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closeGeorgia's unemployment rate hit its highest mark in 16 years last month, rising to 6.5 percent, topping the last two months that also set recent highs.
The state's jobless rate in September was a full 2 percentage points higher than the unemployment rate for the same month last year, according to the Georgia Department of Labor. The state remained above the national unemployment average and most major industries saw a loss of jobs, the department reported.
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How has the credit crunch affected your business?
THE MEDICAL CENTER OF CENTRAL GEORGIA
4,700 employees The Medical Center recently announced an effort to trim $33 million from its budget in a process that's likely to include layoffs. Hospital Vice President Andy Galloway answered The Telegraph's questions. His response was edited for clarity and length.
How has the credit crunch affected your business? It affects our variable rate interest costs, lines of credit and short-term borrowing rate. It's driven those up rather dramatically. And at the same time, it has made going to the credit market to issue additional debt or to restructure existing debt virtually impossible. Also the anxiety in the financial markets with regards to investments is fairly pervasive. So we've got retirement instruments, and many of those are being downgraded.
Does your company ever borrow money to make payroll or cover other business expenses?
No. All our borrowing is related to long-term strategic needs.
Are you in danger of not being able to make a payroll?
No. We're not enjoying the kinds of margins we have in past years, but we're operating in the black and expect to do so. We need a 4 percent operating margin to be able to replace property plant equipment. And then something slightly beyond that for any growth we expect to experience.
Do you see layoffs or other work force reductions in the near future?
We have initiated the strategic performance improvement process designed to reduce our expenses. Now that process started in July, but it's still a reflection of the general downturn in the economy. This process may result in changes in the way we do business, including some reductions in our work force.
What do you see in the next year for your company and for the local economy in general?
We expect that the downturn in the economy is going to result in higher levels of unemployment, which means we may experience more uninsured (patients) needing and requiring services. And our ability to respond to that is going to be affected. So in the coming year, we expect to continue to focus on managing our expenses, recognizing that we're going to have less flexibility in our financial needs in regard to issuing debt and restructuring debt.GEICO
3,800 employees
The insurance company has a major call center in Macon. Christine Tasher, director of public relations, e-mailed the following statement, which has been edited for style.
"Geico remains one of the fastest-growing auto insurers in the U.S., and this year became the third-largest private passenger auto insurer in the country based on the latest 12 months written premium. In addition, Geico holds the highest possible financial ratings in the industry, including A++ rating from A.M. Best for superior financial strength and AAA rating from Standard & Poor’s for its top credit rating.
"We are fully prepared to meet 100 percent of our financial obligations to our policyholders and our associates today and into the future.
"The Macon office is now hiring associates for work in sales, service, claims and staff support areas. Readers may go to the Geico careers site on www.geico.com for job descriptions.
"Geico has been in business since 1936 to serve the needs of American drivers. We have invested heavily in maintaining our trust with the public by delivering superior products and service since then. Our financial investments have been positive and reflect our willingness to support organizations with a strong history of long-term performance excellence.
"Geico is a member of the Berkshire Hathaway family of companies headed by Warren Buffett. Mr. Buffett has recently made major investments in key U.S. enterprises to benefit shareholders and to signal his confidence in the national economy."
MERCER UNIVERSITY
1,338 employees
The university declined to answer The Telegraph's questions.COLISEUM HEALTH SYSTEM
1,300 employees
Coliseum operates three hospitals in Macon. Marketing director Jan Beeland answered The Telegraph's questions via e-mail.
How has the credit crunch affected your business?
Coliseum Health System is seeing more uninsured. Whether this is the result of loss of coverage due to an employer cutback on benefits and or jobs is unclear. We have not experienced any issues with getting credit for leases, etc.
Does your company ever borrow money to make payroll or cover other business expenses?
No.
Are you in danger of not being able to make a payroll?
No
Do you see layoffs or other work force reductions in the near future?
No. As a matter of fact, we are hiring various professional positions now. Please refer interested parties to view our Web site, www.coliseumhealthsystem.com, and click on the career opportunities.
What do you see in the next year for your company and for the local economy in general?
There will always be a need for health care, so we anticipate little change in the demand. What may change is the ability for the consumer to pay (with lack of benefits, jobs, etc.) and maybe the payer source in the future. Only time will tell.WAL-MART
1,045 employees
A Wal-Mart spokesman called The Telegraph and said: "It's a very large company. So, how it would affect business in Macon is kind of a hard one to answer. The fact is we feel we're well positioned for the economy.
"The ‘save money, live better’ message resonates with customers just about everywhere. ... We are comfortable with our financing, so I think that's really not an issue."YKK (USA) Inc.
808 employees
YKK operates a zipper manufacturing plant in Bibb County. Judy Crawford, the company's director of corporate communications, answered The Telegraph's questions via e-mail.
How has the credit crunch affected your business?
It is too early to determine. Our year-to-date sales have met our expectations.
Does your company ever borrow money to make payroll or cover other business expenses?
No.
Are you in danger of not being able to make a payroll?
No.
Do you see layoffs or other work force reductions in the near future?
Not at this time; however, if our customer orders decrease significantly or if business conditions get worse, then we will need to reassess this situation.
What do you see in the next year for your company and for the local economy in general?
