Ben Jacklet

Jobs Watch: The power of negative thinking

The latest numbers show that Oregon has lost 124,300 jobs since I took this job in December of 2007. Clearly my writing is not good for the state’s economy. So forgive me if I dispense with the cheerleading and point out a few observations that give me reason for concern.

It starts with the banks. Lake Oswego-headquartered West Coast Bank is the latest to receive an ominously worded “cease and desist” order from the FDIC. That makes three important regional banks struggling for survival, if you add Columbia River Bank of The Dalles and Bank of the Cascades in Bend. Plus the complex situation of ShoreBank Pacific, which is wholly owned by a holding company operating under a cease and desist order of its own. These banks have to improve their capital positions or else, and that means they will be more reluctant to loan than ever.

Then there’s retail. Is it me or is the premature Christmas glitter looking even more desperate than usual this season? I realize that retail drives the economy, 70% of which is based on consumer spending. But is it really the duty of every American to purchase all the world’s plastic junk? Consumers lack confidence for a reason. With so many companies cutting costs, salaries and jobs, how much longer can consumers be expected to over-spend?

Jobs Watch: Nau is not the time to quit

You’ve probably heard the one about the Portland company that raised $35 million to set lofty new standards for business ethics and sustainability in the fashion industry, only to go down in flames a year after launching. What you might not know is that Nau is back.

I spent an hour and a half yesterday with Mark Galbraith, Nau’s general manager, an energetic veteran of the apparel industry who left a nice job at Patagonia to create something ambitious. It’s been a dizzying and at times terrifying ride, but he told me he has no regrets. “In retrospect what we tried to do was too big and too complex,” he said. “But we were following our ideals and our aspiration to do things better.”

We were sitting in the Lizard Lounge in the Pearl District, next door to the collaborative design studio where Nau does its thing. I noticed that the rack directly behind Galbraith, next to where a couple of hipsters were dinking a ping pong ball back and forth, featured new markdowns of 50% to 75% off. But Galbraith said sales this fall have been strong. He expects Nau to turn profitable over the next fiscal year.

Jobs Watch: Desert celebrity watch

It isn’t often that I get to write movie star gossip, so now that I finally get my big chance, forgive me if I get a bit breathless. Like, OMG! What in the world is Michelle Williams doing in Burns, Oregon?

Starring in a film about desperation in a harsh environment — what else?

Williams, who graced the screen in Dawson’s Creek, Brokeback Mountain and Deception, is working with Wendy and Lucy director Kelly Reichardt and rising star Paul Dano in a James Mangold production titled Meek’s Cutoff. It’s a pioneer Western about an ill-fated journey into Harney County in 1845. Three families hire a guide named Stephen Meek to lead them on a detour from the Oregon Trail into unmarked territory, only to get horribly lost in a brutal landscape well known to anyone who has made the mind-numbing trip from Bend to Burns.

Jobs Watch: Back to work

When I interviewed Sam Adams back in 2005, it was like an aerobic workout. He was midway through a campaign stunt to work at 100 businesses in 100 days, and ideas and energy were spilling out of him.

This summer, interviewing the mayor was an entirely different experience. The ideas were still there but the energy was not. Transcribing the tape later, I wondered if my recorder was running low on batteries, he was speaking so slowly and with so little inflection and passion. He sounded like a burnt-out bureaucrat.

This is not surprising. We all know about the sordid sex scandal that surfaced at the worst possible moment, just as Adams was taking office and the economy was crashing. That mess nearly cost him his job, and it hasn’t done the city any good either.

Jobs Watch: A surprise win for the harbor

There’s good news and then there’s REALLY good news. Daimler’s decision to keep making trucks in Portland isn’t just a reprieve for the hundreds of people who work for Daimler and the companies that feed into that truck-building machine. It is a vote of confidence for the industrial harbor that Portland was built on.

The harbor has been losing jobs steadily over the past decade due to cheaper labor costs overseas and the environmental uncertainties that go with a Superfund listing. But the harbor remains vital to the regional economy, a place where people without college educations can get good jobs to support their families building barges, pumps, rail cars and trucks. Some of these jobs have moved to Mexico, but a lot remain here. Manufacturing powerhouses such as Schnitzer Steel, Esco, Gunderson and Vigor Industrial give Portland “a manufacturing base in this city that most mayors would give their left arms for,” in the words of Mayor Sam Adams.

Jobs Watch: Hemp for the masses

Anyone who believes that the hemp industry is best left to the half-baked stoners of the world should spend a few hours talking textiles with Ken Barker. Five minutes into the conversation it becomes clear that this guy is onto something big, and he knows exactly what he is doing.

