Archive for Tuesday, November 24, 2015

Coffeyville weathers Amazon job losses better than expected

November 24, 2015

— Football fans still pack Veterans Memorial Stadium here on Friday nights and Saturday afternoons in the fall. The Verdigris River still flows sluggishly by.

Life continues in this town of about 10,000 a year after its biggest employer, Amazon, announced it was leaving. The closing of the distribution warehouse, along with a couple of other plant closings and layoffs last year, meant the loss of more than 800 jobs — about 5 percent of all jobs in Montgomery County, The Wichita Eagle reported.

The town and county haven't fully recovered, but the panic has receded. The local refinery is booming. There have been a few plant expansions. Some people have found work out of town. The worst didn't happen.

"Amazon leaving, to a county of this size, will have an impact," said Coffeyville Mayor Chris Williams. "But the consensus of the city council is that we feel we have weathered it."

But many also acknowledge that the Amazon departure feels like another in a long line of hits for the town, county and southeast Kansas region. It's a decades-long story of slow decline, population loss, of coming back from each downturn or crisis a little smaller.

It hit its peak population in 1930 and has been slowly shrinking since then, along with much of southeast Kansas. It has been a constant struggle to retain people and jobs.

Asked how the economy is doing, Chatterbox Gifts owner Mary Nyhuis answered bluntly: "It stinks."

She said that her sales in 2012 were twice what they are now. She didn't attribute the drop to the Amazon closing directly, but more generally to the tough local economy.

"I do like having the store," she said, "but this is getting ridiculous."

Rumors had been circulating for years about the 915,000-square-foot Amazon warehouse closing and had never amounted to anything. But on Sept. 29, 2014, when Susan Joplin, a manager in human resources, saw an email alert that a top executive would visit the warehouse, she had an inkling of what was coming.

The meeting was short. He told the assembled staff that Amazon was moving in a different direction. It needed warehouses in large cities to speed delivery to more customers. Those who stayed through the end in January or February would collect severance.

Then they were released to take the rest of the day off. Joplin watched as the employees filed out, some angry, some sad, many stunned.

"I was thinking, 'What are those people going to do?' " Joplin said. "There were a lot of husbands and wives, so they were losing both incomes. What is this going to do to the community?"

It had already been a tough year for Montgomery County. In March, wire and cable maker Southwire announced that it would close its plant and lay off nearly 200 people. Fire hit the Coffeyville Resources oil refinery on July 29, injuring four workers and shutting down production for more than a week.

In mid-August, John Deere announced that it would lay off 38 people at its plant, as farm machinery makers everywhere ramped down production in reaction to falling farm incomes.

There was a lot of gloom hanging over town a year ago, but the situation hasn't turned out as badly as feared.

Perhaps half of the Amazon workers came from outside of Montgomery County, spreading the pain across the region.

The Amazon workers worked into January, then received severance packages and unemployment insurance. Some were offered a chance to work from home. So, they had income until the end of August. It gave the town and the workers time to adjust.

Patti Veley worked in the warehouse until the end of January. She used her severance check to pay bills ahead and spend time with her teenage children.

She said her job search was pretty relaxed while her unemployment held out.

"I've worked since I was 16 years old, so I took some time off to be with my kids," she said. "I had some quality time with them because I'd never had that."

Veley keeps up with some of her former workmates.

Some of the managers left with Amazon. Some of the warehouse workers found work at the Macy's Distribution Center in Owasso, Okla., or the Wal-Mart Distribution Center in Ochelata, Okla. Macy's even runs a bus up to Coffeyville to pick up workers for the 120-mile roundtrip.

As her benefits ran out, she started looking — and immediately found the job she now holds in Coffeyville.

"I got blessed because I found it the very next day," Veley said.

In another enormous stroke of good fortune, the Coffeyville Resources refinery and the associated Coffeyville Resources nitrogen fertilizer plant had their periodic maintenance, called a "turnaround," this summer and fall. It brought 3,000 or 4,000 contract workers into town.

Retailers used to look forward to the influx of seasonal workers at the Amazon warehouse late in the fall. But this year, the town's retailers got more, and better paid, contract workers, who promptly started buying things.

"Try to find a hotel room in Coffeyville, Kansas. Ain't gonna happen," said Williams, the mayor. "It's been an economic boom. The only thing those guys bring is a suitcase."

Then the county had several welcome plant expansions. John Deere brought a production line from China to reverse its earlier layoff announcement.

State and local officials worked hard and kicked in the money or land to close deals with Loren Cook Co. and Acme Foundry for about 90 new manufacturing jobs.

Aaron Heckman, executive director of Montgomery County Action Council, the county's economic development group, said such efforts helped make up more than half the jobs lost with Amazon and Southwire.

In October 2014, before the Amazon announcement, the county had 16,428 jobs, according to the Kansas Department of Labor. This October, after a dip in employment throughout the year, it has rebounded to 16,118 jobs — down just over 300 jobs from a year ago.

"We wish we still had the (Amazon) jobs, but a lot of the other businesses are doing very well and that is where our focus is," Heckman said.

The results surprised Pat Patteson, director of the local food pantry, Genesis of Coffeyville.

"We actually served fewer people than last year," she said. "That was sort of amazing to us. We really expected that we would have a whole lot more people than we have."

Joplin, the laid-off Amazon manager, has been out of work since the closing, but said she recently had a second interview for a job and hopes to be hired in the next few weeks.

She said most of the people she used to work with either moved with Amazon or found work in the area.

"I haven't seen an economic fall off in the community, really," she said. "I'm not saying it's not happening, but I haven't seen a lot of 'closing' signs."

But the fact remains that Coffeyville faces a difficult future, no matter how favorable its short-term circumstances.

The unemployment rate in Montgomery County in October is one of the state's highest, at 6.1 percent. It's part of a cluster of southeast Kansas counties with the highest unemployment in the state. The state unemployment rate is a not-seasonally-adjusted 3.7 percent.

The town has lost about 4 percent of its population since 2010, particularly young adults, according to the Census. And the area is one of the poorest in Kansas, with 25 percent of its population below the poverty line, twice the state rate.

Macy's runs a bus up to Coffeyville to pick up workers for its distribution center in Owasso, Okla.

And for all of the public optimism, economic activity in the town is slowing down.

Since February, the month the Amazon layoffs became effective, retail spending in Coffeyville has fallen by nearly $5 million, about a 4 percent drop, based on sales tax figures. With the exception of August and September, when the refinery contractors were running heavy, every month has been below the same month of 2014.

Officials in Coffeyville, Independence — which just suffered the loss of its hospital — and Montgomery County are intensely focused on bringing in jobs.

"One of the things that has happened is I see more of 'Let's look at this regionally, let's work together,' " said Independence Mayor Leonhard Caflisch. "There's more communication between Independence and Coffeyville and the city and county commissioners."

They have a lot to promote: several large modern empty industrial buildings, strong incentives, eager officials, a ready workforce and a low cost of labor. Heckman said he is confident companies will soon fill some of that space.

Becky Campbell opened the Sunflower Soda Fountain, at 125 W. Eighth St., after she was laid off in 2008.

Her experience mirrors the can-do spirit of the town: She works hard and her restaurant continues to grow. But, she acknowledged, Amazon's closing did make her uneasy.

"I'm not a down person," she said. "I refuse to be negative.

"But I can't say it didn't make me a little nervous."

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