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Showing posts with label North Carolina business. Show all posts
Showing posts with label North Carolina business. Show all posts

Friday, March 12, 2010

As the Textile Mill Goes, so Goes the Community

USA Today

MOUNT AIRY, N.C. — Jane Knudsen was a 19-year-old mother of two when she went to work in a textile mill here in 1973. Jobs were plentiful: "When you started work, you thought you'd be there until you retired," she says.

She didn't make it. The mill shut down a few years ago. So she took a job with an auto supplier. Then she lost that one. Now 57, she's a part-time cook at the Surry County jail.

Knudsen likes the new job, but it's tough to get by on $10.39 an hour part time — about $2 an hour less than she earned in manufacturing.

"You have to give up on your quality of life," she says. "You don't go out and buy what you want. You buy what you need."

Here, in the place that inspired Mayberry of The Andy Griffith Show and in textile towns just like it across the Southeast, thousands of workers are starting over again, sometimes painfully, at ages when they thought they'd be planning retirement.

Mount Airy (pop. 9,500) has lost 3,180 jobs in textile and apparel plant closings since 1999, the North Carolina Employment Security Commission says. The nation has lost 707,000 textile and apparel jobs since January 2000 and nearly 263,000 since a trade pact phased out quotas on textile imports in January 2005, opening the floodgates to imports.

Those jobs won't be coming back: The Bureau of Labor Statistics says the three occupations that will lose jobs the fastest (on a percentage basis) from 2008 to 2018 are in textiles. The bureau expects textile and apparel manufacturing jobs will drop 48% to 259,000 from 2008 to 2018.

Textiles and garments "can be (made elsewhere and) brought in on a boat cheaper than we can make it here," says Neil Hagwood, who managed a textile plant in neighboring Elkin before it closed last year.

"I understand that free trade opens the door for some American businesses," says Hagwood, who majored in economics at the University of North Carolina. But, "That's hard to explain to a 50-year-old employee who's been running a loom or sewing blankets for 32 years."

"The pure laborer — the textile line worker — they're running out of options," says Greg Smith, director of occupational programs at Surry Community College. Textile jobs had provided opportunities to people with few skills and little education, paying them enough (up to $15 an hour) to finance a middle-class lifestyle here in the Blue Ridge Mountains near the Virginia border.

Mount Airy and other textile towns are struggling to replace the jobs lost when textile and apparel plants shut down.

"We were not prepared," says Teresa Lewis, a member of the Mount Airy City Council and owner of the WorkForce Carolina temp agency. "We've had a huge loss of jobs in the textile industry. A lot of those people had devoted 30, 35 years to one particular company, and they found themselves in their early to mid-50s without a job or without the skills to go into something else."

A reluctance to move

The unemployment rate in Surry County was 12.3% in December, higher than North Carolina's 11.2%, which was above the national rate of 10% that month.

Part of the reason: Folks don't want to leave. They'd rather endure a period of unemployment here than pull up stakes and find work somewhere else. So the population has stayed steady despite the economic turbulence.

"People aren't leaving in droves" like they're leaving the devastated Rust Belt towns of the Midwest, says Rick Kaglic, a regional economist at the Charlotte branch of the Federal Reserve Bank of Richmond, Va.

Main Street Mount Airy itself looks nothing like the boarded-up downtowns in much of Michigan, Ohio, Indiana and Illinois.

In fact, the town looks a lot like TV's fictional Mayberry. That's no coincidence. Andy Griffith grew up here, and the town has cashed in on the legacy.

Along Main Street there are real-life versions of Floyd's Barbershop and the Snappy Lunch cafe, where Sheriff Andy Taylor (played by Griffith) dined with Deputy Barney Fife (Don Knotts). Every year, thousands of tourists arrive for the annual Mayberry Days weekend.

The crime rate is low: Actress Betty Lynn, who played Barney Fife's long-suffering girlfriend, Thelma Lou, decided to retire here after her Los Angeles home was broken into several times. You can find her sipping coffee at the community college, waiting to attend a computer class.

But the place has been hammered economically. Pictured on Mount Airy's city seal are symbols representing the town's four economic pillars: tobacco leaves for farmers, a chair for furniture makers, a spool of yarn for textile workers and a block of granite for those who toil in the world's largest open-face quarry.

Furniture, tobacco and textiles are hemorrhaging jobs. Surry County lost more than 9,200 factory jobs in the 10 years before second-quarter 2009. Manufacturing accounts for 16% of jobs in the county, vs. 37% in 1999.

