Hitting Home: Businesses still feeling effects of downturn
08/03/09 7:49AM By Ross Sneyd
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Part of the special VPR Series "Hitting Home: The Recession and Vermont"
(Host) Over the winter, the economic downturn that began in the fall deepened into a recession that some compare to the Great Depression.
As VPR reported in a series in February, jobs were being cut, incomes were falling and the recession was Hitting Home.
So now, six months later, what's changed? VPR returns to the series each Monday this month to find out.
As VPR's Ross Sneyd reports today, the downturn hasn't turned back up, yet.
(Sneyd) In a sense, very little has changed in the past six months.
(Heaps) "Oh, yes, we're definitely still in the recession in the U.S. and still in Vermont."
(Sneyd) Economist Dick Heaps spends his days poring over economic reports and statistics. Those clearly show him that we haven't really hit the bottom, yet.
But he also tries to keep score of consumer attitudes to get a sense how people feel about the economy.
And that can't always be neatly summed up on a chart.
(Heaps) "It's in some ways sort of like the boxer who got knocked out and he's laying on the mat. That's where we were in February. Now they're saying, ‘He's getting up.' Well, we're feeling good. But the guy's pretty drowsy right now. And that's sort of what the economy's like."
(Sneyd) That boxer getting up off the mat is likely to stagger a bit, maybe even fall back to his knees, before he finally gets to his feet.
And that's what we're seeing in the economy.
Six months ago, there were businesses who saw the left hook coming and weren't sure whether they'd be able to avoid it, or whether it would send them to the mat.
Bean Chevrolet in Northfield was one of them.
(Bean) "Ate breathed and slept the automobile business since I was a kid. I've been here ever since, right out of high school...worked with my brothers and father and mother and now my son.
(Sneyd) Mark Bean took over the the family business from his father and brought in his own sons, including his namesake, Mark.
The younger Mark was worried back in February that the steep downturn in the auto industry would mean his own children would never take over from him.
(Bean) "I'd like to be optimistic, but I've got to say that's probably not going to happen. That's probably not going to happen. I don't know if we can weather this storm."
(Sneyd) In fact, Bean Chevrolet didn't weather the storm. By the end of February, the dealership was out of business.
In North Bennington, executives at Porta-Brace were trying to find a way to soften the blow of the faltering economy to their 100 workers. The company makes custom cases and protectors for the high tech gear used by film and video crews.
Instead of laying off any of its workers at plants in Bennington and St. Johnsbury, the work week was cut for everyone from 40 hours to 32.
Worker Starr Volkmer was philosophical in February.
(Volkmer) "You learn to adjust. You have to. It's bad all over, it's not just here. So I feel lucky I have a job, really.''
(Sneyd) And since then, most workers at the factory have stuck it out. Here's Greg Haythorn, Porta-Brace president.
(Haythorn) "There's very few people that have left voluntarily. I'd say the natural attrition rate is lower than it's been historically. With over 100 people, of course, a handful are going to leave every year. I'm not sure we've got a complete handful that have left in 2009. I'm just not sure there are alternative opportunities."
(Sneyd) There are a few. But just a few. Plasan North America announced earlier this month that it would add as many as 300 jobs in Bennington. That's because it won a contract from the military to build armored vehicles for use in Afghanistan.
That's the exception, though.
Economist Dick Heaps says in any recession, jobs will be added.
(Heaps) The economy is churning all the time. ... At any point in time there are always success stories, even in the depth of the recession. And in a boom time there are always the stories of businesses that just haven't done well. Their products no longer in favor. And they're closing."
(Sneyd) Sometimes, during a recession, someone who loses a job decides to create his own.
That's what Dave Askren did in St. Johnsbury. Back in February, after he was laid off from a software engineering job, he was creating a musical instrument repair business.
The business is off the ground. He says he's named it Kiss My Winds and Brass.
(Askren) "And I set up my shop in the basement of my house and got rolling right around the beginning of May. Since that time business has been slow. I've had about 12-15 repair customers and I'm happy to say that every one of them is very pleased with the work that I've done."
(Sneyd) That included an emergency clarinet repair on the Fourth of July.
Askren just got a Web site launched last month. He's hopeful that will truly get his new career started.
Economists say there's no more difficult time to begin a business than during a recession. But they say perseverance and enthusiasm are key to success. Askren says he's got plenty of both.
For VPR News, I'm Ross Sneyd.
(Host Outro) Our series will continue next Monday, when we'll look at how well manufacturing companies are doing in this recession.