Route to Recovery

A trip through the epicenters of the recession

What does future hold for Walmart’s backyard?

Nov 10, 2009 16:00 UTC

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ROGERS, Arkansas – The area around the Walmart corporate headquarters has been on quite the ride for the past two decades, but many are wondering where the growth will come in the next 20 years.

“Before Walmart’s expansion this was hillbilly country. But there is only so much expansion that one company can bring to the area, even one as large as Walmart,” said Kathy Deck, director of the Center for Business and Economic Research at the Sam M. Walton College of Business at the University of Arkansas.

Central to the Walmart boom have been the jobs not just from the company itself, but from 1,200 Walmart suppliers — including Procter & Gamble to Pepsi and Nestle, and many more — that have opened an office here to be closer to the retail giant.

All told those suppliers employ more than 5,400 people in the area. Trucking firm JB Hunt also has its headquarters in the area, as does Tyson Foods. From 2000 to 2008, the population of Benton County grew by nearly 37 percent, to nearly 210,000, according to the Census Bureau.

Recruiting firm Cameron Smith & Associates has persuaded more than 300 suppliers to set up shop in the area.

“Suppliers that have moved here have found that it really moves the needle for them,” said company president Cameron Smith. “Once buyers at Walmart see you face to face around here, they know that you’re there for them when they need you.”

Every year Smith runs free seminars at the University of Arkansas in nearby Fayetteville on how to break into the Walmart supplier world, like offering to do an upaid internship.

“Many of the suppliers here can’t afford to spend a lot of money on interns, but if you work for them for free in return for training that can make a lot of difference,” he said. “If I receive an application from someone who did an $18 an hour internship and one from someone who worked for free, I’d most likely go for the latter one.”

The central question for Bentonville is how Walmart will manage its future operations. Last week the company said it was eliminating 60 positions from its international division, moving some jobs from headquarters to far-flung offices around the world. Some say this is a wake-up call for a community that has been focused on the local Walmart boom.

“What Walmart is doing makes perfect sense as they need to be able to respond to the local market in real time,” Deck said. “But expectations for further growth in this region have based been on the expectation that international suppliers would move here.”

“The question is where do we go from here?” she asked. “Even assuming that Walmart is going to stay here, we have to diversify our economy.”

Deck said local leaders are still trying to figure out what to focus on next. One possibility that has been touted is to attract “green tech” companies to the area.

“The problem there is that other communities around the country are looking at doing the same, so there’s no clear winner at the moment,” she said. “But whatever it is will be driven by research and a change of focus at the University of Arkansas.”

According to Cameron Smith, more suppliers are likely to relocate here, but with so many retail experts focused in one area he thinks the area has become very attractive to medium-sized retailers.

“I wouldn’t be surprised if we see a retailer move their headquarters here within the next five years,” he said. “And if we get one, I think we’ll get five of them. After all, all of their suppliers are here anyway.”

“Major retailers like Target or Home Depot don’t have to move because suppliers come to them,” he added. “But for the medium-sized ones, moving here would make perfect sense.”

Photo by Lucy Nicholson

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COMMENT

Now more than ever, Walmart suppliers from all over the world must put their very best forward, both in terms of the quality of goods and services they sell, and also in terms of the people they have managing the account.

Having the right people in the right seats is absolutely critical, which is what truly sets a firm like CSA Recruiters apart from the rest.

But once they are in the right seat, it’s critical that companies invest on an ongoing basis in the development of those people … to ensure they are using tools like Retail Link to it’s fullest capability, but also to stay sharp in a contextual sense … as the change inside the organization only continues to accelerate.

Struggling against the stigma of unemployment

Nov 9, 2009 16:34 UTC

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BELLA VISTA, Arkansas – Until he lost his job back in August, Jimi Nash, 32, had not given a job interview since he left high school. Now, the tile worker is willing to take any job he can get.

