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From humble beginnings to goodwill enterprise: Manufacturing medical supplies provides jobs for disabled

Crafting cornhusk dolls is a far cry from mass-producing blue surgical drapes, but one local non-profit made that leap in a matter of about four years.

Today Haywood Vocational Opportunities LLC employs 365 people — more than a third of whom are mentally or physically disabled. Its mission is to bring disabled people and jobs together, whether the position is with HVO or another employer.

“We want to put people in a real working environment,” said George Marshall, who has served as HVO’s president for nearly 30 years.

The Haywood County nonprofit trains disabled clients to hold down jobs in the real world, from the importance of getting to work on time to job-specific skills such as how to buff floors.

Meanwhile, the business side of the company manufactures a variety of medical supplies, including IV bags and surgical instrument covers, for about 40 customers worldwide. A majority of its business focuses on making sanitized surgical drapes similar to the one’s dentists place on a patient’s chest during teeth cleanings.

HVO is more than a business with a philanthropic bent — it is a charitable organization first and foremost that funds its mission through its manufacturing line.

“Our business enterprise is here to support our mission,” said Jeff Ledford, the nonprofit’s business development manager.

When HVO was founded in 1972, it had just six clients who spent their days make crafts such as cornhusk dolls to sell.

But, Fred Spencer, who served as the non-profit’s director from 1973 to 1975, had bigger ideas. He began knocking on doors and cold-calling companies looking for outsourced work for his clients. The person who happened to take him up on the offer needed belt loops and ties for disposable surgical gowns.

“We knew state and federal dollars … could not provide and would not over the long-term,” Marshall said.

Almost 96 percent of HVO’s revenue comes from production sales.

During fiscal year 2010, HVO reported $30.1 million in revenue — up from about $27.2 million the previous year, according to its federal nonprofit tax form. By comparison, its expenses were only $28.9 million — a gain of more than $1.3 million.

The impressive increase in revenue is likely a result of additional sales and grants related to its expansion into the old Wellco plant in Hazelwood, according to Beth Chittum, HVO’s market research analyst.

In September 2010, HVO bought the closed-down boot factory and turned it into a satellite facility, located just half a mile from its main headquarters off Hazelwood Avenue. The expansion created 32 jobs.

As a non-profit, HVO is also eligible for government funding.

The company received $740,749 in government grants during fiscal year 2010, some of that again related and an additional $350,363 in funding from other sources. It received only $490,010 in government money during the prior fiscal year.

Since 1972, the nonprofit has expanded to serve about 250 clients with disabilities annually, and has continued to grow its medical supplies business.

The nonprofit has averaged 10 to 12 percent growth each year, Marshall said.

“That’s pretty strong,” he said.

Business continued to grow despite the recession, Marshall said, adding that HVO was fortunate to get into a niche medical market.

“We backed into this one,” he said. “I have not seen our business in this healthcare industry really affected.”

There is no ceiling for HVO’s potential growth even though it restricts Marshall’s ability to engage with the clients on a daily basis.

“Growth has taken me further and further away from that daily business of HVO,” he said. “I would love to be active literally in our work areas.”

Although Marshall himself cannot spend everyday with HVO’s clients, the nonprofit employs three job specialists who work one-on-one with clients and follow-up with those who have graduated from its training program. The specialists help clients find what type of work they are interested in doing and teaches them the necessary skills needed to function in the workplace.

Clients who are in training receive a stipend, which is less than the salary of a full-time employee who has completed the program. HVO declined to comment on how much its employees are paid.

During the past three years, HVO has hired 52 of the 128 clients that it has placed in jobs after graduating from the training program.

The nonprofit offers a blended workforce of everyday people and individuals with disabilities. The one similarity among all the workers are hairnets and light blue smocks, which are required to maintain a sanitary workplace. Walls are also lined with nametags and hooks for each employee to hang his or her smock at the end of the day.

Because it manufactures medical supplies, the Food and Drug Administration audits the nonprofit. To keep up with federal sanitation requirements, HVO takes a number of precautions, from simply washing hands to air lock doors for some rooms.

Employees pass through an automated door into a small holding chamber, where they wait for the door behind them to close before the next one opens. This restricts the airflow into the room and helps prevent contamination. Visitors must stay behind a bold yellow line on the concrete floor so they do not contaminate the workspace, and several rooms can only be entered if a person is wearing a hairnet and smock.

 

‘Good training program’

Although HVO does hire some of its clients, others have obtained jobs at Ingles, Burger King and Goodwill, among other businesses.

Ingles grocery store off Russ Avenue currently has three or four employees who completed training at HVO, said manager Jeff Henderson.

“They always had a good training program, and they would work with them on-site too,” Henderson said. “It has always been a hands on effort for them; so, we were proud to be a part of that.”

Companies who hire disabled employees receive a federal tax credit. The amount of the credit depends on the company’s tax bracket and how much the employer pays in wages.

HVO’s older clients who work part-time or can no longer work can join the Learning and Enrichment program, where they spend time making crafts, gardening, cooking and volunteering.

Many of the nonprofit’s employees and clients volunteer in some way — with Meals on Wheels, MANNA FoodBank and others.

“We need to contribute back to the community,” Marshall said.

After receiving funding from the United Way for 15 or more years, HVO is now one of the largest contributors to the local United Way, he said.

Clients particularly enjoy ringing bells for the Salvation Army at Walmart and K-mart because they are able to interact with area residents.

