Mike Folkerth - King of Simple

Western Colorado’s own Humorist / Economist

Losing Jobs by the Thousands:

Good Morning Middle America, your King of Simple News is rousting out another truth.

I was talking to my old friend Cliff Ulman a couple of days ago. Cliff is a long time auto and RV dealer who got his start in finance. His financial abilities together with being an entrepreneur make him quick on the uptake when it comes to economics. It’s amazing how keen ones senses become, when the money being lost or made is your own.

Cliff and his wife Dee have been planning retirement and chose June of 08 as the month that they would pull the pin on their dealership and shift to a more leisure pace. I had called Cliff to ask how his retirement plans were coming as we have shared our future plans for years.

He told me that he was going to get there, but a little more time than originally thought would be required to sell his remaining inventory. This is mainly due to the fact that the RV business is off by about 50%. Whoa!

We hashed the current situation for a while and the conversation came around to the impact that a 50% reduction would have on the overall RV business. Cliff mentioned the people who deliver the RVs and those who manufacture and provide the material to the manufacturer. If business remains at the 50% level, what will clearly half of those people involved in the business do?

The answer came much quicker than I thought. My brother Steve called me on Sunday and during our conversation he mentioned that my nephew, Doug, had lost his job. Doug works…I mean worked, for Fleetwood in their large diesel motor-coach plant in northern Indiana.

I phoned Doug to get the details. He told me that he had seen the handwriting on the wall when Fleetwood had laid off some 300 workers last winter and not called any of them back. He went on to tell me that on a recent Friday, when the workers arrived at the plant they were told that it was their last day. Nice.

The second and third shift people didn’t get that courtesy, they were phoned and told not to come to work; their jobs were terminated on the spot. This last layoff affected another 300 people, some of them man and wife. Some with 25+ years of service.

No severance, no notice, no nothin’, including no job. In Doug’s words, “It’s a dying industry.” So what do 600 people in the same area do for work, after all, they have their homes and families to consider. Perhaps they could go to work for another manufacturer, but then Doug told me that at least two other RV manufacturers in the area had closed down completely, displacing hundreds more workers.

With this many people unemployed, it may necessary to move to another locale where the job market is better. But, how do you sell your home in an area where most jobs revolved around the manufacture of both RV and full sized mobile homes, both of which are failing? And, where is there a better job market when you don’t speak Chinese?

As we watch the unwinding of our economy, I see no end to the current trend of rising unemployment. The path to this point in our history is littered with broken promises and poor planning by our leaders. But it is also littered with unread history books and a total lack of even basic common sense.

We must begin a radical change to sustainability. The first item on that list should be, “Throw the bums out.”

 
Comments
1.
On July 1st, 2008 at 8:27 am, Gila said:

I realize that Bush, Clinton, Nixon, Carter and others have robbed us blind through the years. But this time will be different with McCain or Obama. Times are worse now and they will step up to the plate. And besides, if I vote for one of them, my guy might have a chance of winning the election. And I won’t have to do any research on my own; best of both worlds, don’t you think? I don’t care if they want to keep our same failed policies in place; I just know they will do better and get us out from under our problems this time!!! They both say they will, too.

2.
On July 1st, 2008 at 9:12 am, Mike Folkerth said:

Gila,

John McCain has been in Congress for 26 years and to my knowledge, has failed to present any ideas for significant change that could be considered earth shattering.

However, if elected president, he has promised…well, more of the same. He is however going to get us on the path of lower fuel prices, higher employment, and energy independence.

Obama is going to make everything all better just by being a nice guy and smiling a lot. He is also a member of Congress with a list of earth shattering accomplishments that could be written on the head of a pin.

None the less, one of these fine men who are totally dedicated to government service for the good of country (and ego) will be elected to the highest office in the land.

Neither have a clue about a remedy for our failing economy. That leaves us as individuals to find a way for ourselves and our friends and families. I promise, it’s down to that.

