The number of times we hear or read the word unprecedented today seems unprecedented. And although the word may be somewhat over-played, lets face it: For most of us in the lubricant business who were brought into life with a slap on the bum after 1939, these are truly unprecedented times.

All of us – whether a lubricant distributor, major oil company, independent lubricant manufacturer, additive supplier, bottle or drum supplier, or other industry stakeholder – at a minimum are moving through a very unique period.

To start, whereas 10 years ago we had 12 major lubricant manufacturers in the U.S. domestic market, today there are just seven. And their ranks could shrink again if Citgo consummates a deal to sell its lubricants business. To put this concentration of power into perspective, consider that in 1998 the three leading majors together sold roughly 900 million gallons of lubricants. Todays U.S. market is similar in size and the top three move over 1.4 billion gallons, about half of the total.

Other issues unique to our time include competitive pressures and opportunities from private-label lubricants; international competition; brand management challenges resulting from consolidation; marketer alignment; commoditization and harmonization of products, and channel shifts, to name a few. In addition, the majors and their additive suppliers face rapidly escalating product development costs, and the prospect that automakers will each go their own way on lubricant specifications.

For another example of just how unique these times are, look at the price of crude and base stocks over the past year. The average price of crude went from $80 a barrel in September 2007 to $134 in June 08, while that of 100N Group II base oil spiked from $2.85 a gallon to nearly $5. Crude prices eased in July and August, though, and were down to an average $104 in September. By contrast, base oil prices stuck fast.

Then in early October, as some hoped (or feared) could happen, the price of crude dropped like a rock. Truly an unprecedented pricing event, since all of the majors had boosted finished lube prices repeatedly in the first three quarters (adding a total of around $3.40 a gallon) in response to raw material costs. Each is now facing angry customers demanding to know why the price of lubes follows the price of crude on the way up, but not on the way down.

Distributors are yet another example of how unique these times are. Whereas 10 years ago a lubricant distributor moving 1 million gallons a year was considered large, today a large distributor sells over 10 million gallons, and the largest sells close to 50 million. Whats more, during the same period the number of distributors in the business declined from close to 10,000 to about 5,000. Moreover, if the rumors about ExxonMobil, Shell and Chevrons efforts to rationalize marketers are right, the ranks of significant lube distributors could decrease by an order of magnitude over the next 10 years.

Independent lubricant manufacturers also face highly unusual times due to rising costs and falling demand. Some are finding there is a mint to be made in toll manufacturing lubricants for majors and private labeling for distributors. Others are tempted by price pressures and falling demand to cut corners on quality and short-sheet customers in ways theyd never otherwise consider. And yet others are throwing in the towel and calling it quits, after generations in business.

Although these are painful times, are they truly unprecedented, or have some simply lost sight of what it takes to be successful in a capitalistic system? Regardless of where we play in the value chain, the winners in these challenging times, like others, will be determined by tenacity, business acumen, creativity, salesmanship, people skills, risk tolerance, competitive spirit and other abilities. The winners will have the ability to push through price increases; to manage costs, optimize inventory and rationalize brands; to take on risk, debt and criticism, and to implement operational efficiencies. They are the ones who will hire and retain the most productive employees, cut spending, rationalize inventory and brands, develop innovative and value-added products and services, take on the competition when it cuts corners, and implement other practices necessary to win.

In fact, maybe these times are not unprecedented, though clearly they are very challenging. Maybe this has happened before and we have precedents on which to base our strategies and tactics moving forward. Maybe a precedent can be found by looking no further than the aggressive pricing and innovation that made Microsoft successful in a market dominated by IBM and HP, or the innovation and niche marketing of Apple Computers.

At the same time, maybe the precedents we really need to study are market conditions during the days of Standard Oil or the Seven Sisters. Because if, as they say, history repeats itself, maybe where we are heading takes us back to where we began.