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Wednesday, February 13, 2013

The State of Hickory 2013

Survival

Here we are for the fifth consecutive year attempting to characterize where Hickory's Economy and Culture are at moving through the year 2013. Once again we look at where we have been and where the trends show us heading. I have spent the past year speaking with people from across the cultural and socio-economic strata of our area and I will relate to you the collective story that comes forward from my perspective.

This past year was another year of stagnation in this community. The economy relatively did not grow in anything other than an anecdotal way.. Sure there have been a few businesses that moved to the area, but for every business venture created there have been an equal number or more that are no longer with us.

It seems that the new types of businesses that have come into existence in our community are the "Thrift" types of businesses. I am not saying that this is good or bad. I am just pointing out that there are many businesses that sell second hand, close out, overstocked or consignment goods in our community. They have always been here, but they are prevalent in the community to a greater degree than ever. Why have we seen a proliferation of such businesses?

In the current economy people are obviously looking to cut out waste, cut costs, and stretch dollars. Not too long ago people would throw possessions away without a second thought. Now people will look to sell items/assets that they no longer need and take the money obtained to buy things that they currently need. People are being forced to take a long look at their finances and decide what are necessities and what are extras.

Such a mindset might be wise in the long run, but it does not bode well for the short term prospects of an economy. As many of you know, I work as a Chef. During the Boom years people threw Grand Parties at my Aunt's Restaurant and functions we catered to. Whether Private or Corporate Affairs, people asked for the finest foods to be served in the finest settings under the finest of circumstances. It wasn't unusual for people to spend thousands of dollars on a party. Those types of extravaganzas have died out for the most part in this community. They were actually one of the first victims of this downturn.

As this community has aged what we have seen in Restaurant and Hospitality is more older people sharing or ordering half portions. Customers demand even greater service, but ticket/cover averages are way down. In the restaurant business, we are seeing people working harder to try to maintain income at the same time that costs have sky rocketed. I am sure that this is the same in most businesses and this is not an optimistic climate. It is about hanging on. It is about Survival. What is most stressful is to have the feeling that the worst is yet to come.

The Calm before the Storm

Have you ever been in a Hurricane? I have been in a couple.

I'm not talking about sitting hundreds of miles inland. I am talking about being a mile or so from the shoreline. You see the thing forming out in the Atlantic and it starts creeping your way. You can't get all distraught about it, but you have to pay attention. You have to remain vigilant. It can turn away, but there comes a point where you know that you are going to have to deal with it. You'll have to batten down and make sure you have provisions. You'll have people fretting like it is the end of the world and others acting like it's just going to be a shower. There is always a surreal anticipation that accompanies every storm.

Much like those Hurricanes, there seems to be an eerie calm in this community. It's like living in a different dimension. The world seems to go about it's business as if things are OK while you can see and sense that they aren't. Eventually, Interest Rates will have to Rise and when they do the Federal Government will not be able to service the interest on the $16 trillion (and growing by leaps and bounds) debt and will be forced to accelerate the money printing or go ahead and default, which will mean the end of the current dollar. Whichever happens, you will understand that the complacency that has gone on for years cannot be sustained on this mirage. A million times Zero Equals?

In this community, we have acted as though if we just don't make any substantial expenditures, then everything will work out when the economy turns around. What people have taken for granted is that this is a normal business cycle and eventually it will turn around. I am going to tell you. and I have told you for years, this is not normal... this is the new normal. You can cut your costs to zero, and we are to the point of cutting into the bone, but it doesn't mean you are going to make a penny to save a penny. In order to grow an economy you have to invest in it. Where do you invest? You invest in real people. You invest in the middle class.

The community isn't making anything off of the investments it has sitting in T-Bills and other Money Market instruments. As a matter of fact much of this money is being used against us. It is being utilized by the hyenas on Wall Street to off shore our jobs and build up China's economy and this is only exacerbated by the Federal Government's debt to China. Go on the internet and look at the Financial Capitals in China (Shanghai and Hong Kong) or the Middle East (Dubai). Go look at the videos. You see 100 times the development there that you do in any of the American cities. Check out the modern structures they are building off of the debt of our economy.

