XACT Company Director holds positive outlook despite anticipated postponed oil and gas projects

Larry Amos is part-owner and director of Calgary-based electronics engineering company, XACT Engineering Manufacturing Solutions. The privately owned company is tied to oil and gas markets, producing tools and equipment used for drilling and fracking. The Calgary Journal’s Jordan Kroschinsky caught up with Amos via email. The Q&A has been edited for length and clarity.

How did you arrive in this field?

I was always taking electronics apart. I can probably tell you every component that goes into a Walkman and while that’s not a life skill, I suppose that the manufacturing aspect of electronics has always interested me. 

How lucrative was it? Were you able to thrive based on a thriving oil/gas industry?

Our business has been in a constant state of evolution which has led us into different markets and we build a variety of products for many industries. I would say that it was easier to get into the business back in the early 2000s as everyone had access to the same products, and overall overhead costs were lower. Since then, the industry has been faced with new regulations, ratings, labour cost and quality improvements all while being asked to reduce prices to the customer.

At what point did you realize your stock profile, and business would suffer based on the economic drop?

I went to a Petroleum Services Association of Canada conference a couple of months prior to the downturn where they were talking about capital spending for 2015 and it didn’t seem like it was “We should be using this time to learn something new so we come out of this a little bit better than we went into it.”

– Larry Amos, Director of XACT going to be too bad. Then, I was in a sales meeting a few days later where it was brought up that it’s becoming difficult to get in to see people in the oil and gas industry.
It seemed like all of a sudden our customers were cutting back and that projects were getting put on hold or canceled. Fortunately this downturn has opened up a lot of investment opportunities.

How does it compare to previous downturns?

I think that a lot of companies have gotten leaner and smarter. Other than that, not much else is different.

How has this affected your lifestyle?

Well I’ve been holding back on purchasing a new car as well as a condo in Mexico — first world Larry Amos says it’s important to take advantage of this bust to reevaluate and refocus the internal components to businesses.

Photo by Jordan Kroschinskyproblems. I’ve been focusing all of my extra money into buying stocks as most of the companies in the oil and gas industry are at their lowest prices right now so I’m getting more for my money in that sense. Again this is temporary so I know that the stocks I’ve purchased will be worth a lot in fairly short order. I also believe that you should have at least three months of your salary available in savings or an investment that you are able to draw from quickly so a car or a vacation property is not likely the best investment for me.

How do you work through the stress of a downturn while managing investments in a responsible and confident fashion?

I view the stock market the same way people view gambling so I don’t play with more than I can afford to lose. And I’m not really stressed about this downturn as I try not to stress about things that I cannot control.{cbrelatedarticle show=”right” ids=”2666,2691,2670″ /}

How do you build trust and communication in a time of instability between you and fellow co-workers?

Honestly there isn’t much that we can tell people as it changes every day. We just remain open and honest with [employees]. We have also applied to the Work-Share program with the Alberta unemployment office so that we can avoid further layoffs

*Work-Sharing is a mutual agreement between the employer, employee and Service Canada to a reduced work schedule to share the available work over a period of time. The measure provides income support to employees eligible for Employment Insurance benefits who work a temporarily reduced workweek while their employer recovers. – Government of Canada.

How are postponed projects in the oil and gas industry affecting your company’s overall productivity?

We’ve adjusted our budget to reflect a lower revenue stream; therefore, we were forced to be a little more conservative in our spending. Fortunately the downturn is also an excellent opportunity to acquire services that are otherwise expensive or have long wait times so we’ve been taking advantage by renegotiating for certain projects with vendors and contractors. We are also faced with a challenge of most larger oil and gas companies asking for discounts to help them through this downturn so that’s hindering some of our growth for 2015.

What’s your plan going forward?

We at XACT are using this time to evaluate, refocus, diversify, and implement process changes, which will allow us to continue to lean out our business that will ultimately benefit our customers. I think it’s important to realize that this downturn is temporary and it won’t be the last. We should be using this time to learn something new so that we come out of this a little bit better than we went into it.

jkroschinsky@cjournal.ca

Read this Calgary Journal special report for an in-depth comparison between Jim Prentice’s response to the current drop in oil prices and Don Getty’s response in the 1980s.