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MANAGING COSTS

Two Entrepreneurs Plan for Higher Energy Costs

Manufacturers Bill Latham and Arthur Pascuzzi, both hit hard by previous spikes in energy costs, have permanently incorporated energy-saving strategies into their company culture.
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With summer gas prices steadily climbing toward $3 per gallon, according to the Energy Information Administration, many entrepreneurs who were hit hard by previous pump price spikes have permanently incorporated energy-saving strategies into their company culture.

For the last 35 years, Rita Henry an employee of Atlanta-based Lathem Time, had driven 70 miles to work every morning. That is, until gas prices rose so sharply she couldn't afford to do so. Her employer, Bill Lathem, the president and CEO of Lathem Time, a manufacturer of time clocks, door locks and electronic recorders, started a vanpooling program in 2004 as a result of the strain rising gas prices was having on his employees. Today, 23 percent of Lathem's 105 employees participate in the program either by self-arranged carpools, or by climbing into one of the two white vans Lathem provides.

On Friday's, Lathem encourages his employees to work from home via a teleworking system that redirects calls from the office to their homes. He calls the operation "seamless" and believes his employees are more productive when working from home one day a week.

Since the implementation of the vanpooling and teleworking, Lathem has also rearranged his factory work schedule. Georgia Power, the electricity provider for the region around Lathem's plant, has recently begun to charge more for electricity in the afternoon than in the morning, according to Lathem. Just as he listened and adapted to the needs of his employees, Lathem has set a schedule to eliminate unnecessary energy costs and waste.

"At five, it [costs] five times what it is in the morning," Lathem explained, which means the fabrication machines start "first thing," and most of the heavy power machines shut off before two in the afternoon. Since all the heavy machines are housed in one area of the 115,000 square-foot plant, Lathem closes off that area and turns off the lights. Overall, the adjustments have amounted to a 38 percent reduction in energy cost between April 2008 and April 2009.

"Gas prices seem to follow with energy costs," Lathem said, "and I can't pass that onto my customers or my suppliers."

Neither will Arthur Pascuzzi, the president of Milwaukee Crane, a crane and hoist company out of Portland, Or. Like Lathem, Pascuzzi adopted the 4-day commuter week. "The service guy comes in from 50 miles. It takes him about an hour. With four days at 10 hours a day, I just eliminated one of his gas days."

Pascuzzi sales are down 40 percent from last year and he expects to see tremendous gas increases in the future. Employees self-started a carpooling system and Pascuzzi, despite his personnel cuts, looks to the positive. "We are all trying to cheer each other up and hope things get better. I've done about all I can" to cut costs.

With summer well on its way, both Lathem and Pascuzzi plan to use their energy and gas frugally. "I don't want the cost of gas dipping into the salary and bonuses" of my employees, Lathem said. "I want to continue to reduce our carbon footprint."




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