Brown Deer-based Badger Meter Inc. has shifted to a four-day work week in an effort to control costs in response to business slowdown related to the coronavirus outbreak.
The maker of water meters and other flow instrumentation products is also cutting executive pay 20%, implementing discretionary spending controls and reducing defined contributions to its employee savings and stock ownership plan.
The cuts will initially be in place for five weeks and are intended to be temporary. Robert Wrocklage, chief financial officer of Badger Meter, said the company is in regular contact with its customers and using that information to make decisions daily or even hourly about the business.
“The way that we’ve designed this is to keep our entire workforce,” said Ken Bockhorst, chairman, president and chief executive officer of Badger Meter.
He added that he has been pleased with the company’s execution – sales increased 3.4% in the first quarter and earnings improved 10.8%.
“it is important we maintain our talented team to ramp back up to serve customers,” Bockhorst said
The reduced work week applies to all of Badger Meter’s U.S. operations and facilities in other countries are taking similar actions. While Bockhorst said the company wouldn’t make cuts in its research and development department, he added it was important to be fair and equitable to all employees.
“It is critically important for us, I feel, to continue to invest during the downturn,” he said, expressing confidence Badger Meter’s engineering teams would still be able to complete key product development projects on time despite working reduced hours.
Most of Badger Meter’s customer are municipal utilities. The challenge they are facing is a matter of ability to do work because of stay-at-home orders.
“We’re not seeing budget cuts and we’re not seeing cancellations,” Bockhorst said, noting there have been some order deferrals.
He noted many utilities have been led by the same person for years, including in prior downturns. While municipalities might cut back on some equipment spending, they do need to keep their essential water functions running. That leads utility leaders to express confidence in their budgets staying intact.
“That’s a pretty strong indicator to me,” Bockhorst said of future demand.
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