My cousin lives in South Charlotte. I hear about Charlotte's problems. In the couple times I have had a chance to get to Charlotte over the last year, it is easy to see that it is continuing to grow. New projects are happening currently even if not at the pace they were in the '90s and '00s. The key is that they have continued to take ownership of their economy and they are not complacent. It is called Grow or Die... Move Forward or Die.


And/Both

I can see the realities as well as anyone. There is currently no velocity to our local economy. This malaise has fed off of itself. Our local economy is devouring itself. The reality is that income is stagnant, but there is inflation in the pipeline. As a community we need to help people understand the necessity to hedge against the realities of inflation, while preparing and attuning themselves towards opportunities.

To hedge against the current economic realities, which will in the aggregate only get worse, we need to lighten the load and become as mobile as possible. If you can voluntarily sell an asset today, then you might get something out of it. If you don't have the income to pay your bills and you find yourself in a bind; you might just be forced to liquidate that asset in the future and you will get a lot less, to nothing, for it. Also, in an inflationary environment that asset is going to lose value compared to the currency, especially if it isn't a necessity. Having no major debt will increase your quality of life. You can take a load off your shoulders by reducing expenses. If you are having a tough time meeting your mortgage payments and it is causing you anxiety, then you should try to sell your house. If you can't sell it, then there is nothing wrong with walking away from it. There is no reason to be forced into playing a losing hand.

By the same token, I believe that one of the major reasons you should stay out of debt to become more mobile is that you might want to leave this community. If the people at the top of the food chain in Hickory aren't willing to reinvest in their ecosystem, then it is time to get out of their way and let them have it. That is what the young people (the millennials) are doing. As I have pointed to on this blog, the younger generations have chosen to go where the money is. They don't seem to care about having possessions that weigh them down or to live in houses and have mortgages that weigh them down. If they don't like it here, they are more than willing to go there. Maybe there is a lot to learn from that paradigm. You don't have to accept the Race to the Bottom. You don't have to accept failure.

Failure

I understood at a young age that no one was going to help me.... as a matter of fact people were going to stand in my way and be impediments towards my success... That if I fail it isn't on them, It is on me, because part of my task is to move these impediments out of the way.

You have people in  this life that actually make an effort and then you have impediments. These people who impede progress don't understand the obstacles that they create. They believe that they are operating with the best of intentions. They believe that they are seeking the greater good... what will be the best result for the most people. But, the reality is that they are living in denial. God determines what is best for the greater good... not any man.

Non-performance is the very definition of failure. We have had a non-performing local economy for more than a decade. I think most people will admit the realities of the local economy. The only time you hear about sunshine and lollipops is when some of the local elected officials, bureaucrats, and marketing gurus want to put a happy face on everything. Call it issues, problems, or challenges, but the reality is the same thing and semantics isn't going to change the cold hard reality.

The frustrations of many in this community come from the fact that they bring forward ideas and constantly and summarily the ideas are shot down by the local entrenched establishment. This year we came forward with the Referendum on Ward specific voting and we lost, because the establishment rallied their mind-numbed minion through what amounted to be scare tactics and ignorant innuendo. It is what it is. You learn and move forward.

...And the South side of the City of Hickory continues to fall apart. Last year I talked about actions speaking louder than words. This year we see that Actions have spoken louder than words. It is more than obvious after five years that none of the local establishment is going to do anything to uplift the areas of Hickory that have fallen on hard times. They are stuck on a notion that this will happen naturally... Some Day.

We are not going to see policies directed towards these areas of need. No capital is coming from altruistic principles. I ask where is the fundamental pride in this community? Pride through action and not words. The fundamental pride that it took to build this community and took to maintain this community for over 100 years!!!

Accepting Failure

I have heard it said by people of the greatest means in our community. Most of them tell their children that they shouldn't look to come back here after they graduate from college and the only kids that do come back here are the ones that have a path laid out for them through a family business. If you can't encourage your children to invest in Hickory and you aren't willing to invest in Hickory, then why do you think anyone else would want to invest in Hickory?

