Save the date for EDCO's Annual Luncheon - Thursday March 5, 2009 - Just Four Weeks Away
As hard as it is to top last year's prophetic (and humorous to boot) economic outlook from Alan Beaulieu of the Institute of Trend Research, this year EDCO brings an even more recognized economist, Ross DeVol, from the highly regarded Milken Institute. For more than 15 years, the Milken Institute has used capital-market principles and financial innovations to address social and economic challenges, from energy independence to poverty, here in the U.S. and abroad. Going beyond chart reading and forecasting (does anyone need an economist to tell how tough times are?) the Milken Institute helps businesses and organizations implement new policies and ideas to create prosperity.
Mr. DeVol oversees the Institute's efforts on the dynamics of comparative regional growth performance. He advocates building strong regional economies. Find out more about the Milken Institute and Mr. DeVol.
- Time: 11:30 am - 1:30 pm
- Location: The Riverhouse Convention Center
- Cost: $50 for EDCO Members and $60 for non-members
- Corporate tables $460 for a table of 10
Contact: dayna@edcoinfo.com or call 388-3236 to RSVP. Our thanks to our Title Sponsor, Bank of the Cascades, and to Schwabe, Williamson & Wyatt, our Supporting Sponsor, for making this event possible.
Central Oregon Economic Outlook – Fasten Your Seat Belt for a Rough(er) Ride
It’s not news that the U.S. is in the midst of what will likely be the longest post WWII recession. If the National Bureau of Economic Research (NBER) is correct on the start of this recession, it could easily go 24 months – eight longer than in either the early 1970s or 80s. The latter was especially tough for Central Oregon. How much better 2009 will be than 2008 time will tell; however, we can certainly expect:
- lower year-over-year employment in the tri-county area;
- near record unemployment rates (a function of both continued population in-migration and shrinking job base);
- continued real estate price deflation (but less than the last 18 months); and
- persistently tight credit markets.
The big question is: when do we get to the bottom? Optimistic forecasts predict the economy to bottom out at year’s end. Pessimists say 2011. Somewhere in 2010 is most probable. Regardless, it’s going to be tough going for probably most of the next year and a half.
But before donning the cloak of doom and gloom, let’s put in perspective where we’ve come from. First, using NBER’s estimates, we’ve just weathered 13 months of recession during which the U.S. lost 1.5 million jobs. Meanwhile, we recorded year-over-year employment gains in Deschutes County for every month in 2008 except for December. In fact, there are roughly 20,500 more jobs in the tri-county area today than in 2000, over 27% growth. In contrast, U.S. employment grew by 6.2% during the same period.
A healthy share of new job growth in our region has come from companies that started right here and expanded. Organic growth. Some of the most interesting and promising business development projects we’re seeing right now aren’t divisions of large companies looking to locate here but, rather, new ventures founded by people with a depth of professional experience. They assert that now is the ideal time to start a venture because the talent pool and its availability in Central Oregon have never been better. Throughout our history, tough economic times in the U.S. have tended to produce a sturdier crop of entrepreneurs and the companies they start. We could well be in one of those periods.
In the short term, that trend will come as little comfort to those who have lost their jobs or businesses and whose credit scores have been pounded. Keep in mind that 90% of this recession was about the business cycle and other global macroeconomic forces (not just the financial fiasco) and out of our (and government’s) control. Remember also in the words of economist John Mitchell “There’s never been a recession that we’ve not emerged from.” Better times will come. Our challenge now is to make the most of the time and current situation to be ready when they do.
Some Bright Spots Amid the Gloom
Tired of the onslaught of negative news about the economy? Looking for a few glimmers of hope among the pessimism? Here are six local companies that are faring quite well in this rough economy. They have two main things in common: a product niche and revenue diversity – a theme EDCO encourages both for the economy and individual businesses.
There's been considerable press for Warm Springs Composite Products (WSCP), EDCO's Annual Award winner for Manufacturing Excellence in 2008. WSCP attributes its growth to opening the door (pardon the pun) to the Middle East market for their fire-rated doors, supplying the world's tallest building in Dubai with their products. Another key to success is the company's proactive search for new products outside the building industry and diversifying their offerings.
In 2008, Vocalbooth.com experienced 18% growth in sales of its personal sound recording studios. International sales were up an astounding 45% over 2007, partly due to the low dollar and the European recording industry's fondness of a well made product.
