>La Grande Observer | Union and Wallowa Counties' News Leader

UNCERTAIN FUTURE: Flanked by Ron Nash of Northwood Manufacturing (left) and Carl Bond of Grande Ronde Hospital, Boise Cascade’s Tom Insko talks about poor economic market conditions in the wood products industry. The Observer/BILL RAUTENSTRAUCH

The summit, hosted by Union County, was called to give the public an idea of the current state of the local economy and to outline steps being taken to make sure Union County gets a fair share of federal economic stimulus money.

Leaders from the private and public sectors took turns speaking to a crowd of about 50. Most bore the message that the recession sweeping the nation has caught up to Union County with a vengeance.

Shelton-Tiderman said that in Union County, the manufacturing sector took a hard hit the past year. Between November 2007 and November 2008, local manufacturers have cut about 320 jobs.

By the end of November 2008, the county’s unemployment rate stood at 9.8 percent. Shelton-Tiderman said things likely will get worse before they get better.

“We expect to see the losses continue. Don’t expect recovery until 2010,” she said.

She said Union County employment trends will continue to follow state and federal trends in a downward direction.

“We’re all in this together,” she said.

Following Shelton-Tiderman’s forecast, summit talk swung to the federal economic stimulus package expected to pass Congress after Barack Obama is sworn in as president. Obama hopes to create millions of jobs through public infrastructure projects.

Kathleen Cathey, an aide for U.S. Sen. Ron Wyden, D-Ore., was a summit speaker, recounting a meeting Wyden had last month with local leaders.

She said the senator thinks “shovel-ready” road and highway projects — those that can be ready to go in 60-90 days — stand the best chance of qualifying for stimulus package money.

“I think Senator Wyden believes transportation will be the core of what we see in investment,” she said.

Appearing alongside Cathey was Ray Naff, director of the state Intergovernmental Relations and Economic Revitalization Team, and Scott Fairley, Gov. Ted Kulongoski’s Economic Revitalization Team regional coordinator.

Naff said the governor’s office is in close contact with entities across the state, compiling a list of projects that can be launched in a short time frame.

“We understand the idea is to get jobs on the ground quickly,” he said. He added that the list of Union County projects now being compiled by local officials will be included in the state’s database.

Naff also said Kulongoski and state legislators are working on measures that may create more jobs. The bills are mostly in the draft stage at this point, he said.

“Much is still being written, nothing is passed and they’re all going to cost money,” he said.

In response to a question, Naff said the governor’s office will take care to see that money is distributed evenly across the state.

“The governor has made clear that whatever money comes will be distributed proportionately," he said.

Fairley, who is based in Pendleton, said not much is presently known about how stimulus money will trickle down to the local level.

“A lot will go through state and federal avenues, and it won’t all be grant money. Some of it will be loans,” he said. “Once the package takes shape, we’ll be there to make sure things move expeditiously,” he said.

Union County’s list of proposed public infrastructure projects was compiled over the past several weeks by

La Grande City Manager Robert Strope, Union County Commissioner Nellie Hibbert and members of the Union County Economic Development Corp. The intent is to forward the list on to Congress and the state Legislature.

Strope and UCEDC President Howard Perry gave a summary of the list, saying it contains 101 projects, 94 of which are ready to go to bid. Strope said it is not too late to add projects.

“I’d like to have a final draft by next week. If you can get them to me by the end of this week, it would be great,” he said.

SLUMPING SALES: Greg Barreto of Barreto Manufacturing tells summit attendees that lagging foreign sales are hurting his company. The Observer/BILL RAUTENSTRAUCH

All but Bond said their companies are in trouble. Insko led off.

“You’ve got to know our industry is in a crisis right now, the worst downturn we’ve ever seen,” he said. “The market is off 70 percent and we don’t see it coming back for up to five years."

Boise, whose plants in La Grande, Island City and Elgin employed about 700 workers before the recession, has cut back production and laid people off over the past several months. Insko said more curtailments loom in the future.

On a cheerier note, he said he thinks Boise will be able to hang on.

“We’re strong. We can weather a downturn,’’ he said. “We’re not in a situation where the banks are knocking at the door and saying, ‘We’re going to run your operation.’ We’re not in bankruptcy.”

Though market conditions are the chief cause of Boise’s current problems, Insko said national forest management policies are also playing a role.

“Fifty percent of the budget is used up fighting forest fires. The Forest Service should be fully funded. That would be a benefit to us,” he said.

Barreto, whose company makes rototillers, trenchers and trailers for an international market, said only a skeleton crew is working now, with emphasis on research and development. Many employees are working one day a week. The CEO said his company has continued health benefits for the workers.

Barreto said he expects 2009 to be slow, especially since foreign markets are down.

“We’re looking at doing 30 percent of the business we did last year. It’s getting bad overseas, it’s getting bad everywhere,’’ he said.

He added, though, that Barreto Manufacturing, like Boise, has a chance of survival because it doesn’t have a huge debt problem.

“We’ve allowed our profits to determine our growth. We don’t have a lot of problem with long-term debt,” he said.

Nash, who started his recreational vehicle company in La Grande in 1993, employed more than 400 people before the downturn. He said that at present, about 100 are working.

“You go from 400 employees to 100, and it’s tough on families,’’ he said.

Nash said the main problem in the RV industry now is a lack of financing for buyers. He wondered why that problem isn’t getting better with the first federal stimulus monies.

“In the last seven months the financing has gone away and a lot of the package money hasn’t found its way to the manufacturer,” he said.

Nash said he went to a trade show recently in Tacoma where there were a lot of lookers though not so many buyers. That demonstrates people are still interested in owning RVs, he said.

As for his company’s future, it remains uncertain.

“We’ve got part of our crew working and we’d like to get them all back, but I’m not sure that’s going to happen,’’ Nash said.

On the upside, Nash said construction of a new axle and chassis plant is nearing completion at the Northwood facility. He said in the long run the plant, owned by a German concern, could employ 70-80 people.

Bond said Grande Ronde Hospital, which employs more than 400 people and pays more than $30 million in wages and salaries, isn’t planning any layoffs. With the completion of a new clinic and recent recruitment of six new physicians, utilization of services is up.

Bond did say, however, that the facility is feeling a recessionary pinch because fewer people have health insurance.

“We’ve seen a sharp increase in charity care, exceeding $1.2 million. Utilization is there but the cash flow is declining,” he said.

The summit closed with remarks from Eastern Oregon University President Dixie Lund.

Lund said summit organizers invited her to speak because of her experience guiding the university through choppy economic waters in 2007.

“I knew I had to be visible, articulate and assertive, as do all of us on behalf of our Union County homeland,” she said.

She said Eastern was able to turn its enrollment crisis around because the people involved were committed to the cause and worked as a team.

“I would encourage all of us who care about the economic situation in Union County to work together to accomplish our goals,” she said.