Saturday, November 8, 2008

Bend trends.

This morning's paper pointed to a couple of long-term trends in this town.

The first story, about Jeld-Wen Foundations rethinking it's support of the Tradition golf tourney.

"We've run into a buzz saw with the economy," said Henry Hewitt, chairman of the Jeld-Wen Foundation board. "I think this is just a piece of that, and the economics of the tournament and our relationship with PJS. I think in addition to how the tournament is managed, we are probably going to try to find a lower-cost solution, because the economics weren't as good as we wanted them to be."

Trend #1: Overreach.

This is the trend of Bend having taken the BOOM of the last 5 to 10 years and thinking it was going to continue. I think the last five years were more or less an illusion, and any event or business who predicated their plans on those years had better wake up fast.

We in Bend have just elected a pro-growth and pro-builder slate of city councilors; and I think the city is almost guaranteed to go broke if they pursue support programs for builders, resorts and Juniper Ridge.

Our only chance of avoiding this is not only not continuing on this way, but to reverse course and start cutting everywhere we can. It was completely foolish to use General Funds to continue to support the BAT when there was little chance the public would support it, for instance. It doesn't matter if you are for or against the BAT, foolishness is foolishness.

Trend #2: Ignoring warnings. (Mostly in the blogosphere.)

There has been blogger on the BEBB who has been saying for over a year now, that Cessna was going to close, and let go all it's employees. He became the Boy Who Cried Wolf, because he kept being proved wrong.

Until this morning.

He had an obvious ax to grind, and may have just been a stopped clock: but there were other people who pointed out the obvious: such as Paul-doh on Bend Bubble2; that when a big national company buys a local company, the local company is fair game.

There is another big warning out there about Suterra, who is the second tenant of Juniper Ridge. Now most of the warnings seem kind of loony to me, but there seems to be enough there that at least one of the news organizations in this town ought to investigate, if only to debunk.

But you wouldn't even know that that there was a big kurfluffle down in California about synthetic pheromone spraying.

I'd like to discount all this types of warnings as paranoid delusions, except they seem to come about a bit more often than pure chance would have it.

11 comments:

Bend Economy Man said...

Central Oregon is really waking up to find out that there is just really no economic engine around here to speak of.

It's hard to think of a way that this area can end up bringing in more money than goes out without the RE boom unless something major changes (like infrastructure improvement). We live in the High Desert. Everything but alfalfa and mint needs to be trucked in on highways that are two-lane most of the way.

Manufacturing is going away because this area doesn't have a cost or infrastructure advantage over just about anywhere else.

Real estate has turned into a giant sucking sound. More money leaving in the form of interest payments than coming in in the form of purchases.

Okay, that was the doom & gloom. I think that on the positive side, this area should really get behind the development of geothermal energy and also take a hard look at how to bring back the agriculture- and resources-based economy.

The state and local governments should weigh the relative benefits of destination resort development, which I think are pretty low, versus the effect they have on tying up land that could be used for agriculture, mining or timber management. When a destination resort goes in, it not only ties up that land, but creates a residential area full of "amenity migrants" that will complain about any real economic activity taking place on neighboring parcels.

Oregon should lobby for federal funds to get hwy 97 and/or 20 turned into an Interstate. I think that the Obama administration will probably create an economic stimulus package that involves heavy federal funding of infrastructure, and CO should get a piece. Not only will this make the area more attractive for business and manufacturing, but if Central Oregon is serious about becoming a driving destination for Californians, they need to be able to drive 70 miles an hour nonstop from the 97 junction in Weed.

It's also unacceptable that it can take 8 hours to get over the pass in wintertime. One of the mountain passes needs to become four-lane and nonstop all the way.

BENDBUST said...

Boom: All booms end in a bust.

Cessna: It is insane in an environment of high fuel costs to manage a plant in Siberia (Bend,OR). The product line that is made in Bend ( Columbia composite turbo-prop ) is a 'rich mans toy' mid-market boom time niche, that cessna bought to have a complete market line. Today Cessna makes their low end products in China. With the collapse of the economy the mid-market is gone, all of a sudden mid-market doesn't look so good. Everybody saw this coming, especially if your a pilot. The very rich will continue to buy high-end private jets. The poor will buy the new Cessna Skycatcher (chinese) line at $100k. The mid-market will be a ghost for years.