Outback Manufacturing, a precision machining company, has been busting at the seams in their current building for several years and plans to build a new facility at Bend’s Juniper Ridge when land is available. 2008 saw explosive growth (triple digits) and the addition of five employees. And, 2009 still looks promising. Through the years, Outback has served a strong base of customers in many different sectors as well as seeking out potential business in emerging high technology markets that will carry the company into the future.
Ruff Wear experienced double-digit growth in 2008 over 2007. In spite of the downturn in the economy, consumers are still spending when it comes to their pets. According to an early December 2008 AP poll, 85% of pet owners have not cut back on spending regarding their pets. Ruff Wear is fortunate to be in the business of making products that appeal to active dog owners and their canines. The company has grown business in both the US and internationally. In 2009, they will stick with the strategy that has led to consistent growth: to provide high-quality performance dog gear that enhances and inspires interactive relationships between people and dogs. Ruff Wear has some exciting new products that will debut in 2009, so they're looking cautiously forward to a good 2009.
Amid the struggling economy, MEDISISS is also growing. A medical device re-processor, MediSISS offers an easy, practical answer to cutting costs as margins tighten - saving up to 50% by sending in used devices to be refurbished to like-new condition. These savings allow medical facilities to sustain and even enhance their level of care while significantly reducing the amount of waste that goes into land-fills. MediSISS has seen business grow 15% in recent months and added 10% to their workforce over the last two months turning out a record breaking December and January. While many companies are cutting back, MEDISISS is expanding. They are excited to move into the first quarter of 2009 with receipts at their strongest level in history. In addition to growth, MEDISISS is expecting to launch a new product early second quarter.
Deschutes Brewery is bucking national economic trends by gaining market share with a quality product that continues to attract notoriety in the craft brewing world. To meet continued growing demand, Deschutes is looking at an expansion project that would add 10 new 45-foot-tall fermentation tanks outside their existing facility. The company’s beer production increased from 162,000 barrels in 2007 to 180,000 barrels in 2008 – making it the 7th largest in the U.S. in terms of total volume of beer sold among the nation’s craft brewers. Growth within the next five to 10 years could include building a new packaging and warehouse facility on seven acres immediately east of the existing brewery building.
UCSB Economic Forecast Project predicts bleak years ahead
University of California Santa Barbara’s Economic Forecast Project came to Bend last week with a national, state and Central Oregon region presentation on what it expects for the next 18months. The presentation kicked off with a summary of real estate, which included a forecast of rising vacancy rates for commercial property and continued deflation for residential markets. The presentation illuminated some of the root causes for the boom and bust including a federal policy goal to increase homeownership in the U.S. As a result, government-backed financing giants Freddie Mac and Fannie Mae ended up holding or selling nearly half of the total $12+ trillion residential property debt in the country. As a possible solution to freeing up credit markets, it was suggested that the government (federal, state, local) might purchase distressed residential properties to help banks clear their balance sheets and get back to lending.
The importance of regional economic development efforts for industry diversification was emphasized, as the area has had a historical over-reliance on the construction industry. Economist Bill Watkins wrapped up the presentation with a general forecast that predicted a period of higher inflation, higher taxes, and a long slow climb out of current economic conditions. Noted numerous times was the impact of government stimulus packages, which he and most other economists predict will have a negligible effect other than to extend the downturn by not letting the business cycle run its course. The outlook forecast tri-county seasonal unemployment hitting 15%, negative job growth, but sustained (though lower) population growth.
For those who missed the forum, BendBroadband has made it available in its entirety. To find the program on BendBroadband, go to the On Demand menu, COTV, Local Events. The program is titled “Economic Outlook.”
Central Oregon Companies: Look No Further than Your Own Backyard for Sophisticated Fabrication Capabilities
You may know of Madras-based Keith Manufacturing for its freight conveyors and uploaders, but did you know that they have a sophisticated internal facility for metal fabrication? Keith’s sideline business, developed to control quality in the production of their primary products, can also serve other businesses’ metal needs. Altogether, Keith has capabilities for metal fabrication (welding and forming), machining (milling and trimming; they have EDM machines), and extrusion (plastics). Contact Ken Stout at 541-475-3802. Another company with capabilities of which you may be unaware is Bright Wood, with a sophisticated facility for metal fabrication. Contact Rick Hazen at 541-475-2234.
