, it has problems, like all major cities in the USA, one of which is an abundance of "street people." Call them vagrants, homeless, panhandlers, or what you will, they are all over the center of the city, seemingly congregating where tourists locate, like the hotels.

For the most part they are easy to ignore, but occasionally you run into a persistent one who manages to irritate you by not leaving you alone. I suppose this is a ploy to get a handout; whatever, it is really aggravating.

One night last week I was standing in front of my hotel talking with two business acquaintances when one of these pests sidled up to us, occupying my space, and refusing to take "no" for an answer hung around listening to our discussion, which we continued in hopes he would leave. Big mistake. This guy was more than a pest, he was a pain, and he had attitude, expressing his unasked opinion of the Presidency, Congress, the state of the nation and war in Afghanistan. The problem was the guy was right, and if he hadn't been panhandling we might have invited him to express his opinion as these were the very subjects we were discussing.

You can't escape these people as they are everywhere, even in front of the Moscone Center where we were convening the Photonics West show. However, the second day of the show Apple and Steve Jobs showed up to introduce the new iPad and the city police cleared a four-block area around the halls so that the multitude of news media covering the Apple announcement would not see these vagrants as a metaphor for unemployment problems in our country. I was glad that the unwanted and uninvited eavesdropper from the previous night wasn't in the area; otherwise he might have made the six o'clock news.

Inside Moscone in two large halls were about 1200 exhibitors showing products for the photonics industry. Among these were a few, perhaps a couple dozen, who have laser products that are used in industrial applications and therefore targets for yours truly.

Photonics West is by its timing the first important show of the year, and as such it's populated, for the most part, by sales and marketing people who see the new year as a fresh page in their sales books and therefore most news generated is good news. I always temper my comments on the upbeat nature of this show by this observation; it's hard to be negative when you have 11 months more to make good things happen.

For the most part exhibitors I interviewed were optimistic that the recession had bottomed and that business was starting a long climb back to prosperity. Many of those I spoke with were already feeling the effects of a surge in spending by the global semiconductor industry, resurgence in the solar power sector, and a reversal of decline in the medical devices market.

Some laser suppliers are scratching to ramp up their lean manufacturing operations to meet stringent demands from certain Asian market sectors for expedited product deliveries. What took a year to complete a sale was now overwhelmed by demands for expedited deliveries. Problem is that many of the laser companies are so lean that they have no inventory and only a skeleton crew to assemble products. Their suppliers are also leaned down and several spoke about their purchasing agents scrambling to get material and sub-components, common occurrence. It's a problem we had discussed last year as a nice problem to have. Now that it is happening it's not as nice as we dreamed back then.

But the suppliers are coping and many are adding back employees let go last year and some are advertising for and adding new hires. Those who used overtime to compensate find that it is now uneconomic to do and new hires turn out to be more economically effective.

The most common comment we received when asking aobut the year to come was that the companies are waiting until the end of the first quarter to gain assurance that the market recovery is real and has legs. "Talk to me in March" was a frequent answer I got to my question about the rebound. However, it is clear that underlying this answer was the feeling that we are recovering, even a little faster than planned. As I told my audience at last Monday's Marketplace Seminar, my 9% increase for 2010 might be a little conservative and that with not much more impetus we might see this climb to double digits. Of course, we are moving from a -30% last year so it doesn't take many new orders to get to +10%.

We left San Francisco in a good mood, buoyed by the new business that is raising backlogs. Now if we can get the high-power laser market to rebound faster, 2010 might end up with surprisingly good numbers.