I have heard the saying "Winners never quit and quitters never win." The truth of the matter is that Winners know when to quit. We are getting down to the quick. We have lost and lost and lost and been beat down and been treated like outsiders, when this community is as much or more our birthright as those who have usurped control. Nobody has asked for anything other than a chance... an opportunity... and we are treated like second class citizens in the city where many of us were born and even more of us were raised. You want us gone, then why don't you help us leave and you can have the place to yourselves to continue doing the same ole, same ole, since many don't want to work together to make this community better.

I can't accept failure. It eats at me to live through this stagnation. To work hard just to survive with no mind that anything is going to get better. That is the reason I think and share my thoughts with the public. First of all it is therapeutic to tell this story and second of all it needs to be said by somebody. I am doing nothing wrong by telling the public how I feel and what I am observing. This isn't personal unless you want to make it personal.

The Same Ole Same Ole

You can go back and look at the previous State of Hickory messages that I have released over the last 4+ years. I have heard that some of the issues discussed on this blog are preposterous, but if you go back and read the articles, then you see that we have been a lot closer to right than wrong.

In the end, I'll leave you a thought to the wise. I wouldn't be as worried about this forum and it's message, or my message, as much as when I might choose to walk away, because at that point you will know that I have decided that this is a lost cause and it isn't worth my time. I've seen a lot of people do that over the last few years. It's becoming a trend.


The State of Hickory, North Carolina 2009 - I told you in this 2009 message, "We are losing many of our best and brightest young people in this area, because of the lack of opportunity."... "We cannot afford to turn this area into a retirement village."... "The Strategy has to be jobs." 

Ted Abernathy of the Southern Growth Policies Board has been brought into Catawba County to study the issues we face and construct policies that can get our community moving forward again. One of his leading recommendations is that we are going to have to reset our Manufacturing base towards Modern realities. The Western Piedmont Council of Governments statistics confirmed both the loss of our younger generations and the exacerbated aging of the local populous.

When I wrote about these issues 4 years ago it was taboo. We had not gone into the depths of jobs losses that neared 15% U-3 unemployment by the Summer of 2009. Locals thought they had seen the worst of it when I released this State of Hickory message. We still have not recovered to the levels we were at when this message was released.



The State of Hickory - January 2010 - I told you in this 2010 message, "The idea of an Economic and Science Fair is sound. Local businesses and government can sponsor the event. We just need to get the ball going and get the word out so that folks can get started."

We have seen the formation of the Edison Project, in which Entrepreneurs submit business proposals and have mentors help them formulate plans and then come forward in a contest that awards money to the three best plans as voted on by an audience that attends the event. I take no credit in this endeavor. It is a success and that is what makes me happy. Opportunities granted... Results achieved.

"I really would like to see a point-counterpoint discussion of issues done in the Hickory Daily Record and on Hal Row's First Talk show. We need a lively and vigorous discussion of the issues and these are truly the only media forums devoted to this area. Give everyone the topics and/or questions ahead of time and let them really think about it and then let's truly go into some depth on pertinent issues. Frankly, I am sick of hearing the same ole talking points bandied about over and over and over again by the same ole usual suspects. You want to sell some papers? You want to sell some ad time? Free and Effective Content. Let's Go."

We got this with the referendum. We had several discussions and back and forth and an actual in studio debate. I can live with how the referendum vote turned out when we saw an actual real Democratic process play out for once in this community.


The State Of Hickory 2011 - I told you in this 2011 message, Trying to evolve towards modern realities - ... What I related was that we had not modernized our manufacturing structure. We had rested on our laurels and expected the future to come to us. And what we found out is that evolution did come to us, and it was a harsh reality, because we were not prepared for it. I honestly believe that we have taken more than the initial steps over the last couple of years to address many of these issues, but we cannot stop here; because if we stop, then we are going to end up right back where we were or worse.

Once again we look at what Ted Abernathy has brought to the table and it confirms the Hound's findings. I don't come up with this stuff off the top of my head. This is called research and listening.


"Economic Realities - Currently manufacturing only makes up 28% of the workforce of Catawba County. Back in 1990 manufacturing made up 56% of our workforce. The median household income for Catawba County was $40,536 as of the 2000 census. The American Community Survey shows that median household income, as of 2009, is $41,116. This means that over a nine-year period the county only saw a growth in income for households of 1.43%. Over that same time, the Consumer Price Index in the United States grew by 23%. This means that to keep up with the cost of living, the year 2000 household income of $40,536 should be $49,950.38. What happened to that $8,834? Could you not use that money today?"

