It was like déjà vu all over again. Hot off the fax machine, its headline read, “Special Alert -- Available Labor and Buildings in Montgomery, Alabama.”
The single-page fax was written in plain, simple English. No hemming and hawing, no woe-is-me whining. It went straight to the point: “Due to the pending closing of Thermo King Corporation’s Montgomery plant, a 120,000 square foot building is available in a much desired, world-class industrial park.”
The next sentence alerted prospective corporate tenants that there are important financial incentives involved: “The building is located in an Enterprise Zone and a Foreign Trade Zone.”
When a plant closes, two things become available: real estate and labor. The last two sentences addressed the newly available work force: “The closing of Thermo King makes available quality workers trained in ISO9000. Approximately 200 displaced workers are trained as the following: assemblers, braisers, maintenance workers, routers, control box assemblers, machinists, inventory flow coordinators, material handlers, mig and tig welders, painters, spot welders, shipping clerks, quality control inspectors, production supervisors, and buyers.”
At the bottom of the page was the basic contact information that would enable any interested parties to find out more.
Four sentences, clearly written, directly to the point.
It doesn’t take a genius to figure out that the economy has hit a speed bump. We just don’t know yet whether that speed bump will simply slow us down briefly before resuming where we left off, or if it’ll knock the wheels of the economy out of alignment. The NASDAQ’s sharp decline last year was simply a precursor as, one after another, previously high-flying dot.com companies went belly up.
Today, the business section of most major metropolitan newspapers is sprinkled with headlines about layoffs, corporate restructuring and plant closings. The news is particularly grim among publicly traded companies, many of which are slicing expenses in an attempt to shore up their sagging stock prices.
Back when it was mainly dot.com companies evaporating, most of us found it difficult to feel sorry for a 23-year-old former billionaire with thick glasses and a bad complexion. After all, most folks couldn’t figure out why those companies were valued so high in the first place.
Now it’s Michael Dell who’s cutting back. So are the Big Three automakers. They’re just the tip of the iceberg.
The bigger the company, the bigger the cut. The greater the number of employees, the greater the number of jobs lost. Does this mean the economy is headed for a return to the “bad old days” of high unemployment, high inflation and slow growth?
No, but it does mean that business retention and business attraction are regaining their importance.
For the past couple of years, most economic developers have been faced with the “problem” of having to turn away business for lack of sufficient workers. The sense of urgency and commitment among local politicians and board members seems to decline, for obvious reasons, when the local unemployment rate is below 2 percent. I remember college economics courses where Nobel prize-winning economist Paul Samuelson considered full employment to be at 5 percent.
My guess is that, before the current downturn in the economy stabilizes, unemployment will be over 5 percent nationally, and 6-7 percent in some communities.
Most of you, if you’re over 30, have seen this cycle before. It’s still a long way from the Great Depression, or even from most recent recessions, but it does mean that, in the next year or so, you will have unemployed people in your community who have worked all their lives and who still want to work. Chances are, some of them will be your neighbors.
That’s when the pressure will be on you, as economic developers, to do something to help.
That’s why Al Cook’s fax campaign is so important, and not because companies are suddenly bailing out of Montgomery. In fact, Montgomery is just a microcosm of what’s going on nationwide in terms of business retrenchment.
What’s significant is that the folks at the Montgomery Chamber were able to take bad news -- in addition to Thermo King Corp., Trinity Industries Inc.’s Freight Car Division is shutting down in Montgomery, putting another 300 people out of work -- and find opportunity.
That’s the kind of proactive optimism that makes good economic development programs great.
Bill King is the chief editor of Expansion Management.
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