The textile plants that survive employ fewer people, rely on labor-saving technology and are trying to move to specialized products such as Repreve yarn, produced from recycled waste and plastic bottles at the Unifi plant in Yadkinville, about a 50-minute drive from Mount Airy.

"There's going to continue to be a textile industry in the U.S.," says William Jasper, CEO of Greensboro, N.C.-based Unifi. "The more automated and technically sophisticated parts of the process will stay here."

Unifi's Yadkinville plant is a humming, high-tech producer of synthetic yarn. It has 930 workers, but you don't see many of them, just a few folks driving forklifts and packing boxes. Unmanned "automated guided vehicles" follow electronic signals around the factory floor, stopping to retrieve huge spools of yarn with mechanical arms — work once done by human muscle.

During the past decade, Unifi has cut U.S. employment to 1,950 from 5,000. As Unifi has rebuilt its business, "We haven't had to bring all the people back," Jasper says.

Surry County once had about two dozen big textile mills, employing hundreds of people. Now only two employ 150 people or more. A sense of dread hangs over the surviving textile mills.

Dana Acker, 55, remembers what it was like. The textile plant where he worked shut down in 2003. "You're just waiting for the ax to drop," he says. "You don't know who it's going to hit next. Then you find it hit somebody you knew or were close to. And one day you find it was you."

When the ax falls

The ax hit Steve Jenkins in 2008. He'd started work in the Perry Manufacturing mill as a teenager, passing up a chance to play college baseball to unload trucks for a few bucks an hour.

"My family was poor," he says.

Gradually, he moved up the ranks, using his smarts to find more efficient ways to ship goods and buy supplies. By the time the plant closed, Jenkins, 51, was director of purchasing and earning $103,000 a year.

He'd built his own house, but he hadn't saved anything. He had to take out a mortgage to raise money to help a son who got into trouble with the law and to send his wife to Atlanta for cervical cancer treatments. She died three years ago.

Then Jenkins lost his job. Perry, which made sportswear and other clothing, couldn't compete with imports from Asia. After 32 years at Perry, Jenkins was laid off with no severance.

Desperate to save his house, Jenkins dipped into his individual retirement account (IRA), incurring tax penalties. He's still trying to resolve a $10,000 tax bill. The IRA funds didn't help much: He lost his home and had to declare personal bankruptcy. "My life's been turned upside-down," he says.

Devastated financially and emotionally, Jenkins had to find a new career at age 50. He hoped his experience and accomplishments would mean something to potential employers. They didn't. He had to compete with younger candidates who had college degrees.

Jenkins decided to study law enforcement at Surry Community College, hoping to become a police officer. "That is one job I cannot possibly lose to foreign competition," he says. "I didn't want to go through that again."

As soon as he saw his new classmates, he wanted out. Most were in their 20s, strong and guaranteed jobs at local police agencies: "I felt like a has-been."

But the program's director, Dean Gordon, told him he'd finish near the top of his class if he stuck it out. Gordon was right. And Jenkins held his own against his younger classmates, bench-pressing 250 pounds in the physical training coursework and earning the nickname "Stump."

Jenkins eventually found work as a deputy in neighboring Stokes County, where he has a small apartment. He's assigned to a middle school and loves the job. He volunteers as a wrestling coach, and the kids affectionately call him "Papa Stump."

But he's making $25,000 a year, a fraction of what he earned at his old job: "I'm still struggling. I'm living month to month."

Jenkins and other laid-off textile workers had at least one thing going for them: The Trade Adjustment Assistance program, financed by Washington and run by the state, pays for workers who lost jobs to foreign competition to go back to school for up to two years of retraining. They also receive extended unemployment benefits to help them make ends meet while they're in school.

As a result of the trade assistance and other retraining programs, Surry Community College has taken the lead in preparing the area's unemployed for an uncertain economic future.

The school has had success stories, including several laid-off workers who wound up working at the college itself.

Colleen Johnson, 43, a former textile worker who's studying at the college to be a legal secretary, says she's seen her classmates struggle after graduation to find jobs with courts or law firms. She figures she'll have to look for work in a bigger market: Winston-Salem, 40 miles southeast of Mount Airy.

Perhaps the college's most ambitious plan is turning textile workers into winemakers, says Carmen Eldridge, director of the college's Workforce Development Center.