Does Your Company Have a Secondary or Sideline Business—Beyond Your Main Product or Service—to Offer? Let Us Know
With revenue diversity being a survival key to the current economy, we’re interested in capturing viable secondary businesses that others could benefit from. Let EDCO know by contacting Ruth Lindley -- we’ll organize the data and get the word out.
Leadership Changes in Store for 2009
The Central Oregon region is destined for changes in several key community leadership positions in the years ahead. Half of the region’s full-time City Managers are expected to be new – filling vacant positions in Redmond, Prineville and La Pine. In the meantime, each city has been using existing staff or interim managers given tight budgets. In Redmond, Assistant City Manager and HR Director Sharon Harris has taken on the challenge with support from other department heads until a replacement is hired – a recruitment process that could last into late summer. In Prineville, the City Council expects to gear up its executive search this spring to replace interim City Manager Wayne Van Matre who expects to retire after his service. La Pine, which has struggled to keep a full contingent on the City Council, will try to replace its first City Manager, Christine Nelson, to help the only other full-time employee, city recorder Luana Damerval.
Meanwhile, two Chamber of Commerce directors have left their posts last month in Sisters and La Pine. Both organizations are moving forward with filling those vacancies.
Both very public and high profile positions, cities and chambers of commerce leaders have high average turnover rates nationally. The average Chamber of Commerce director in the U.S. serves 6 to 7 years. The longest tenure in the region is Eric Sande, Executive Director of the Redmond Chamber, who will have been in that position 10 years position next month. The newest is Prineville Chamber director Brandi Hereford, who took the post April of last year.
For city managers, the average tenure nationwide is 3 to 5 years. Eileen Stein, City Manager of Sisters, has been longest in her position, taking the job in 2001. Bend City Manager Eric King in the newest City Manager, taking that position last May.
SAO Offers Tech Companies & Sole Proprietorships Health Insurance with Membership
In the face of unprecedented economic downturn, a key Oregon industry group has managed to offer a significant benefit package for its members – health insurance. On January 30, the Software Association of Oregon (SAO) announced that it is partnering with Regence Blue Cross/Blue Shield and Coordinated Resources Group to offer its technology members a major healthcare and benefits package. The plan not only offers competitive pricing, with full benefits at rates 5% below the Regence direct rate, but provides real coverage options for a growing business segment not usually eligible for group plan pricing: single employee companies. Click here for more information about becoming an SAO member and/or regarding the announcement.
REDI Looks to Gain Traction on Rail Service Solutions
For many of REDI’s larger prospective recruitment projects, rail freight access is on the “must have” list. Even smaller companies express interest in rail to access both raw materials and ship finished goods.
Burlington Northern Santa Fe (BNSF) and Union Pacific (UP), both class-one national railroads, have shown little or no interest in local railcar deliveries or pickup for new customers. Currently, a handful of spurs with existing customers provide “piggyback” services to a business wishing to access rail freight. Additionally, there’s an option to truck freight to the Prineville Railroad to move the products. However, these two options cost significantly more than a designated rail track segment or service hub located on the mainline between Madras and La Pine.
For the past several months a Redmond “Rail Team” has been meeting to try to develop a solution. The stakeholders, Sponsored by the Central Oregon Area Commission on Transportation (COACT),the group of stakeholders includes all the involved parties: Cities of Redmond, Prineville, Madras, and La Pine; Deschutes County; all EDCO entities; ODOT Rail Division; ODOT Region 4; Prineville Railroad; and the Department of Land Conservation and Development.
The group’s goals are to: 1) enhance and preserve our railroad freight mobility and 2) improve the safety and efficiency of our railroad crossings. They intend to seek the support of public officials, business, and the general public, followed by final recommendations to the railroad.
EnergyTrust Offers Quick Payback on Lighting Control for Business
New lighting technologies can greatly reduce energy consumption and provide cost savings in manufacturing and office buildings. Infrared, ultrasonic, microphonics and smart sensors can be used to turn lighting on and off, and combined with control and relay panels, light sequences can be rotated, dimmed and programmed to get maximum life from each light source and reduce maintenance costs. Advanced technologies are more affordable today, especially when companies take advantage of significant incentives provided by Pacific Power and government entities. For either new or existing buildings, there is a significant ROI and fast payback for utilizing new technologies.