Barker recently served as head of apparel at Adidas North America in Portland. Before that he held executive positions with Adidas and Levi Strauss in Canada. He knows how hard it is for apparel companies to meet the rising demand for clothing from earth-friendly sources. When he was with Adidas he entertained proposals to make fabric from soy, bamboo, even seaweed. None of them made as much sense as hemp, the plant that once served as the backbone of U.S. industry before it was banned in the 1930s.

Barker and another former Adidas executive, David Howitt (a brain behind the success of Oregon Chai), run an investment firm in Northwest Portland called the Meriwether Group. They have two hemp companies in their portfolio. Living Harvest, which makes hemp milk, is one of the fastest growing companies in Oregon. Naturally Advanced Technologies, the company Barker has run since 2006, recently raised more than $900,000 and plans to get its product to market within six months.

Jobs Watch: The recession is over. Sort of.

Ben Bernanke said it, so it must be true: The recession is over. Why am I not feeling relieved? For starters, Oregon’s new jobless numbers are out, and they are worse than ever. Unemployment has more than doubled over the past year.

Construction jobs are down 16.3% year over year. Manufacturing jobs are down 15.2%. Professional and business services are down 8.7%. Even government jobs have dropped. There may be signs of rebirth hidden somewhere in these figures, but I’m not seeing them.

Meanwhile, projects that had me thinking optimistic thoughts about Oregon’s future are fizzling out. Amazon is backing away from its plan to build a server farm in Boardman. Vestas appears to be waffling on its earlier promise to building a new headquarters building in Portland. Once mighty Tektronix is being forced by its parent company to move jobs from Beaverton to Shanghai.

Jobs Watch: Something's burning in Burns

Something was burning in Burns, and it smelled awful. Turns out the town dump was on fire: Black smoke was spewing forth from a privately operated landfill loaded with treated wood, plastics and fiberglass from the RV manufacturing plant.

This was the last thing I wanted to breathe in on a sweet morning last Thurdsay in Harney County, where fewer than 8,000 people populate 10,000 square miles of high desert and pine forest. You expect dust storms, sagebrush, weather-beaten pickup trucks, barbed wire, dried up lakes, bullet holes in the road signs. But burning fiberglass?

The locals weren’t too happy about it, either. The smell served as an acrid reminder of the latest industry to leave town. Bankrupt Monaco Coach, which employed 6,500 people as recently as 2006, was in the last stages of shutting down its local operation, with its final day of operations set for Friday. The closure of the Monaco plant leaves Harney County with basically no manufacturing jobs. That’s a harsh reality to accept in a town that once had one of the busiest lumber mills in the world.

Jobs Watch: Prineville pines for opportunity

At the corner of Olde Iron Street and Northwest Harwood in Prineville, in front of not-quite-finished housing development, there’s a big sign that reads, “Community First Bank: Re-investing 100% of our local deposits back in Central Oregon. That’s what a REAL community bank does.”

Unfortunately, that strategy didn’t work out real well for Community First, which was seized by regulators in Prineville on Aug. 8. Growth in Central Oregon has been a good bet for the past decade, but that boom has gone bust, and no community has been hit harder than blue-collar Prineville.

Unemployment in Crook County in July was a seasonally adjusted 18.7%, down from an abysmal 22.4% in June but still the highest in Oregon. In addition to the failure of the local bank, Prineville has suffered the closure of its biggest lumber mill (formerly run by Ochoco Lumber), the loss of the corporate headquarters for the billion-dollar Les Schwab tire empire and the anti-climatic fizzling of several ambitious home-on-the-range residential developments.

Jobs Watch: Down to the wire in Roseburg

For years, it has been a point of pride within Roseburg’s business community to raise $100,000 through the annual duck race to fight child abuse in the community. This year was no different — except of course this year IS different if you’re talking money.

Normally the duck race fundraiser goes right down to the wire and Roseburg’s civic boosters are called on to dig out the final 10% during the final days. But this year they weren’t even close — only $56,000 had been raised, with one week left.

Enter Neil Hummel, who has been in the real estate business in Douglas County for 36 years. He got out his Rolodex and got to work, and by the end of the week the goal was reached.

Jobs Watch: Integra promises no layoffs

Maybe you’ve heard the one about the fast-rising Portland company that got snapped up in a “loan-to-own” deal that’s becoming increasingly commonplace as the vultures circle. Maybe you read it last week in this blog, under the category of bad news.