“If I have to I’ll take a job making donuts. It’s tough to lower myself to that level. But a job’s a job,” he said in his home in Bella Vista. “Since I lost my job I have had bouts of depression and I have felt worthless.”

Jimi, his wife Jamie and their two daughters moved here last year from Arizona because work dried up as the housing crisis killed off construction projects where Jimi could lay tiles.

“Jimi’s salary basically went from $70,000 to $20,000 over a two year period,” said Jamie, 31. “It was a difficult choice to make because all our family is in Arizona, but there was no work for Jimi so we moved here.”

“We did what we thought was best for our family.”

The family moved to Bella Vista, not far from Bentonville where retail giant Walmart has its headquarters, in the summer of 2008. Their run of bad luck continued when Jimi broke his leg in December and – because he is self-employed and does not qualify for unemployment benefits – they burned through their savings in the four months he was unable to work.

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Jimi went back to work in April, but lost his job in August. Since then he has been unable to get work. They are now reliant on Jamie’s salary from her job as a nursing assistant.

“We just refinanced the mortgage and had a month where we didn’t have to make a payment,” she said. “If we didn’t have that break, we would have fallen behind on the mortgage.”

The family has stopped eating out and has pared back their budget to necessities. They now use credit cards for emergencies.

“We never really thought anything about eating about before,” Jimi said. “Now we’re really grateful to have a meal out, even if it’s Taco Bell.”

Jimi has sent out dozens of job applications and attended a job fair, but said that everywhere that he applies there are multiple applicants chasing the same job. The unemployment rate in Arkansas is 7.1 percent, lower than the national average of 10.2 percent, but Jimi said competition for the few jobs around is fierce.

He said that the stigma of being out of work has been the hardest thing for him to deal with.

“All I’ve ever known is working hard to feed my family,” he said. “Now I wonder how friends and family look at me and what they think of me.”

“I’m afraid they look down on me.”

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The Nashes say they are hanging on for now. Friends have invited them over to celebrate Thanksgiving, which would otherwise be a major expense for them. But the holidays follow soon after.

“We’re trying to even think about Christmas right now,” Jamie said.

Photos by Lucy Nicholson

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COMMENT

I am doing better now I got a job as a security guard.the pay is not good but im happy to finally have a job. I am still doing some tile work it makes me happy. there is hope for everyone if u keep tring and dont give up

Posted by James Nash | Report as abusive

Emulating the greatest generation and avoiding “God Inc”

Nov 9, 2009 16:12 UTC

BELLA VISTA, Arkansas – Pastor Jonathan Watson says that he would like to be more like America’s greatest generation than the destructive one that followed it.

“Many people I know of my generation would like to be more like our grandparents’ generation than our parents’ generation,” Watson, 34, said in his office at the Bella Vista Assembly of God. “That was America’s Greatest Generation. They were children of the Great Depression and they were a generation of people who lived by a standard.”

The generation that followed – the Baby Boomers – were the “hippies of the 1960s, the disco goers of the 1980s and the power brokers of the 1980s,” Watson said. “That generation has eaten up everything that their parents left them and leave nothing but debts behind them for the rest of us.”

Watson, whose church is in this small town near Bentonville in Northwest Arkansas, which is home to retail giant Walmart, said he believes that America needs to rebuild its sense of community and rediscover its moral compass.

“The hippies wanted to do good things and change the world. Unfortunately, they changed the world for the worse,” Watson said. “Many of us have looked at our grandparents and think that their way was better. We think it’s better to buy a house and live in it for 40 years, spend your life with just one woman and love your children.”

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In a country where many churches are aiming to expand their numbers and mega churches have become ever more popular this pastor wants to keep his flock small.

“Everyone in America wants a bigger church,” he said. “A bigger church brings more money, more clout and more power. But if you have thousands of people in your church it’s hard to minister to them and build relationships with individuals.”

“After a church reaches a certain size it becomes God Incorporated,” Watson said. “Not that that’s a bad thing, mega churches do lots of good work, but we prefer to keep our membership small so we can have a relationship with everyone.”