North Carolina's entrepreneurs have been planting vineyards to replace tobacco fields and starting wineries to draw tourists. Across the state, the acreage set aside for vineyards has more than doubled since 2000. North Carolina is now No. 10 nationwide in growing grapes and No. 7 in making wine.

Surry Community College is turning out graduates who can grow grapes, apply pesticides, make wine and market vintages. The college has a 4-acre vineyard and sells wines under its Surry Cellars label. Graduates of its viticulture and enology program can find work in vineyards for up to $17 an hour and as winemakers for up to $70,000 a year.

"If you've got to go back to school at age 50, pick a major where you can drink," jokes Acker, who went from running computers at a textile plant to developing wines and liquors for Buck Shoals Vineyard & Winery in Hamptonville, N.C.

He loves his new career and makes more than he did in his old one. "I do something that makes people happy," he says. "I've never had anybody speak to me angrily at the winery."

By contrast, Acker has bitter memories of his last days at the textile plant. "It was heartbreaking to see some of these people who were in their 60s and didn't have many opportunities ahead of them. … They'd come to work every day for 30, 40 years until, boom, it's, 'Go home, now.' "

Knudsen lost her job at a textile mill after spending most of her working life there. But her daughter still works at one of Mount Airy's surviving plants. They both know the textile plant is doomed: "It's only a matter of time." Her daughter's Plan B: learning to decorate cakes.

Jenkins, his life devastated by a plant closing, has advice for those still hanging on in the textile industry: "Plan for your future. Nothing's concrete."

Wednesday, April 29, 2009

Maybe Now IS The Time To Start That Business
Story from American Chronicle


Opening a new business requires a dose of bravery in any economy.

The challenges only mount during a downturn. For starters, customers and lenders get stingier with money. Still, this recession, as in past slumps, is sparking a surge in wannabe entrepreneurs striking off on their own.

"Smart and hard-working people lose their jobs, sometimes with severance packages, and no one is hiring," said Thomas Miller, head of N.C. State's Entrepreneurship Initiative, established in July to foster start-up activity. "It's the perfect opportunity to take a shot at that good idea you've always had in the back of your mind."

With the state's jobless rate rising to record levels -- employers cut 41,300 jobs in March, and unemployment shot up to 10.8 percent -- it figures that more workers are considering other options.

Local organizations that help fledgling business owners, including Wake Technical Community College, SCORE and the Council for Entrepreneurial Development, report big increases in demand for classes, seminars and other assistance.

Some are ventures that will always remain one- or two-person operations. Many will fail. But a few could blossom into successful employers that bolster this region's economy.

A year ago, Wake Tech offered one Planning the Entrepreneurial Venture course. Now there are four, with two more starting soon. The $65, 10-week class teaches students how to write a business plan, marketing basics and more.

"Does a business have legs, can you make money at it? That's one of the keys," said Fred Gebarowski, director of entrepreneurship at Wake Tech. "I'm providing a service by keeping some people from starting a business."

It's not just the newly out-of-work that turn out for classes. "Some people are still employed, but want to ramp up their side business, just in case," he said.

Audra George had a full-time job as a legal consultant in late 2007 when she started making speciality cakes, decorated cupcakes and other baked goods out of her North Raleigh home.

She was let go a few weeks ago. Now she's sinking all her time and energy into her business, Audra's Cakes and Creations.

"Of course it's scary," she said. "I always had the security of a job before this. Sometimes things do happen for a reason."

George, 37, makes four to five dozen cupcakes, as well as some rum and amaretto cakes, each week for A Southern Season, the gourmet food store in Chapel Hill. She's in talks with Whole Foods. And she sold her first wedding cake last month. The couple wanted a cheaper option than a traditional cake, so George made a small six-inch cake surrounded by 100 cupcakes.

As she started her venture, learning how to write a business plan was crucial. "I needed to figure out how many cupcakes I had to bake and sell to make a profit," George said.

And she's had to adjust her business model -- she resisted seeking wedding business at first. Now she's hoping word of mouth will attract more. And she's looking ahead to the fourth quarter and the typically busy holiday season. If she can build her client base by then, she expects her business will become profitable. Eventually, she'd like to open a shop.

"In order to move it to the next level, it's going to take a lot of discipline," she added. "Hopefully, things will get better."

Sometimes hard work and a good idea aren't enough, especially during down times. For every recession-era success story -- think Microsoft -- the landscape is littered with failures.

But in some cases, a recession can be a smart time to start a venture because owners learn to make it on a shoestring budget. And choosy customers quickly weed out weak ideas.