Dudley Slater, CEO of Integra Telecom (one of Oregon’s most successful private companies over the past decade, 700 jobs statewide), took exception to my characterization of his company’s efforts to restructure its debt. In his view, the deal is good news because it cuts Integra’s debt in half and sets a course for growth. But rather than paraphrase his perspective, allow me to print an excerpt from our hour-long conversation Tuesday morning at Integra’s corporate headquarters in Northeast Portland, edited for clarity and brevity.

Jobs Watch: There's good news, and there's bad news

Let’s get the bad news out of the way first: One of Oregon’s most successful private companies in recent years, Integra Telecom, is on the verge of changing hands under less than ideal circumstances. A front-page story about a sharp increase in “distressed takeovers” in yesterday’s Wall Street Journal reported that Integra is being forced to turn over ownership to Tennenbaum Capital Partners LLC following a barrage of “hardball tactics” deployed by the debtholder.

In the story, Integra CEO Dudley Slater is quoted as saying, “Life is always better when you have options and in this case, we didn’t have any options.”

That’s bad news for Integra, which earned $684 million in revenues last year and employs 2,300 people including 550 in Oregon. Companies that get taken over by private equity firms don’t always suffer massive job cuts shortly thereafter, but it comes as no surprise when they do.

Job Watch: Wading in the shallow end

I don’t know about you, but my neighborhood pool has been a bit over-crowded lately, closer to human stew than the Mediterranean. I’ve spent quite a few evenings there over the past week, soaking in shallow water while the kids swim free, catching up on what the parents have to say about their jobs — or former jobs.

Not surprisingly, I’ve heard some grim stuff: 60-hour work weeks cut down to a trickle, law firms giving up on a decent recovery until somewhere in 2010, newcomers with advanced degrees and great ideas getting nowhere with their job searches.

It’s enough to make you wonder if the economy — and the pools for that matter — might be more appealing elsewhere. But then the other day I wandered into a shallow-end conversation that gave me a completely different impression. I had met Prashant before through the usual stuff, tennis and kids and so forth, but we had never really talked. What I didn’t know is that he’s held executive positions with local firms like Tripwire and Fios; he’s launched a start-up and business is pouring in faster than he can handle it. His partner is a lawyer who lives across the street, and he says that tons of people from his neighborhood are seizing on the momentary lull to build new businesses. As you might expect, he’s got a substantially brighter view of the current trend towards frugality, because it is creating exactly the sort of environment he needs to convince companies to take a chance on his value proposition.

Job Watch: finding survival tactics

For the second month in a row, we are scrambling to revise a story about a great local business that has been harder hit than expected by the continuing recession.

Last month it was Pendleton Woolen Mills, a 100-year old Oregon icon that surprised us by announcing that 45 employees would be laid off as we were preparing to put our August issue to bed. This month it’s a local bank to be named later that has been dealing with hard-nosed FDIC regulators scouring through every record, email and report they could unearth. My conversations with the CEO went from fascinating to ominous over the course of the past several weeks, and we agreed that running a story before the matter is clarified with a formal FDIC report would be unwise for the magazine as well as the bank.

Both of these stories were slotted for our Tactics page, where we explore a company and its leaders, what they are facing and how they are proceeding and why. I’m a big fan of the page, because it strives to dig deeper than the usual business profile by shaving off the fluff and honing in on what is crucial. Unfortunately, more and more of these pieces are reflecting the harsh reality that for many businesses, the over-riding goal for 2009 is simply to remain in business. Our research editor Brandon Sawyer quipped the other day that maybe we should rename the page Survival Tactics.

The gift that keeps shrinking

The latest round of job losses at the Portland Tribune comes as little surprise to those of us who launched that paper in 2001.

Managing editor Todd Murphy has quit in frustration after learning about a plan for sizable newsroom cuts that he didn't like. In the end the features section was eliminated, two reporters were laid off and one sportswriter was reassigned to the news section. It could have been much worse, and had Murphy not elected to leave, it probably would have been.

A clumsy approach to management and schizophrenic hiring and firing decisions have been par for the course for years at the Trib, which has been shrinking ever since it started up with a rousing speech from the mayor in Pioneer Square, tons of hype and a large pile of money from the man who was then Oregon’s second wealthiest citizen, Robert Pamplin, Jr.

I'm not anti-business

My first day back from a vacation week at the wind-swept Oregon coast, and I get a brutal tongue-lashing from the spokeswoman for Evraz Inc. North America.

It turns out she didn’t like my timeline detailing the dramatic transformation of Oregon Steel, from an industrial powerhouse employing thousands to a minor cog within a debt-ridden Russian empire. For starters she questioned me on my facts, which came from public records, news stories and company press releases. Then the conversation quckly turned, as such discussions often do, to motives. Before long she had suggested that I was anti-business for writing the piece.

