Darwin Hits Wallstreet

America’s auto industry is not in trouble. There are plenty of domestic plants that are going full steam ahead. The airline industry is not in trouble – just the older airlines that are locked into union contracts and have to maintain outdated fleets. While DHL has stopped its domestic business, companies like FGX are taking over market share and growing. What does all this mean? That Darwin has finally come to the business world. The business dinosaurs are dying. In their place is a new kind of company, running leaner, providing better products at a lower cost, and growing.

On November 17, 2008, Honda officially dedicated its new auto plant that began producing its the fuel-efficient, 4-cylinder Honda Civic Sedan. At a time when U.S. automakers are asking for a bailout, Honda is planning to open yet another plant in 2009 that could eventually reach annual production of 300,000 vehicles and help take Honda’s total North American output close to 1.8 million vehicles a year—roughly the same as Toyota. These are U.S. auto manufacturers, employing U.S. auto workers, and they are growing.

While other airlines continue to struggle, JetBlue has shown an increase same month seats over November 2007 with almost every airport other than JFK. While Delta cut w,000 jobs, and American Airlines and its feeder carrier American Eagle plan to cut capacity 6 percent next year, with an 8.5 reduction in U.S. flying by American itself, Southwest Airlines announced that “October was a bang-up month, almost unexplainably strong,” according to chairman and chief executive Gary Kelly. While DHL announced a pullback from the United States and while UPS announced a price increase to cover its costs, upstart First Global Xpress is expanding its operations and growing as an International shipping company.

It is not that American industry is failing across the board. It is that the older companies that refuse to re-tool, to update their processes, and who refuse to revisit their products and services to make sure they are responding to the changing needs of today’s customers and clients. Take for example, a company like First Global Xpress [FGX]. They entered the shipping industry by looking at how companies like Fedex, UPS and DHL were doing business, and by quickly realizing the Hub & Spoke model these companies employed was a fantastic idea in 1970. However, with new communication platforms, with more airlines carrying cargo to supplement revenues, and with more local messenger services available to work with, the old model was far inferior in providing service and far more expensive than it needed to be.

The result for FGX is growth. Better still, with their less expensive process, they are gaining even greater market share in this down economy. When companies are looking for ways to reduce expenses, FGX is a Godsend. Welcome to the new economy – it may not be as bad in the long term as we all think...