Downturn no respecter of incomes
Posted on Sunday, November 23, 2008
FORT SMITH — In October, Carter Fujibayashi was laid off from his job producing television commercials for Cox Media.
“I knew there would be some major changes,” he said. “I didn’t think it would start with my level and go down.”
Fujibayashi, 50, said a regional vice president drove from Wichita, Kan., to Fort Smith on Sept. 14 to break the news. It was the same vice president who visited Fujibayashi in the hospital after he had a brain hemorrhage in 2003.
“He apologized,” recalls Fujibayashi. “He said because of the economy, they had consolidated my job with one in Wichita.”
The recession has thrown executives and middle-management employees out of work nationwide.
With higher salaries, those jobs are more at risk than ever before, even in Northwest Arkansas, where Wal-Mart Stores Inc. and its suppliers have somewhat helped insulate the area from economic downturns.
Originally from Chicago, Fujibayashi worked for Cox Communications for nearly 13 years, first as a technician and auditor, then as a producer for nine years in the Cox Media division. His last day at Cox was Oct. 31.
Fujibayashi said Cox Communications gave him a severance package, which will hold him over through the Christmas season.
And the company hired an executive job search firm to help him find a job. So far, he has applied for 12 jobs.
CLIENT SHIFT Eighteen months ago, the headhunters at Fayettevillebased B. O. S. S., or Back Office Support Specialists, helped corporations find executives about 85 percent of the time. Back then, the executive-placement experts at the firm spent only about 15 percent of their time preparing laid-off execs for new jobs.
Now, the split is about 50-50, said Don Marr, the firm’s owner.
“There’s been a slowing of growth in white-collar jobs in Northwest Arkansas,” said Marr, a former Fayetteville alderman. “I think everybody is just on the edge. Nobody really knows where it’s going to go.”
The hardest-hit industries have been banking, finance, development and construction, Marr said.
“Two years ago, I couldn’t find enough [construction ] project managers,” he said of his firm, formerly known as HR Factor. “Today, I don’t even have a job order for one.”
Marr said companies are laying off more high-level executives than before, especially when two similar companies merge.
“I think it’s teaching highlevel executives that skill growth and staying at the top of their game is extremely important,” Marr said. “The more engaged they are and hands-on in the business, the more protected they are.” Marr said laid-off executives often aren’t prepared for the pay cut that usually accompanies the shift into a new profession. “You do take a step back,” he said. “People aren’t going to pay you just because you had that. As long as the time clock ticks, the more flexible they become about what they will take.” Marr said he believes there are some benefits for companies that have been downsizing. “I think part of this is good,” he said, “because it’s caused businesses to say, ‘How efficient are we ?’”
CHANGING CAREERS Cameron Smith, owner of Cameron Smith Associates of Rogers, said he’s seeing more unemployed executives at his placement agency, which works primarily with Wal-Mart suppliers. He gets about 100 resumes a month from the “general public.”
In some cases, a vice president who has been laid off at a bank will contact Smith about being hired by a Wal-Mart vendor, but that can mean an initial pay cut from a job making more than $ 100, 000 a year to one making about $ 50, 000 a year.
“They would have to step back to that $ 50, 000 range, and they won’t do it,” he said.
Smith said people sometimes have to go back a notch or two to move ahead three notches later on.
Smith said he places between 40 and 70 jobs a month for Wal-Mart vendors.
Long considered the state’s economic engine, Northwest Arkansas’ unemployment rate has grown slightly from 3. 2 percent in September 2005 to 3. 5 percent in September 2008, the last month for which regional data is available. During the same time, the unemployment rate for the state decreased from 5. 2 percent to 4. 9 percent.
Northwest Arkansas began to see a slowdown in construction in 2006. Since then, it has only gotten worse.
With housing sales at the lowest point since 1991, Bill Burckart, owner of Burckart Construction Inc. of Bentonville, said he’s had to cut his staff by 70 percent over the past three years.
“It’s now down to myself and my bookkeeper,” he said.
Across Northwest Arkansas, people who had good jobs in the construction sector are now trying to get jobs driving trucks, loading lumber or digging ditches, Burckart said.
“Construction was the engine” for the region, he said. “The engine has slowed to a crawl, and unfortunately a lot of hard-working people need help right now.”
Burckart, a past president of the state and Northwest Arkansas branches of the Home Builders Association, said the downturn in construction has resulted in a “complete credit freeze.”
“This isn’t over,” he said.
On Nov. 4, Burckart was elected to the Bentonville City Council, where he hopes to be a staunch supporter of small businesses.
“Now is the time that we need to work together to promote small businesses and jobs,” he said. “It is small businesses that will bring us out of this recession, both locally and nationally.... It is the spirit and will of small-business owners that makes them survivors.”
Brent Hanby, chief financial officer at Springdale-based National Home Centers, agreed.
“It’s not a recession in the housing market,” Hanby said. “It’s a depression. It’s a true depression.”
Hanby said National Home Centers, which operates nine lumber yards and attached retail stores in Arkansas, has cut its number of employees from about 1, 200 three years ago to a little over 600 now. Those cuts included a mix of higher- and lower-paid employees.
Hanby said the construction business in Northwest Arkansas began heading south in March or April 2006, before the national trend.
“We were probably growing faster than we should have been,” he said. “Supply just got much higher than demand.”
And this downturn is lasting much longer than previous ones, Hanby said. After dips in housing construction in 1982, 1989 and 1997, it took from one to 1 1 / 2 years for the “correction” to play itself out and the market to turn around. But this time, the downturn is pushing three years.
“I don’t think anybody knows when it’s going to end,” he said. “This is by far the toughest one.... People are definitely scared.”
But the end won’t come until the excess inventory of empty houses in Northwest Arkansas — between 1, 500 and 1, 800 of them — is sold, Hanby said.
Hanby wouldn’t reveal National Home Centers’ sales numbers because the company is private, but he did note that publicly held companies that cater to contractors have seen business drop by 30 percent to 40 percent over the past two years.
Another major problem is that construction companies often have no recourse if a buyer refuses to pay for work. Liens on property for nonpayment become worthless when a house goes into foreclosure, Hanby said. And Arkansas’s usury law caps the interest rate on collection at 7. 25 percent.
CUTTING BACK This is the second time Fujibayashi has been laid off because of the economy. In 1995, he was downsized from his job at Sampling Technology Inc. in Waldron, which makes environmental air monitors. Fujibayashi said his family understands their current economic situation.
He has a wife, five grown children and five grandchildren. This Christmas, only the grandchildren will receive presents from Fujibayashi and his wife, instead of the entire family.
“We’ve cut back quite a bit,” Fujibayashi said. “We don’t eat out as much. We haven’t gone to a movie or any outside entertainment unless it was free.”
Their house is also suspended in mid-renovation. The carpet has been torn out awaiting hardwood floors that they now can’t afford.
“We don’t have the money to finish it,” Fujibayashi said.
Moving is a possibility, but the couple wants to remain in Northwest Arkansas or the Fort Smith area, if possible. Besides television production, Fujibayashi also has experience in marketing, environmental engineering and graphics, so he thinks the diversity of his background will help him land another good job.
For three years, Fujibayashi’s wife has had a part-time job maintaining photo booths, massage chairs and rides for children in area shopping malls.
Plus, the severance deal from Cox Communications will help the family get by for a few months.
Carter Fujibayashi said he will be eligible to apply for state unemployment benefits in February, citing the package.
“I’m not worried about the day-to-day stuff, but next year I’ll have to get my nose back into seriously looking for a job,” Fujibayashi said.
FEEDBACK:
Something to say about this topic? Submit a Letter to the Editor online