"Hickory's loss of Relevance - The people who long for what Hickory was, can't understand that we can't get back to what Hickory was demographically or structurally. Their longing for what we were is destroying our future. It is destroying our capacity to change. They are longing for that furniture and textile world. We can do more manufacturing, but it is going to have to be high tech manufacturing or unique craftsmanship. We won’t be building crate furniture or producing everyday textiles."

The State Of Hickory 2012 - "Skin in the game - Conover put skin in the game with the Conover Station Project. While the City of Hickory has touted the Brownfield grants as a way to revitalize unused, blighted properties, Conover has already taken action with the revitalization of the Warlong building by retrofitting this old building towards modern realities and concerns. This building looks to be a new, modern center of economic activity in Conover. In my opinion this will end up being Conover's new Downtown with several new sites of Economic Commerce, like the Manufacturing Solutions Center, surrounding this building. Where the City of Hickory and its power brokers have demanded that Union Square must be Hickory's Downtown, Conover has decided to take a more realistic and open minded approach towards the realities of the future."

Conover and City Manager Donald Duncan have received State and national attention with what they have done with the Conover Station and this year they have moved forward with the addition of the Manufacturing Solutions Center at this site. They have taken calculated risks that look to pay off handsomely in the near term and the future. Conover is a local community moving forward and finding ways to make things happen.


"Action speaks louder than words - Look at the way Hickory is laid out. Look at its old manufacturing structures. Hickory has not been strategically designed. It is a mess the way that Hickory has been laid out and there are people who want to keep moving forward in such a fashion. That is unreasonable. As we heard at the entrepreneurial summit a few weeks ago, there has never been a normal. We have to create the future. If we do not create the future, it will be created for us by external forces. We have so much to gain by joining together in a process of structured goals and development. Sure, these plans should be able to be reassessed, but to not have plans is to set yourself up to have others determine your future!"

Scott Millar said it in the Hickory Daily Record this past weekend. We lack inventory when it comes to structures for modern manufacturing. We need buildings with ceilings that are 30+ feet high that can easily be adapted and expanded. The Old Manufactuting buildings around here have 10 to 12 foot ceilings and they are locked in and can't be easily retrofitted and/or expanded. A few of those old buildings might be salvageable for nostalgic purposes, but while they are sitting around unoccupied and while we are going through a period of no growth, then we need to encourage that some of these buildings be taken down. Some of that property would be worth more without the building and would be a lot easier to develop. We need to get to moving down that path. The sooner the better.

5 comments:

talferris said...

Very comprehensive. I enjoyed reading it. I only saw one thing that I take a different tack on, with regard to failure. We have to look after the whole, I believe. Not each individual of the group, but the group in its entire sense. Otherwise, we have a Nation of men and not laws where one becomes intrinsically more valuable than another. I have merely to gesture toward the carpenter for whom the entire New Testament was built to support the ministry of and say, “Do unto others as you would have others do unto you.” Sure we have to look after self too, but at the price or expense of entire populations? No, I would contend that is part of the problem in Hickory and why it’s in the shape it’s in, among other things. Far too often and for too many years, decisions were made on the basis of ‘me’ rather than ‘we’. The good of the one outweighed the good of the many and the good people ignored the signs and decided to hook their sled to that shooting star. It went well for almost a century, until the rope burned in two, and the riders were left blinded by the tail as the star faded and disappeared on its way to light the way for exploitation of others in the same demographic in a different country.

Millar is a hoot. Who, in the Great State of Hickory, is going to tie up that much capital for an undetermined amount of time and build a building 30 feet high, in a wistfully hopeful attempt to attract some industry to occupy it? The people that own the current crop of dilapidated structures are not going to throw good money after bad in an attempt to upgrade or remove them either. The local governments, well as long as that structure is up, it’s worth something, and that means tax value. They aren’t going to support tearing them down because that’s going to cut into their property tax base. Sure, the old Howard Johnson is an exception, (and I’m sad to see that icon leave; the clam strips were memorable) but that’s only because nothing of any repute is going to move into that building.

