Wall Street's troubles trickle down
Sunday night, Eduard Slinin, the owner of Brooklyn-based limo service
Corporate Transportation Group, was watching television when he heard news Lehman Brothers might file for bankruptcy.
“I was afraid and worried. Lehman is one of my biggest clients,” says Slinin, whose business services financial firms on Wall Street, driving everyone from top executives to investment bankers to their destinations.
On Monday morning, Slinin’s worse fears turned out to be a reality. Lehman Brothers had filed for bankruptcy.
“I’ve been in this business for 28 years and I never would have thought something like this could happen,” he says. “We went through the ’87 crash. The 2001 crisis. This is the worst.”
The storm that’s raining down on what were once Wall Street titans is also soaking some small business owners who rely on major financial sector companies for their livelihoods.
For most business owners throughout the country with few ties to the financial world, the havoc on the Street will have little impact, says Bill Dunkelberg, chief economist for the
National Federation of Independent Business. That is, unless consumer spending is significantly derailed as a result.
But for entrepreneurs like Slinin, it's a different story.
He got a call from Lehman on Monday telling him that Lehman employee vouchers would no longer be honored, and if employees used his car service they would have to pay by their own credit cards.
With the loss of Lehman, his company, that employees 96 people, could see at 15 percent drop in sales and some layoffs.
Christopher Morgan is president of
Corbeau Technologies Inc., a company that implements financial systems for a host of major financial institutions including investment banks.
“We expect to be significantly impacted by the financial crisis that we are seeing today,” he says.
“Our entire business involves implementing back-office systems in financial companies,” he explains. “These are large-scale, capital projects, that typically are an investment in the tens of millions of dollars at the large financial institutions and millions at smaller companies.”
The crisis on Wall Street could go two ways for Corbeau.
Financial firms may decide capital expenditures need to be put on hold and that could put projects Corbeau now has in the pipeline at risk. Or, on a positive note, he notes, those firms could want “more out of their investment accounting systems -- the systems we implement and support -- therefore needing more from companies like Corbeau Technologies.”
So basically, entrepreneurs like Morgan and Slinin are holding their breath and hoping the financial industry turmoil won’t ravage their bottomlines.
“Today there’s a lot of panic,” says Slinin about recent Wall Street events. “I believe things will rebound.”
Are you all as optimistic as Slinin? How will Wall Street's woes impact your business?