"You've got to understand that you're going to be living on the edge financially for some time," said Bob Pickens, recently named director of entrepreneurship at CED, a nonprofit in Research Triangle Park. "It's not for everyone in good times, and it's certainly not in bad times."

Running with an idea

Joe Philipose and Lesley Stracks-Mullem hatched plans for Taste Carolina Gourmet Food Tours last fall. The business partners are forging ahead despite the recession. In March, they started running tours of restaurants, wine bars and other foodie attractions in Durham, Carrboro and Chapel Hill. The Durham tour is gaining fans, with eight or more people each time. Chapel Hill has been a bit slower going.

Tours in Raleigh start Saturday.

"We're doing our best to make money, but we see how tough it is," Philipose said. "We know people don't have a lot of money to spend."

But the owners are passionate about local food, and they know others are, too. The tours ($37 for three hours) offer tastings, a chance to mingle with restaurant owners and chefs, and exposure to new eateries.

Philipose, 36, went to law school but had been doing corporate strategy for drug makers. Last year, he got laid off by Biogen Idec. That hastened his dream of starting a food tour business. He met Stracks-Mullem, 35, who had a similar idea, through a Durham restaurant owner.

"We're definitely taking a long-term view of this," she said. "We've been in business six weeks and we're really pleased with the progress."

They've started marketing the venture, are trying to attract corporate and alumni tours and are considering themed tours -- based on shows at the Progress Energy Center for the Performing Arts, for example.

"It's natural to be nervous," Philipose said. "Do people have less disposable income? Yes. But in times like these, people take time for little luxuries."

Their business is a relatively low-cost endeavor. There are marketing costs, but mostly just lots of hours that Philipose and Stracks-Mullem put in.

And Philipose does have a back-up plan: He recently took a job with Kerr Drug as vice president of strategic planning and business development.

Seed money for nappies

Securing money to start a business becomes a major hurdle in down times. This recession has lenders tightening loan requirements more than ever.

"Banks like a sure thing," said Jerry Lustig, a retired IBMer who is chairman of the Raleigh chapter of SCORE, which taps retirees to counsel small-business owners.

Karissa Binkley realized she needed a few thousand dollars to start a high-quality, eco-friendly diaper service. So she turned to a friendly face for a loan: her grandmother.

Binkley, 30, is a birth doula who helps about two women a month through childbirth. Her family is Dutch and very supportive of natural childbirth.

The Triangle Diaper Co.'s Web site is up and her service officially opens May 4. Binkley, who lives in Cary, sat down with her husband before starting to plan her business selling organic cloth diapers washed in green detergents. He agreed with her assessment that there was an underserved niche, even in a recession. Costs start at $50 a month for 25 diapers a week. A "welcome baby" 12-week package is $285.

Binkley has training in writing business plans, so she built three spreadsheets based on different sales projections.

"The first couple of months are really going to make or break me," she said.

Although she didn't have customers signed up last week, she has consultations scheduled with five mothers, and inquiries from more that are expecting in coming months. She is getting support from several OB-GYNs, the UNC-Midwives practice and others who are giving her information to prospective clients.

"Doors keep opening -- people have been looking for this," Binkley said. "As long as I'm not greedy, I think things will work out. I believe in karma, but you still have to have some business sense, too."

A warm fuzzy

Karen Diebolt didn't feel much pressure when she started her small business because she had a day job as a commercial loan officer. Then in July she was laid off.

"Running your own business is hard, but looking for a job in this economy is really tough," she said. So she turned her complete attention to Softedz, which sells soft, fuzzy creatures for corporation promotions and special events.

Its origins came from Thanksgiving with family in Savannah, Ga. After dinner, Diebolt would help organize crafts. Her sister suggested she take her skill and try making money at it.

She took a Wake Tech class and a series of online seminars. She learned about business plans and online selling. She found a manufacturer in China and secured a supplier.

Now she needs customers.

"It's hard for businesses to spend money on promotions when business is slow," said Diebolt, 54, of Wake Forest.

As she waits for corporate business to perk up, Diebolt is selling some Softedz with a friend's food products from a booth at Magnolia Marketplace in Raleigh. A store in Savannah will start selling them next week. And she's trying to sell them to kids' sports teams as an alternative to trophies.

She's not ready to give up.

"I believe this is a viable idea," Diebolt said. "The timing just turned out to be not as good as it could have been."