I’m not anti-business. I’m anti-job loss. As anyone who has followed this blog knows, I give credit where it is due. But when a Russian oligarch who really likes big yachts buys a major Oregon employer and a few years later a vital player in the Portland Harbor is hanging on for dear life, I feel compelled to point out a few facts. It’s up to the reader to decide whether or not the facts are relevant.

Made in Oregon

President Obama’s new Transportation Secretary, Ray LaHood, is in Portland today to take a test ride on the first made-in-the-U.S.A. streetcar in 58 years. Make that Made in Oregon.

It’s part of a big brouhaha to commemorate the launch of the $75 million streetcar extension funded by the stimulus package. I have to admit I’m no fan of political pomp, but this is a ceremony with some serious substance behind it. Oregon reps tried and failed for years to get the Bush Administration to back the streetcar extension, only to lose out to the usual pile-up of highway projects. This very welcome policy reversal will create manufacturing jobs not only in Clackamas, where seven new streetcars will be built, but also at other local companies that will feed into a new regional production chain that could with luck grow into something resembling the Freightliner economy we are losing.

About a half-dozen public officials are climbing aboard for the ride, which is fitting since the deal is publicly financed. But maximum credit really should go to Chandra Brown, the hard-charging president of United Streetcar.

Hard green questions

It’s official. The Metolius is saved — sort of. The huge uproar to block a project to turn a former clearcut into an eco-resort less than a mile from the highway has left me with some green questions.

Score one for open-source jobs

An open source software company called Reductive Labs is coming to Portland with $2 million in venture capital and plans to create 10 jobs in the immediate future. The jobs are welcome, as is the trend behind them.

Reductive Labs specializes in open source software. Its main product, Puppet, helps organizations manage their networks. And according to Mike Rogoway’s Silicon Forest blog, the founders are a pair of Reed graduates who couldn’t wait to set up shop in Portland.

Which brings me to the trend. Portland has been hyped for some time as a Mecca of sorts for innovations with open source software, which has the advantage of releasing individuals and companies from the bonds of constantly paying for the latest Microsoft update. Most famously, Linus Torvalds, the great Linux guru, lives and works here. Oregon’s independent streak and open source software are a natural fit, and there are plenty of smart people out there passionate about putting it to work for the greater good. But for all the hype around open source and the mystique regarding Torvalds, real companies creating real jobs have been slow to develop.

An all-time high

Strike that last blog — the one where I drank the Kool-Aid and waxed optimistic about the coming turnaround. The new unemployment numbers are out.

By now, you have no doubt heard that Oregon's jobless rate is the highest it's been since the state began stacking unemployment consistently in 1976. You may also have heard that the job losses in May weren't as bad as was expected, with surprising signs of life in construction (up 1,700 jobs over April) and leisure and hospitality (up 4,900 jobs over April). Does that mean we're on the verge of bouncing back?

Wouldn't it be pretty to think so. Construction and tourism are inherently seasonal, and summer has come to Oregon at last. It's nice to see the new hires, but how do the numbers compare to a year ago?

Signs of life?

One of our super-talented interns is leaving us, and we hate to see her go, but I have to say I like the circumstances. She was on her second internship with us. The first time she left us because she was hired by a promising young company. Then she came back, after getting her hours drastically reduced at her new job amid fears the business would have to shut down entirely.

Turns out her company isn't going under. They're boosting her hours and expanding her responsibilities to keep up with new orders. And they aren't the only ones climbing out of the abyss. Banks are paying back their TARP loans, markets are rebounding powerfully, the clean tech sector is taking off and even Oregon's Index of Economic Indicators is showing signs of life, finally. Clean energy jobs grew by 50 percent in Oregon from 1998 to 2007. This doesn't counter the losses in timber and manufacturing, but it helps. My last six face-to-face interviews have been with two CEOs, an Intel Fellow, a consumer watchdog, and a federally appointed administrator, and not one of them mentioned the economy in ominous terms. That wouldn't have been the case a few months ago; what else was there to talk about then?

A year ago I was feeling more pessimistic than your average bear; now I've got the opposite feeling. The change might have something to do with my quest to find companies that plan to add jobs rather than subtract them over the coming year and beyond. Recent nominees include Bend's PV Powered, which scored another round of financing this week, Portland's Stalk Market, which may have solved the puzzle of the biodegradable coffee cup lid (hello? Starbucks?), the fast-growing flash video producer AngelVision and Chinese battery and car company BYD.