Ohio Town Weathers Recession
ROBERT SIEGEL, host:
This is ALL THINGS CONSIDERED from NPR News. I'm Robert Siegel.
MADELEINE BRAND, host:
And I'm Madeleine Brand.
Tomorrow night, President Obama will address Congress on the State of the Union. He's expected to present his plans to help people hurt by the recession and high unemployment, and his plans to hasten the recovery.
SIEGEL: Last week, I went in search of the recovery in one small Ohio City. Chillicothe, Ohio, is 45 miles due south of the state capital, Columbus. I went there in the fall of 2008 when the economy was slowing down. And this time, as I did then, I went to the local chamber of commerce's monthly gathering called Business After Business.
Unidentified Man: First and foremost, Happy New Year, everybody. Happy New Year.
Unidentified Group: Happy New Year.
Unidentified Man: We're 20 days into it, but our first BAB of the year, and I really, really want to thank our sponsors tonight.
SIEGEL: This month, the BAB, as it's known, was at the old Pump House, an art center in the park along the Scioto River. Local merchants shared tales of modest successes in the big downturn: the downtown gift shop owner who had a strong Christmas season, the auto dealer who says he had a good December, the men who sell locks and burglar alarms who haven't suffered at all - hard times, after all, breed property crime.
But as the chamber's president, Marvin Jones, tells it, the big picture for Chillicothe, a city of 22,000, and surrounding Ross County, is anything but bright.
Mr. MARVIN JONES (President and CEO, Chillicothe Ross Chamber of Commerce): Unemployment rate here is about 12.5 percent, I want to say.
SIEGEL: It's above the national average.
Mr. JONES: Above the national average.
SIEGEL: And a year ago, October, back in 2008?
Mr. JONES: It was probably around 8 percent at that point.
SIEGEL: So that's a 50 percent increase in unemployment.
Mr. JONES: Yeah, it is. Right. Right. It's about 400 more people unemployed in our county, on the basis of about - a labor force of about 34,000.
SIEGEL: Housing, what's happened with foreclosures since a year ago, October?
Mr. JONES: Unfortunately, with the foreclosures in Ross County, almost 500 recorded here in 2009. And as far as I can tell, that's an all-time high. And it's probably about - oh, maybe 60 or 70 above 2008. So obviously, we have felt that.
SIEGEL: Have you seen any stimulus money in Chillicothe or in Ross County?
Mr. JONES: We were fortunate enough that we had a shovel-ready project with our Ohio 104, Route 104 project, on the north side of town. It has probably helped a few jobs in terms of I know the concrete supplier is local, and I'm pretty sure that a lot of the other jobs are local also.
SIEGEL: I visited Chillicothe's three biggest employers to get their sense of the economy. There is still some very successful manufacturing going on here. For example, at the state-of-the-art Kenworth Truck assembly plant. This year, workers faced occasional layoffs at Kenworth. The company reduced its 401(k) match but has now restored most of the cut.
Scott Blue, the plant manager, says the demand for big trucks plummeted last year.
Mr. SCOTT BLUE (Manager, Kenworth Truck Company): 2006 was the peak year. That was the year that we just built more trucks than we've ever built ever before in our history. And so, we were in excess of 100 trucks a day here at this facility. Now we're just 60 percent of that.
SIEGEL: I was here in October 2008. And at that time, I guess what had been expectations for even more production had run into the reality of the slowing economy.
Mr. BLUE: I guess we all kind of had the same expectations. We thought that things would be better and things would continue to improve, but they certainly didn't.
SIEGEL: Scott Blue says, in recent years, the average demand throughout the country for trucks was running at about 200,000 to 225,000 trucks per year. Last year, it sunk to 100,000.
Mr. BLUE: And the projection for 2010 now is between 110 and 140,000. So the industry is still very much depressed, and it relates to the economy, I think, and the amount of freight that's moving and so forth.
SIEGEL: Those are the numbers. For Joyce Underhill(ph), Robert Call(ph) and Mike Miller(ph), those numbers add up to caution in how they spend and save, and concern about the economy that awaits their children. They're all senior blue-collar workers at the Kenworth Truck Plant. They all make around 50,000 a year and they've all put children in or through college.