Watson’s church averages service attendance between 230 and 280. Attendance was higher, but he recently set up a new church in Centerton, about 10 miles away, with some 40 members of its congregation, which is now growing.

The pastor said that this is the model for expansion, that rather than growing beyond its maximum capacity of up to 700 people, the church would rather set up fresh congregations and church’s using a portion of the congregation.

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Watson said that although his congregation has been growing, the average donation per capita has fallen 10 percent to 20 percent thanks to the financial difficulties some of his congregation find itself in.

“I hope that for everyone this crisis will help people learn there are people here to help,” he said. “And I hope that eventually more people will go beyond the idea of finding a dollar and spending it as soon as you can.

Photos by Lucy Nicholson

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COMMENT

Wow! He’s gone a short ways sense his days at CBC. His dad pastored one of the biggest churches in springfield, mo. Keep memebership down! Ha. You mean noone wants to come here him talk. There is no such thing as the greatest generation or the worst. There is good and bad in each generation. Sounds like reverand watson has grown out of touch with the rest of the world. I’m 32 and went to school with him. I don’t know a single person under the age of 80 that thinks the 40s was the best times. Arkanasas hardly counts as the rest of america.

Posted by joe stewart | Report as abusive

Learning to live with less, and appreciating it

Nov 9, 2009 15:30 UTC

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BELLA VISTA, Arkansas – For a man who has had his salary cut 10 percent and now has to work hard to make it to his next paycheck, Denny Robertson is in a philosophical frame of mind.

“I have had to learn to live with less. But I have shelter and I have food, so I have everything I need,” he said. “It’s uncomfortable to run out of money before the next paycheck, but we’ll get by.

Robertson, 34, is a product engineer at tool maker Kennametal Inc. at a facility in nearby Rogers. Facing the longest and deepest recession since the 1930s, earlier this year the company laid off some staff locally and – in a bid to preserve jobs – gave others one week of furlough, or unpaid leave, every month.

After five months of that, however, the company gave salaried staff a 10 percent pay cut instead in order to keep the facility open at all times.

“If the economy shows signs of improvement then my salary will go back up,” Robertson said. “But I’m not holding my breath that the economy is improving and I’m not banking on it.”

“I keep hearing that the economy is recovering but I just don’t see it.”

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Robertson and his wife Rebecca have two young daughters and have had to rethink their budget.

“We have picked up some good habits because of my situation,” he said, speaking at his home in this leafy small town in northwest Arkansas, which is just a few miles from the home of low-cost retail giant Walmart in Bentonville. “We eat out less and I have become more disciplined at making my own lunches for work rather than eating fast food every day.”

As a result, he has lost 20 pounds this year without any additional exercise. The Roberstons also now buys second-hand clothing and with the holidays coming up is planning to buy gifts only for children in their extended family – they will make cookies and other gifts themselves for the adults.

Robertson has stopped paying into his 401(k) retirement savings plan and the family now relies on credit cards only for emergencies.

“The credit cards are only for unexpected things,” he said. Recently his two daughters came down with the H1N1 virus and even with his healthcare coverage he had to charge co-payments and prescriptions to his credit card.

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Robertson said that living with less has made him appreciate his church even more and he has raised his tithe payment to the church to 10 percent of his income.

“Even once my salary rises I’ll continue to do that,” he said. Another thing he said that will continue is that he intends to live within his means and not buy into America’s consumer culture any more.

He said that his church has members who are children of the Great Depression and this downturn has taught to appreciate what they went through growing up.

“In one way this recession may be a good thing for my generation,” Robertson said. “Perhaps this is what we need to build a little character.”

“We don’t have to have the latest TV to enjoy life,” he said. “Sure, I’d like to have that TV. But unless I can pay for it in cash, I’m not going to buy it.”

Photos by Lucy Nicholson

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COMMENT

Kids really are expensive! We all just need to tighten our belts a little and we’ll be fine. People have lived with far less in the past.

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