No Change Predicted in Top 3 Struggling Industries for 2005

Airlines, Manufacturing and Automotive Picked in Turnaround Management Association Poll Again This Year

CHICAGO, Jan. 13 -- In most polls, the top vote-getter is projected to be the winner. However, the industries that came out on top in the 3rd annual Trend Watch poll of corporate renewal professionals are predicted to be losers in the fight to regain solid financial standing during 2005. In the poll conducted in December 2004 by the Turnaround Management Association, 78 percent of the respondents said airlines experienced the most distress during 2004, and 61 percent predicted 2005 would be no less turbulent for this industry. Manufacturing, automotive and retail were the next three named as "most troubled industries" for 2005, rankings that have been consistent over the past three years in this poll.

Despite an improving economy, about half of the respondents still believed "economic conditions" would be the main reason for these industry sectors' troubles in the year ahead, with "too much debt" and "changes in competition" named by one-third of the respondents.

"While the restructurings of multi-billion dollar companies are fading from the news, many mid-size and larger companies continue to struggle," said Holly Felder Etlin, 2005 TMA president and principal at XRoads Solutions Group in New York. "Increased competitiveness in all sectors creates a continual stream of companies in need of revival. Previously, these bottom quartile companies could hold on much longer without taking drastic action; but shareholders and creditors have learned from the last economic cycle and are less patient for results from management."

TMA poll respondents were more optimistic about the outlook for financial services, technology and the telecommunications industries, which were the top three picks for improved performance in 2005. In the 2002 poll, telecommunications was named the most troubled industry by 59 percent of the respondents. An improved economy and gain in demand for products and services were the top reasons for recovery given by respondents.

When asked what factors would affect their turnaround and restructuring work during 2005, more than half of the professionals responding to the poll noted the increased competition in the lending market, and one-third said an improved economy and increased liquidity in the corporate world will be major issues.

"The U.S. financial system has not had access to so much liquidity since 1969, and I don't see this trend abating during 2005," said Ward Mooney, TMA chairman and president of Bank of America Retail Finance Group in Boston.

Turnaround Management Association ( http://www.turnaround.org/ ) is the only international non-profit association dedicated to corporate renewal and turnaround management. With international headquarters in Chicago, TMA's 7,000 members in 34 regional chapters comprise a professional community of turnaround practitioners, attorneys, accountants, investors, lenders, venture capitalists, appraisers, liquidators, executive recruiters and consultants. Members adhere to a Code of Ethics specifying high standards of professionalism, integrity and competence. Its Certified Turnaround Professional (CTP) program recognizes professional excellence and provides an objective measure of expertise related to workouts, restructurings and corporate renewal.