EnergyTrust of Oregon administers the incentives and rebate programs. They also counsel companies on how to reduce their energy consumption, will evaluate your site, and recommend costs savings equipment.
New Buildings: Diana Fischetti, 541-870-0914;
Existing Buildings: Liesl Karasaki, 503-243-1712 or Doug Oppedal, 503-382-9359
Prineville Company Isn’t Feeling Pinch of Recession
Tucked away on a small, two-acre lot at the east end of Prineville on Highway 126, Ochoco Manufacturing Corporation (OMCO) often goes unnoticed. “Most people don’t know we're here – including many locals – and that’s how we like to do business: quietly,” says owner Dorless Reid.
Founded in 1976, OMCO manufactures high end tanker trucks that are used as de-icers, fire trucks, street cleaners, and vacuum pumps, along with other specialized uses. The tanks range in size from 2,000 gallons to 6,000 gallons, all of which are made in the Prineville facility. OMCO does most of its business outside of Oregon, with various local and state agencies in Washington, Hawaii, Minnesota, and Canada. They also do work locally, having delivered two new fire trucks to Crook County Fire and Rescue in 2008. All of the tankers are custom made to meet the specific needs of a city or state road crew, and some are even outfitted for multiple uses.
“We can make a truck that has a de-icer system on it, works as a fire truck, can pump sewage and clean streets. If someone wants all the bells and whistles, we’ll make it for them,” explains Reid. The 12-man crew can deliver about one truck per week, which starts with the creation of the tanks and ends with the assembly of sprayer and control parts, along with wrapping hoses around the reels. Reid says OMCO is fairly recession proof because many cities and governments rely on the tanker trucks for maintenance and public safety purposes. Reid says, “Many of our customers bought tankers from us back in the 1980’s, and now they need to upgrade. It’s really something these cities and road crews can’t go without.”
Reid has lived in Prineville for over 60 years and continues to work six hours a day as owner and President. She’s a past member of the Prineville Planning Commission and City Council, currently volunteers on the hospital board, the airport commission, and helps the Soroptomists apply for grants. Most people at her age would be retired by now, but Reid doesn’t it see it that way. “Working hard and being involved in your community is the backbone of small communities. I’m proud of the product we create and I couldn’t imagine not being a part of this,” says Reid.
Jefferson County Update
Unemployment continues to rise in Jefferson County, as with every other county in the state. Currently the unemployment rate is 13.3%, with 151 jobs lost since November 2008 and 509 jobs lost since a year ago December (2007). While manufacturing took another hit, there were also jobs lost in education and health services, leisure services, and in government services.
Companies with export sales still are faring better with slightly stronger demand for products than the domestic market. Throughout industry and government, everyone is looking at belt-tightening measures to keep workers and to keep products and services moving ahead. With market confidence low and working capital restricted, our judgment is that companies need to sense the bottom is near before they start investing in new business or expansion.
The City of Culver is planning a request to have the current Enterprise Zone (Madras and Metolius) expanded to include them and we (EDCO) will fast-track this application. Culver is also negotiating to acquire additional land to enlarge their sewage treatment plant in anticipation of both business and residential growth.
In Madras, High Desert Organix is close to securing their conditional use permit for a compost facility east of town. This company will effectively serve the agricultural and waste management community to utilize unusable organic material and yard clippings to produce a natural fertilizer for farm and garden.
Problem Solving – The Toyota Way
Mike Hoseus, former Toyota executive, current Toyota-sanctioned consultant, and a Central Oregon favorite returns for part two of his four-part Executive Forum series titled “Problem Solving: The Key to Toyota.” Problem solving is the foundation of the Toyota Way and what the company calls “their competitive advantage.” The tools of a lean production system are designed to identify problems and the extent to which a company trains and engages its employees in problem solving will ultimately determine its success. Whether you are a manufacturing company on the lean journey or an office-oriented business looking to improve processes, this workshop will illuminate the importance of effective problem solving in your organization.
