Thursday, November 20, 2008
The economic news wasn't good Wednesday.
The Dow dropped below 8,000 for the first time in more than five years. Consumer prices dropped 1 percent in October - the largest decrease in the 61-year history of the consumer price index. New home construction declined 4.5 percent from September to October, and home starts have fallen 38 percent since the same period in 2007. Nationwide, building permits dropped 12 percent last month, a sure sign of a continued housing slump.
The headlines closer to home haven't been any better. The city of Steamboat Springs and Routt County are projecting revenue decreases for 2009, and there are those who believe those projections are overly optimistic. Home sales have slowed to a near standstill in a market that was enjoying record sales not long ago. Gone are the easy-credit mortgage options that made it feasible for so many middle-class residents to buy expensive Steamboat homes and refinance their existing ones. And, make no mistake about it, local companies are downsizing. All those of us at the newspaper have to do is look at our classified pages - employment advertising has decreased 26 percent since 2007.
In case you haven't noticed, the so-called Routt County bubble has burst.
Steamboat Ski and Resort Corp. confirmed layoffs Tuesday, though officials declined to provide specifics. Ski Corp. President and Chief Operating Officer Chris Diamond released a statement late Wednesday afternoon acknowledging a business climate "unlike anything we have experienced in recent years."
Ski Corp. is not a bad business because it laid off workers. I believe Diamond when he says the layoffs were the result of Ski Corp. recognizing that the tough times ahead required changes for the company to remain healthy and viable. I just wish Ski Corp. and Intrawest weren't so hesitant to discuss the layoffs.
Other businesses in Steamboat also have laid off workers recently. Many are being similarly tight-lipped - or more so. The owner of one local business that cut its staff by 40 percent declined to confirm the layoffs to a Pilot & Today reporter Wednesday. County Commissioner Diane Mitsch Bush requested a correction in today's paper relating to a statement she made Tuesday during a county budget discussion. Mitsch Bush said she acknowledged the county would have to re-examine its current levels of service but that her statement had nothing to do with potential layoffs. I understand her concern, but it's hard to imagine a meaningful reduction in levels of service that wouldn't result in a reduction of staff. The Chamber Resort Association has been reluctant to discuss bookings for ski season lodging, as if not admitting numbers are down will buy some time until the ship rights its course, or it will persuade wary vacationers to go ahead and make that reservation.
I'm a news guy, so my knee-jerk reaction to rosy assessments, "no comments" or "we won't release numbers; that's not something we do as a company" is one of disappointment. But the lack of candor still doesn't make sense when I remove my journalist hat.
The state of our economy - globally, nationally, locally - isn't a secret. It's pretty plain to see. And it's obvious to most there's no quick rebound on the horizon.
So, why are we compelled to avoid an honest accounting of what's happening when it comes to business and money? There comes a time when honesty and candor aren't only important, but necessary.
Let me get the ball rolling by being candid about the challenges facing the Steamboat Pilot & Today.
Our advertising revenue has fallen off in 2008, particularly given budget expectations following a very strong year in 2007. We're actively looking for ways to cut expenditures while minimizing the impact to our daily products. We are analyzing every service we provide for cuts, because our newspapers are going to be smaller. And, yes, we had to lay off an employee last week for financial reasons. We can't promise it will be the last.
It's good to be optimistic. I hope it snows 40 feet again this winter. I hope sales tax numbers do better than the city expects and that more visitors pass through Yampa Valley Regional Airport this winter than last.
But in times like these, it's better to be realistic.
Our newsroom staff was projected to climb to 21 in 2008; we had 18 in 2007. We held off on two of those hires, and we're not going to fill the recently vacated third position. I told my staff Tuesday that we'll make do with 18 in 2009. I also told them that could change as business changes. But I have no more (or less) clue about what's going to happen with our economy than do the politicians in Washington or the wizards on Wall Street.
It's not an easy conversation to have with people you care about, but I think employees appreciate and deserve honesty. I think the same can be said about the community as a whole.
I'm not asking for insider trade secrets or long-range business plans. But when it's raining, there's no use trying to pretend the sun is shining.