Suterra: Dozens of books will be written on this subject in the coming years, and movies. Stewart Resnick richest man in Calif & Suterra owner, gets a $500B order from CALIF Gov Schwarnegger to spray calis with Suterra 'checkmate' over ten years. Today we're looking at the largest class action lawsuit in calif history. Just another lasting relic of the Bush-Cheney 'easy money' years. The project made it to year two, injunctions stopped the spraying in 2008. With Obama now prez, the DEM congress will not fear reprisals, expect to see indictments against USDA and CALIF-AgDept. Project originated in Homeland Security, and that is in a topic of itself. Had McCain won, most likely Suterra might have seen the entire $500M. USDA spent $500K in 2008 in CALIF on PR&MARKETING, and still lost in court. It must be said that Suterra's own MSDS for 'checkmate' specially says its toxic, it wasn't Suterra's fault how it was used in CALIF, anymore than you can blame Nazi cyanide gas manufacturers for poisoning jews in WWII.

Bend Economy Man said...

About Cessna: I think it would've been naive to expect that it could work miracles where Columbia and Lancair couldn't.

Bend Economy Man said...

OK I know this thread is about the news that's been reported, but I'd like to make a prediction about the next domino to fall: telecommuters and freelance consultants.

I think it's logical that in a slowdown, businesses are going to try to keep their in-house people busy and cut consulting budgets.

Long-term I'm bullish on telecommuting and freelance consulting because of the oft-mentioned advantages of flexibility, cost-saving on employee benefits, etc. but while businesses are in hunker-down mode, the telecommuters and freelance consultants take the first hit.

Duncan McGeary said...

Bem,

Don't get me started.

I've not talked much about the economy, except from the news, because I'm so pessimistic.

I can't see a ray of light next year, not a silver lining, not a bit of blue sky.

I think the 20% drop I've been talking about (Just take the 10% drop in vistors as noted by the airport and the hotels and double it from the local drop off) will drop even more next January and February. I think EVERYONE will sit on their wallets.

Anyway, I know for my business, that the only think I can do in the face of falling sales is to cut costs.

Overhead wise, all I can cut are employee hours.

Inventory wise, I can cut out non-essentials.

I just don't get the sense that the other small businesses understand what's coming.

RDC said...

Duncan,

Now how exactly has the person who has been posting doom and gloom over at BEBB has been proven right.

He has repeatedly posted dates of layoffs that have never occured. He has talked about investigations of environmental issues that have not occured. His most recent posts have claimed inside knowledge that the entire Bend facility will shut down. None of his posts have come to pass.

The closest he has come is he has spent the last year forecasting doom and gloom and you have Cessna indicating that there will be a layoff.

As the saying goes even a broken clock is right twice a day.

Bend Economy Man said...

Well a (tarnished) silver lining is that business owners will be in a better bargaining position to renegotiate their leases when they come up for renewal, or even before they come up for renewal. Force majeure, baby.

BENDBUST said...

$500B

*

Whoops $500M,

It's getting tough these days,

Million, Billion, Trillion, don't mean shit anymore.

Schwarnegger had approved a ten year spraying of cali with Suterra 'checkmate', that would have sent $500M to Suterra, it looks like after initial two years of spraying its over. The people of calif had a conniption.

Good to see you asking the right questions these days Dunc.

Also note that the press is now covering Suterra. This week the SOURCE has a letter to the editor, that does a good job of explaining the silence.

Duncan McGeary said...

But he wasn't all wrong either.

I known for a year in advance sometimes that a competitor was going to close, but the customers are the last to know.

But I agree his statements were a little too declarative and certain, and implied immediate closure.

I mentioned that I thought he had an ax to grind.

I don't think you noticed I mentioned the broken clock thing in my original message.

BENDBUST said...

I don't think you noticed I mentioned the broken clock thing in my original message.

*

It's all so fucking abstract here in Bend, I keep forgetting, how times is a broken clock 'right' again in BEND? Per day?

I'm hearing that a lot an 'ax to grind' having spent my whole fall thus far helping people ready for winter, I can say I wish people knew how to sharpen a fucking ax in this town.

blackdog said...

"The poor will buy the new Cessna Skycatcher (chinese) line at $100k."

Jeez, I sure wish I was "poor" enough to spend $100K on a personal airplane. You must travel in some pretty elite circles.