Date: Thursday, February 19, 2008
Time: 8:00am - 5:00 pm (continental breakfast and lunch provided)
Location: Phoenix Inn, Bend
Cost: $20.00 for HiDEC members and $50.00 for non-members
Contact: Eric Strobel at 541-388-3236
UPCOMING EVENTS
Breakfast Briefing Series – Tompkins HR Group
Tompkins HR Group continues its Breakfast Briefing Series, 7:30 – 8:30 am, with topics drawn directly from the issues Central Oregon companies are contending with. February’s session will focus on right-sizing with respect for both the employer and the employee, March’s topic will be the development and maintenance of professional boundaries, and April’s topic (of special interest to non-profits) is differentiating between employees and volunteers when they may be one and the same person. Cost is $15 per session and includes coffee and breakfast items. Briefings are at Tompkins Bend office: 780 NW York Drive, Suite 202. Register in advance by calling 541-749-9982 or email craig@tompkinshrgroup.com.
February 12: Right-Sizing with Respect
March 12: Developing Professional Boundaries for your Organization
April 8: Volunteer vs. Employee
February 11 Opportunity Knocks presents "Closing the Deal: Sales From Start to Finish"
OK has pulled together a dynamite trio to help you improve your sales process and produce immediate results. Join presenters Dennis Hungerford, partner in Sandler Training; David Knuff, Assistant Professor of Marketing, Ph.D., OSU; and Bill Scannell, President of Structus Building Technologies. The event is February 11, 11:15 am to 1:30 pm at The Phoenix Inn, 300 NW Franklin Ave., Bend. Cost to OK members is $30 and non members pay $45; the price includes a bag lunch. Click here for more information.
Mark your calendar for OK’s "Creating Loyal Customers: How to Keep Your Best Customers with Stellar Customer Service"
Part of Opportunity Knocks’ Best Practices series, this March 11th brown-bag event is designed to be interactive, helping you develop actions to meet today’s tough marketing and service problems. We’ll delve into how to identify best customers, how to inspire your team to deliver exceptional service, and look at how shifting consumption trends are changing both consumer behavior and expectations. Presenters are Moe Carrick (Moementum), Ali King (An Affair to Remember), and Ruth Lindley (EDCO). They offer expertise from three different but synergistic perspectives--service training, internal marketing, and corporate culture. The event is 11:15 am to 1:30 pm at The Phoenix Inn, 300 NW Franklin Ave., Bend. Cost is $30 for OK members and $45 for others and includes a brown bag lunch. Click here for more information.
Renewing EDCO Members
We’d like to thank all of our renewing members for supporting our efforts to diversify Central Oregon’s economy. We appreciate your continued commitment to what is typically a multi-year process to recruit new businesses that bring family wage jobs to the region.
Individual
Coldwell Banker Morris Real Estate – Norma DuBois - 1995
Compass Commercial Real Estate – Peter May - 2007
Duke Warner Realty – Kitty Warner - 1983
Edward Jones Investments – Brain Stallcop - 2006
Merlot Mortgage – 2005
Project Development, LLC - 2005
Steve Scott Realtors – Brian Meece - 1996
Windermere Real Estate, LLC – Patty Dempsey – 2006
Windermere Real Estate – Hallie Dew - 2003
Bronze
Ater Wynne, LLP - 2007
Ball Janik - 2001
Barrett Business Services – 2005
BBT Architects - 2000
Bend Garbage & Recycling - 1986
Carlson Sign - 1987
Deschutes County Title - 2005
DuBois Wicklund Group - 2007
DVA Advertising – 1987
Fratzke Commercial Real Estate - 2007
Grace Bio Labs - 2008
Integra Telecom - 1993
LB Engineering - 2008
Lean Power - 2007
Microsemi - 1995
Murray & Holt Motors - 1994
Newton Pump, Inc. - 1987
Ochoco Lumber - 2007
Opportunity Knocks - 2006
Outback Manufacturing – 2008
RCA Management - 2005
Shackelford & Hanson, LLC - 2005
Tennant Development – 1996
The Riverhouse - 1996
Silver
Cascade Natural Gas – 2003
Clear Choice Health Plans - 2005
David Evans & Associates - 1986
SunWest Builders - 2006
The Center - 2007
Gold
Brooks Resources – 1986
Hooker Creek – 2004
Platinum
BendBroadband - 1997
Central Oregon Community College – 1993
Qwest Communications - 1995
Feedback
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