Yes I realize, “skin in the game.” But the bankers and banks that had local origins and interests (and some speculative capital to invest) aren’t around anymore. Bank of Granite and Southern National are no longer enmeshed locally or exist. The larger banks are faceless monoliths with zero skin in local success or failure. And the local land barons of today don’t have the will to do it. Let’s face it, if there was any inclination to do what was best for the region among that little group, Hickory would still be the furniture and sock Mecca and to that end, I’ll refer back to what I said in paragraph one.

Harry Hipps said...

One thing that concerns me is the deteriorating state of retail here. For a long time we have drawn customers from a wide area to shop and dine here. During this economic downturn retailers and even food purveyors have carried lower inventory and a cheaper line of goods to survive (compare Belks or dillards stores here vs more prosperous areas). But now the mid to low price shops have put in some stores in adjacent towns and online retailing is biting hard.

This is a big job, income and tax generator for Hickory and we need to consider what the long term implications are. What can we do to attract specialty retail, local food and craft niches, maybe more distribution centers like the Target distribution center or even some processing centers that package and ship goods.

Retail doesn't change suddenly or dramatically like tech or some other industries do. But the long term trend as it affects this area isn't good. We will even see job losses mount as cashiers will be replaced by touch screen technology. McDonalds, Papa Johns and others are already testing it. you enter your order on a screen, put in your card and someone brings your order to you. No wages, benefits or management hassles for the business and people order more food because they don't feel like a glutton when ordering larger quantities of food from a machine.

What can we do to get ahead of the curve on this? Adapt or perish.

talferris said...

Something of a quandry, isn't it Harry? How do you support retail through discretionary income spending when you don't have it? People can barely afford to buy what they need, let alone what they want. Gas keeps seeking new territory in the "how much is it this hour" category. Thanks oil speculators.

And I keep wondering how it is people are supposed to survive. If it's true that we are still shifting over from a manufacturing to a service economy, I keep wondering, in light of a preponderance of the evidence, what is left to serve and who can afford it if there is anything. Circular to be certain, but doesn't this sound a bit like feudalism? The few serving the many, for little money, little protection, and little hope. And yet, we're a civilized society. I'm wondering where and how exactly that comes into play and when; that way, I can watch for it and not miss it in an eye blink.

Harry Hipps said...

You're right, discretionary income is drying up. In fact, there are many that can't afford necessities. I think it is a convergence of things. The government is sucking up too much money, health care inflation has been running higher than general inflation for years and if you get a couple of big medical bills it takes a while for the wallet to recover. For the last couple of years my "raise" was the increase in my health coverage which, fortunately is paid for by my employer.

I think the regulatory environment now is crazy and there are so many distortions in the economy by the governmental policies and central banks that I'm not sure what role the price mechanism means anymore.

Kinda makes you yearn for the good old days when our biggest worry was the Russians blowing us up.

talferris said...

I know what I’m about to say comes from the partisan in me and I apologize for that, but it begs being pointed out. Yesterday, our brand new peachy keen Governor signed into law a bill that cuts unemployment. Our State, with the 5th highest unemployment rate in the nation, our area with one of the worst unemployment rates in the State, blighted by the mass exodus of industry and jobs, and you don’t need all that money for free for the following reasons.

1. We need to get our fiscal house in order.
2. We need to protect our small businesses.
3. We need to ensure our citizens’ unemployment safety net is secure and financially sound for future generations.
4. We need create an environment where our job creators can start hiring again.
5. We can pay back the money we owe quicker.

Now I look at those things and I see a gross negligence regard for those out of work and have been so. A purposed deliberate indifference to the well being of people and feigned concern about a debt that in the grand scheme of things doesn’t amount to much.

Sure, I’ve heard that the ‘backers’ of this bill would rather see the people get pay checks rather than benefit checks. I’m relatively certain most out of work and have been would too.

Other than cutting the amount of unemployment insurance contribution payments on businesses, I fail to see how “job creators” and “protecting small businesses” factors in to this. What the Guv wants us to believe is that those rates are so high, they are going to save so much money that they are going to rush right out and hire people instead of paying those premiums. Show of hands, who believes that?

McCrory is intent on destroying the last vestige of hope that some have in this economic quagmire and no one is going to stop him in his goals and pursuits. God help us all the next four years.