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Like a tornado Mail Tribune / Roy Musitelli Eastman Kodak plant manager Brian Melchiori stands next to a stainless steel pipe leading to the facility's $5 million incinerator, part of a $45 million expansion project. Kodak is among the many Rogue Valley businesses that are weathering the recession well and expect the economy to improve in the third and fourth quarters. The icy economy did serious damage in some parts of the valley in 2001, but it missed other areas completely By DAMIAN MANN Mail Tribune The recession rumbled through the Rogue Valley's major employers last year, rattling the bottom lines of some corporations but leaving others relatively unscathed. As the dust settled, the local unemployment rate increased to 5.6 percent in November 2001, compared to 3.6 percent a year earlier. State figures jobless rate will rise further The Oregon Employment Department expects unemployment to rise higher in the coming months as businesses prepare for a seasonal slowdown during the first quarter. "I don't think we're out of the woods yet as far as the economic slowdown goes," said Guy Tauer, a regional economist for the OED office in Medford. He said the unemployment rate, which in November was 5.6 percent compared to 3.6 percent a year earlier, could continue to go up during the first three months of 2002, reflecting seasonal losses. However, as businesses gear up in the spring and summer months, there should be a bit of a rebound. In general, retail and health care have maintained fairly solid growth despite the recession, said Tauer. Despite the downturn, many businesses - particularly health care and retail - have weathered the recession well, actually adding employees in some cases. The county's lack of high-tech businesses has helped it handle the recession better than other parts of Oregon. In the Portland area, for instance, the unemployment rate hit 6.9 percent, primarily because of an economy that is more dependent on high-tech. The biggest high-profile loss to the Rogue Valley economy last year was the closure of Tyco's printed-circuit-board plant in White City with 330 employees. Schools lost 184 positions, and Gov. John Kitzhaber warned last week that they can expect to cut more teaching positions and increase class sizes as the state grapples with an $850 million shortfall. Other prominent companies such as Boise Cascade and Erickson Air-Crane have reduced their work forces. Erickson let go of 40 employees last year, and Boise has seen its personnel slip from a high a few years ago of more than 1,000 to today's 850. Even giant Bear Creek Corp. reported lackluster sales last year as a combination of recession and anthrax scares took its toll. "We didn't get the double-digit increases that we did in past years," said Nancy Tait, president and chief executive officer of Bear Creek Corp. Every time an announcement of anthrax contamination hit the news, it had a major impact on sales, she said. The company - with a work force of 3,300 one of the biggest employers in Jackson County - does 70 percent of its business east of the Mississippi, generating more than $500 million in annual sales. However, the downturn in mail orders was partially mitigated by an increase in business at the popular Harry and David retail stores and with a stronger showing in Internet sales, said Tait. With 120 stores nationwide, the company plans on building another 35 outlets this year as a way to broaden its market. The company also tested a new wholesale network last year, offering products through Borders books and music and Beverages and More. While new markets helped sales, Tait said it created other problems. "With the stores, we had the opportunity to capture a lot of last-minute shoppers," she said. "But each year our busiest day gets later and later." This year, that busiest day fell on Dec. 17, creating a Herculean distribution effort for the more than 10,000 full-time and seasonal employees who struggled to meet orders for a Dec. 25 deadline. Tait said Bear Creek is exploring international markets for its products, making a test foray into Japan last year. Because unemployment rates were up, Tait said, the company had an easier time filling many of its seasonal positions this year. While some companies struggle through the recession, the Eastman Kodak Co. plant in White City has doubled capacity in recent years to keep up with demand for its dry-film X-rays. A $45 million expansion effort, which should be completed in six months, will allow the company to meet sales expectations for the next five years. Plant manager Brian Melchiori said the plant's 420 employees should handle most of the demand. "We will probably be doing a small amount of hiring. But it will be less significant than in the past five years." Asante Health System spokesperson Andrea Jablonski said the parent company of Rogue Valley Medical Center had not been hit hard by the recession. In fact, the company, which services 10 Oregon counties, added 70 jobs this year, employing 3,297 people in Jackson and Josephine counties. "The population of seniors is growing," she said. "We're just meeting the health care needs of our area." Asante, which opened a new hospital in Grants Pass last year, plans a $90 million expansion in Medford in the next five years and will add 100 full-time jobs in 2002. Providence Health System, which includes Providence Medford Medical Center and Providence Medical Group South, added 40 employees last year and expects to add more this year. The medical center will look for more registered and licensed practical nurses and diagnostic imaging technicians, and the medical group will add two more primary care physicians in 2002. Spokeswoman Deborah Elliott said despite personnel increases, the company has felt the effects of the recession. "As jobs are lost in the community, people lose health insurance coverage," she said. "Therefore, we are delivering more charity care." Charity care increased by $320,000 in 2001 and bad debts increased by $404,000, she said. Providence plans to expand its laboratory, diagnostic imaging and emergency departments in the next one to two years. It is also hoping to add more in-patient beds and rehabilitation space. While the long-range projections for the private sector are good, schools, which are some of the biggest employers in the valley, could be hard-hit by budget cuts this year. Based on earlier estimates by the state of a $16 million cut to education locally, more than 300 jobs could be lost. The net result would be increased class sizes, loss of elective and core courses as well as the loss of college accreditation status by high schools. The recession's effect on local schools hasn't kept other companies from considering a move to the area, however. Gordon Safley, director of Southern Oregon Regional Economic Development Inc., said a company that would employ 200 people locally is now looking for a space in this area. He said it is too early to disclose the name of the company, but added, "They're very serious. They've made an offer on a local facility." Safley expects Jackson County to continue to attract small business in general, but it is unlikely to bring in high-tech firms. "We get criticized as a region because we're too far from the service providers for the high-tech industries," he said. But the lack of high-tech locally also has spared Jackson County's economy from the downturns of the Portland area. "We just weren't hit as hard as other areas," said Safley. Reach reporter Damian Mann at 776-4476, or e-mail [email protected] . Staff writers Jill Briskey and Greg Stiles contributed to this report. Mail Tribune Home | Ottaway Newspapers, Inc. | Dow Jones & Co., Inc. | Privacy | Contact Us Copyright � 2001 Mail Tribune, Inc.