Mike Miller, who also works a family farm, has two kids in college.
Mr. MIKE MILLER: It's been tough. It's just one thing after another. You have to, you know, watch your P's and Q's and try to keep the kids on the straight and narrow, so...
SIEGEL: Do you sense there's a recovery? Joyce, do you sense that the economy, however bad it's been in the past year, is turning around and getting better now?
Ms. JOYCE UNDERHILL: I don't think it's gotten any better. It's about the same. It's slow. It's very slow. I know that this time last year, we were laid off, off and on, you know, weeks at a time.
SIEGEL: That's a major way you would feel...
Ms. UNDERHILL: Correct.
SIEGEL: ...the strength of the economy? Other ways that you sense it?
Ms. UNDERHILL: Well, I've had two girls graduate college in the last three years and they actually are employed. I have a daughter that's a third grade teacher, and then the other one that's out - she had to move out of the area, though. She's living in Chicago. So that - you know, she had to go look for work elsewhere.
SIEGEL: Rob, do you sense we're in a recovery now?
Mr. ROBERT CALL: I think we've bottomed out. But - and like Joyce said, a year ago, we were working from day to day and from week to week not knowing if we're going to have work. So now, we've - I've got - I personally have a little more sense of security. My wife and I, both, we have saved a lot, you know, for - in case something does happen, we've got that to fall back on.
I've got, what, three or four months, you know, security in the bank to where I've kind of - my thought process has changed somewhat as far as my spending goes. We've not taken a vacation in a couple of years. But the word out on the floor, we've got several guys that could retire now who are afraid to retire because the unsecurity, you know, of what tomorrow holds as well.
SIEGEL: 'Cause those guys who are putting off retirement are also preventing some 20-something from taking a job at the plant.
Mr. CALL: Correct. It's like a double-edged sword.
SIEGEL: Joyce, for you, decisions that are altered by the recession?
Ms. UNDERHILL: Oh, yes. Major purchases, auto purchases, appliances, anything in the household. You know, you need to say, do I need to spend this? Do I really need to spend this now or do I want to wait? So, you know, you wait. And then also with retirement, I would love to retire in, like, five years. But, you know, with our 401(k) and the match, and it just kind of, you know, threw a wrench into things that you were planning on doing later on that you're not actually going to be able to do right away.
SIEGEL: Mike, for you?
Mr. MILLER: You know, it's been a huge change as far as the things we have to do. As far as me, as cutting back, we've had to. I mean, through buying purchases, just farm machinery and just, you know, making this go and patching this and maybe letting that go and things like that.
And retirement-wise, I think it's harder and harder to save today, nowadays. Fifteen years ago, I noticed what I used to put back made less money and I put more money back. And now it's rougher and rougher and rougher to save anything in this country. And I just - I don't know. It just seems like you turn on the evening news and it's - they're not in touch with what's going out here in reality with the people out here in this country.
SIEGEL: Well, does the experience of this past year of recession, does it leave you at all optimistic about things? Are you worried? How would you describe your mood about the economy? Joyce?
Ms. UNDERHILL: No, I don't worry. I don't worry about it. I don't lose any sleep over it because it's beyond my control.
(Soundbite of laughter)
Ms. UNDERHILL: So I, you know, I just take it in stride.
Mr. MILLER: I work for my kids and I'll tell you why I say that is, you know, I'm 51 years old. And I'm hopefully seeing a light at the end of tunnel here. But I worry for - and I try to stay positive. But down deep inside, you know, me and my wife sit down and talk about this many times: What's facing them? What are we leaving them? Is the jobs going to be there for them?
SIEGEL: Rob Call, what about you?
Mr. CALL: You know, I worry, just like Mike said. You know, my kids are my primary drive, so I worry about their future. But as far as myself, you know, Joyce touched on it: What can you do? You really can't do anything about it other than, you know, live life. Life goes on.