Again, it is too early to determine the impact on YKK (U.S.A.) Inc.'s business.GEORGIA FARM BUREAU FEDERATION
601 employees
How has the credit crunch affected your business?
Like all Middle Georgia companies, the level of consumer confidence, the health of the overall economy and the ready availability of consumer credit affects our business. If fewer houses are being built, there are fewer new homeowners to purchase insurance. If the housing market is depressed, people may put off buying that larger home with the bigger policy. If auto financing tightens, we may see fewer upgraded auto policies.
Does your company ever borrow money to make payroll or cover other business expenses?
No.
Are you in danger of not being able to make a payroll?
No.
Do you see layoffs or other work force reductions in the near future?
No.
What do you see in the next year for your company and for the local economy in general?
As we have learned in the past few weeks, global economies are intertwined. It is equally difficult to separate the national economic mood from the state and local. The health of our local economy will be greatly affected by the level of success achieved by the government's rescue plan and whether it stabilizes the markets. Consumers want to feel confident again, but they will have to see their 401(k)s stabilize and a return to normal credit availability.
Consumer spending drives our economy, and when the government says it is down significantly, it is a cause for concern on Wall Street and on Cherry Street.THE BOEING CO.
587 employees
A spokesman for the aircraft manufacturing company did not provide answers despite several requests.IKON OFFICE SOLUTIONS INC.
558 employees
A Pennsylvania-based spokeswoman for the company, to whom local officials referred questions, did not return several telephone messages from The Telegraph.
FIRST QUALITY
550 employees
After several days of calling the local offices of the health-care products company, The Telegraph was referred to a spokesman in New York who was out of the office and did not return a telephone message in time for this article.GRAPHIC PACKAGING INTERNATIONAL CORP.
500 employees
A spokeswoman for the company declined to answer the questions but said the company is "satisfied with our liquidity position right now."
"We are publicly traded, and we're just very conservative in terms of what we comment," spokeswoman Lois Becton said.ARMSTRONG WORLD INDUSTRIES
464 employees
A spokeswoman for the ceiling tile manufacturing company, Jennifer Johnson, provided The Telegraph with the following statement:
"We certainly can make no economic predictions given the instability and uncertainty of global credit markets. Armstrong has a strong balance sheet and a significant amount of cash, in addition to the best brands and the strongest product portfolio. We continue to focus on providing our customers with the best products, service and quality while managing costs through a focus on productivity improvements."KUMHO TIRE CO.
450 employees
The tire manufacturing company's California-based vice president of marketing agreed to review the questions but did not provide responses despite Telegraph requests.IKON FINANCIAL SERVICES
350 employees
A spokeswoman for General Electric, who said she spoke for IKON Financial Services due to her company's strategic partnership with IKON, declined to answer any questions.TIMCO
350 employees
The questions were e-mailed to the local vice president and general manager of the aircraft maintenance company but, despite several requests, they were not answered.SOURCE: All local employment figures provided by the Macon Economic Development Commission
The economy has been weakened by not only job losses but a full-scale mortgage crisis, slowing retail sales and a falling stock market.
Fearing a total economic collapse, Congress and the president earlier this month approved hundreds of billions in taxpayer dollars to fund various plans to rescue the economy.
Those are working their way into the system, but economic experts say it may be months before those cash infusions loosen the stalled credit market that experts say is behind the economic malaise. Home and car loans are more difficult to secure, as are business loans. And banks less willing to lend to each other and concern among investors have led to stock market dives.
Clearly the economic conditions are having some affect on the job market, but the questions remain: Where is the bottom, and how many people will be out of work when we get there?
Middle Georgia banks are still making loans, but they're being more cautious with their money these days, area bankers said. Fewer businesses are expanding because of this lack of liquidity, according to the Middle Georgia Regional Development Center, which helps small businesses get loans. Retail spending has been affected, too.
Locally, Macon reported a 14 percent drop in sales tax revenue in September compared to September 2007. That could be an indicator that people are shopping here less, though the sales tax collections have fluctuated heavily in the past.
Nationally, auto sales were down 3.8 percent last month, and all retail sales were down 1.2 percent, according to The Associated Press.
"I really am surprised it's only down 3.8 percent, " said George Youmans Jr., of Macon's Youmans Chevrolet. "Our employment is down from a year ago. And I would anticipate, if business stays like it is, that our employment will contract further from where it is right now."
But there also are signs pointing the other way.
Statewide sales tax collections ticked up in September, signaling an increase in consumer spending in Georgia. State Rep. Allen Peake, whose company owns three Captain D's and a Cheddars restaurant in Bibb County, said he saw a downturn in sales until about three weeks ago. But he attributes that to the gas shortage and said the restaurants already are starting to "see a little rebound."
To get an idea of the strength of the local jobs market, The Telegraph contacted the Macon area's 15 largest non-governmental employers. All were asked the same series of questions related to the economy, though some companies chose to respond with a blanket statement instead of answering the individual questions.
Some said business was good. For example, Geico said it continues to grow and is looking for new employees. Coliseum Health System said it always needs new nurses.
Others tempered expectations, saying they couldn't make many predictions about the coming year and leaving the door open for a fall-off in operations. Several did not respond or refused to answer questions.
To contact writer Travis Fain, call 744-4213.
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