3.
On July 1st, 2008 at 11:02 am, WmA said:

Hi Mike..
You’ve just forecast our future.. No crystal ball needed..

Just looked at a poll on CNBC, that showed 60% felt that the economy was going to get worse next year. Only 20% thot it would get better…
I think they could have gotten the same results if they had asked about the next ten years, or twenty..
WmA..

4.
On July 1st, 2008 at 1:07 pm, Mike Folkerth said:

Willy,

Yep, I think people are starting to get the big picture…about 20 years too late.

The cities and states were no more prepared than the good citizens, most are operating in the red and have no earthly idea where the revenues will come from to prop up the bloated budgets.

Most cities, towns, and states were living off the delusional mantra of “Growth must pay it’s way.” In a country that lives on growth, growth is the only thing that does pay its way. More on that in another column.

5.
On July 1st, 2008 at 4:08 pm, KathyP said:

Hi Mike,

First, I’m sorry about the misfortunes befalling your friends and relatives.

Secondly, what struck me about your post is a connection with what I’ve been reading about how happy renters are. Renting is great when you need mobility to follow the jobs. I know that personally because my spouse and I rented for at least half of our lives together - sometimes even in different cities.

So many myths exploding in so little time! Who’d have thought that home ownership would become an obstacle to making a living. So much for the “security” owning a home affords one.

6.
On July 1st, 2008 at 6:15 pm, Mike Folkerth said:

Thanks Kathy,
My nephew has another job, but had to take a pay cut. That’s the way of things when the labor supply is long and jobs are short.

I spent considerable time in my book (as you know) defining the difference between a house, a home and an investment, all very different animals.

I also talked about the fact that home prices don’t always go up (as the myth suggests) but sometimes go down. I just read that even the rich are starting to feel the pinch.

It is all unfolding in what appears to be an overnight sensation, but in reality has been coming for years.

7.
On July 2nd, 2008 at 6:50 am, hayesml47 said:

Hey Mike!, I just saw that Starbucks is closing 600 stores and laying off 12000 employees. The sad part about all of this is we are really just at the beginning of the down hill coaster ride and absolutely no one in DC has the slightest clue as to what is happening nor what to do about it. If it really starts to accelerate(which I fear it will) there will be fewer people being able to make it to the polls this November. Of course, this may be what Bush is intending to happen. Who knows? There are some very sick people back there in DC and we desperately need a way to get rid of them. You try to have yourself a good one Mike!.

8.
On July 2nd, 2008 at 7:25 am, Mike Folkerth said:

Good Morning Michael,

Let’s see, someone predicted a couple of years ago that Starbucks would go down…oh yeah, it was the King of Simple dude. What a bone head that guy is!

Don’t know what we were ever thinking Michael, I suppose that we weren’t. And you are correct in that it is the tip of the iceberg. I’ll be writing more on that subject. Keep your powder dry.

9.
On July 2nd, 2008 at 4:15 pm, Greg said:

This is not a recession, we are in an economic free fall and the Fed has run out of Monetary and Fiscal tools to stop it.

Any bets on when it becomes another “Great Depression?” Let’s use a drop in GDP of 20% - peak to trough, as the threshold. I give it about a year, if we are lucky. Any takers on that bet?

10.
On July 2nd, 2008 at 4:46 pm, Mike Folkerth said:

No takers on that one Greg, it’s a near mortal cinch.

I chronicled all the tricks that were used over years to pull another skinny rabbit out of the hat and revive the economy. The magician is out of ideas.

We have to remember that in 2003, this outfit was down to the last match with the Fed rate sitting at 1%.

The false economy was built on residential housing and a printing press, we know how well that plan went.

There is no basis for a recovery any time soon, when you come to the knot at the end of your rope, hang on.

What do you think? Leave a comment.

Please Register First by entering a username and email address. Your password will be emailed to you, then you can login to leave comments. Thanks, Mike

You must be logged in to post a comment.