SIEGEL: If there were some message about the economy that you hoped members of Congress or members of the administration took on board, what would it be?
Mr. MILLER: If - I would say try to get out here and listen to the people and get us back to where we used to be as far as having good jobs in this country. Good manufacturing jobs.
SIEGEL: Mike, thank you.
Joyce, one message for Washington to hear from you.
Ms. UNDERHILL: I think they need to focus on the people and what they need. And the political things, they need to put aside and try to focus on the American people and taking care of us.
SIEGEL: And, Rob?
Mr. CALL: Yes. The blue-collar people are the people that run this country, drive every aspect of the economy and everything. And that's us, the working people. They need not to lose touch with reality as far as who we are and what we need.
SIEGEL: That's Robert Call. He, Joyce Underhill and Mike Miller all work at the Kenworth Truck assembly plant.
Chillicothe, Ohio's other big private sector employer is also a manufacturer: the Glatfelter Paper Company.
(Soundbite of machinery)
SIEGEL: Every hour, paper machine number 12 turns pulp into another gigantic 25-foot roll of paper, paper fit for hardcover books to be printed on. Each roll weighs 30 tons. The CEO, John Blind, says, these days, it feels like a bit of a recovery.
Mr. JOHN BLIND (Glatfelter Paper Company): Our projections are it's going to be a slow recovery, but we're starting to see improvement in the demand for our products.
SIEGEL: John Blind has more than just a recession to worry about. Glatfelter makes carbonless copy paper, a product that's been targeted by Mexico in a trade dispute. It's used by hospitals, so if medical records ever go electronic, and if Kindles make hardcopy books obsolescent, then some of Glatfelter's main products are in trouble. Blind says the company saw the recession coming early in 2008 and cut back production to avoid mounting inventories.
Mr. BLIND: So we actually had to temporarily lay off some people to get through that, okay? And we continued to take market-driven downtime from about November of 2008 through June of 2009, at which time our demand started to pick up and we were able to call back a majority of the people that were laid off for those temporary times.
SIEGEL: How does your workforce today compare with, say, the beginning of 2008?
Mr. BLIND: I think it's probably down 50, something like that, from the beginning of 2008, maybe a little bit more.
SIEGEL: Well, that's 50 out of...
Mr. BLIND: Out of 1,450.
SIEGEL: The biggest employer in Chillicothe employs just over 2,000, and it's a place where you can hear a rare sound around town in these recessionary times: construction.
(Soundbite of construction)
SIEGEL: The Adena Medical Center is adding a new wing. This floor will be a women's and children's center when it opens this spring. Between Adena and a VA hospital nearby, health care is the growth sector here, as it is in so much of the country. Even so, CEO Mark Shuter says last year, the medical center felt the recession, and it's still feeling it.
Mr. MARK SHUTER (Chief Executive Officer, Adena Medical Center): To say there's a recovery, you know, I see no evidence of that.
SIEGEL: One measure of economic activity is jobs, how many people you employ.
Mr. SHUTER: To me, that would be the - probably the litmus test. You know, we've been growing by adding a roughly 200 employees a year. You know, we've slowed down to the tune of probably 70 positions. We employ 2,200.
SIEGEL: So you're down about 70 positions over the year.
Mr. SHUTER: Right. Mm-hmm. Right.
SIEGEL: After typically having grown by a couple hundred.
Mr. SHUTER: By 200. What's very unusual about this recession, I've never seen a recession impact people's use of the health care system. This one did. So for people to keep calling this a recession, you know, it does need some qualifier, the great recession. Call it something.
SIEGEL: And when you start seeing job growth, that's the recovery?
Mr. SHUTER: To me, it's all about jobs. I'll say we're out of the recession when I'm back to growing 200 jobs a year.
SIEGEL: The last time I was in Chillicothe, Ohio, in October 2008, the question was: Is it a recession yet? And the answer was yes. This year, the question is: Is this a recovery yet? And in Chillicothe, Ohio, the answer is still no.
(Soundbite of music)
MADELEINE BRAND, host:
You're listening to ALL THINGS CONSIDERED from NPR News.