“I think (HVO is) tremendously helpful to the community,” said Larry Clark, who has served on the non-profit’s nine-member board of directors for three years. “It’s a story that really hasn’t been told.”

 

Thirty years and no end in sight

George Marshall is the one constant at Haywood Vocational Opportunities LLC, which has continued to grow during his almost 30 years as its president. And, he doesn’t plan on retiring anytime soon.

“I enjoy what I do,” said Marshall, who can easily be described as a man married to his job.

He is the face of HVO, representing it both around the state and nationally. Marshall, who earns $173,511 a year, focuses on the big picture, guiding the organization’s expansion and mission.

“I’ll say this about him because he won’t; George is very well-respected in the community,” said Beth Chittum, HVO’s market research analyst. She agreed that Marshall will never retire.

During his tenure, HVO has grown from a tiny medical supplies operation into a stable business whose products are shipped globally.

“George Marshall runs a great place down there,” said Waynesville Mayor Gavin Brown.

While teaching in Swain County in 1978, Marshall applied for an instructor position in the continuing education department at Haywood Community College. The job was within HVO, which, at the time, was part of the local college.

“This was when we were just really developing our work, our business enterprise operations,” Marshall said.

His background in industrial education and career development ended up lending itself well to the position, and within about six months, Marshall became the nonprofit’s first operations manager. From there, he was named president of the organization in June 1982.

Marshall has the longest tenure of any HVO leader by a wide margin, having working there for about 33 years. The prior directors stayed in their positions for fewer than eight years; the first retired after just six months on the job.

“(Marshall) provides great leadership,” said Larry Clark, who chairs HVO’s nine-member Board of Directors. “When he speaks of passion for what he does, I think it’s a true statement.”

A humble man, Marshall would rather be on the ground floor of HVO’s operations than in his office overseeing the company’s budget.

“I would love to be active literally in our work areas,” Marshall said. “That’s where I started; that’s my background; and that’s what I enjoy the most.”

But, as the nonprofit continues to grow, Marshall gets further away from the daily business of HVO. He said he is disappointed that he cannot enjoy as much face-to-face interact with clients as he did in the past.

Oasis of jobs: Cherokee casino emerges as a lifeline in sour economy

Help wanted signs aren’t too common these days. But there’s an anomaly here in the far end of the state, where Harrah’s Cherokee Casino and Resort is in the throes of a $633 million expansion, one that will bring 800 new jobs to an otherwise desolate labor market.

Hiring that many new workers — plus keeping up with turnover — is no small feat. The casino has averaged 30 new employees a week during the height of its expansion. It takes a staff of seven, day in and day out, to sift through all those applications and set up interviews. Hiring is such an all-consuming task that official signs point the way to “applicant parking” and even an “applicant entrance” on the casino property.

Harrah’s has hired 500 new employees over the past two years to run the new hotel tower, expanded gaming floor and half a dozen new restaurants. It has another 300 to go by this time next year when the expansion is built out.

“We are one of the few businesses that is adding jobs,” said Darold Londo, the general manager of Harrah’s Cherokee. “Name another company in North Carolina that will have 300 more employees at this time next year than they do today. You can’t. There isn’t one.”

The recession has made hiring easier for Harrah’s.

“When the economy was really going well, we had a bit more of a challenge finding people,” said Jo Blaylock, vice president of human resources at Harrah’s Cherokee. “The economy has helped us in that sense because a lot of people are without work.”

Employees are staying longer as well. Turnover averaged about 30 percent before the recession compared to 20 percent now.

“People are tending to hang on to their jobs. There aren’t a lot of other opportunities out there,” Blaylock said.

While out-of-work Realtors or laid-off teachers have given Harrah’s hiring a boost, Blaylock predicts some will return to their primary field when the economy recovers.

But for now, Harrah’s is an oasis of jobs in an employment desert.

Kim Gurdock of Franklin was ecstatic to land a job with Harrah’s recently after months of looking for work. She moved to the mountains from south Florida earlier this year, giving up more than two decades as a teacher to forge a new life in a better place. But the only job she could find was working at McDonald’s.

“I had applied for 42 jobs in Franklin,” Gurdock said, a list that included the school system, banks, grocery stores and retail. Gurdock felt like her lack of local roots was a strike against her.

She starts this week as a food runner in the VIP lounge at the casino. Her boyfriend also got a job at Harrah’s as a cook, and she hopes they can work the same shifts to carpool for the 45-minute commute.

Her story isn’t that unusual.

“It is amazing the number of job applications any more that we get for jobs. It used to be 15 applications, and now it is 75 or 80,” said Dale West, the Employment Security Commission manager for Jackson, Macon and Swain counties. “If there are openings, people will apply if they think they are at all qualified.”

Josh Williams, an accounting student at Western Carolina University trying to pay his way through school, was commuting from Sylva to Asheville to work at J.C. Penney, one of the only jobs he could find. But his hours kept getting cut. So he applied at Harrah’s on the advice of a friend at school. He starts this week in food service at the new Paula Deen’s Kitchen restaurant on the property.

He considers himself lucky “considering jobs are scare right now,” he said.

 

A blow to unemployment

Harrah’s payroll accounts for 8 percent of all wages and salaries in Jackson and Swain counties. It’s one of Western North Carolina’s largest employers, and not just for people in Cherokee.

Tribal members make up less than 20 percent of Harrah’s workforce — only 350 of the nearly 2,100 employees are Cherokee.

The number seems low at first blush, considering Cherokee is home to about 7,000 tribal members. Some are obviously too young or too old to work. Others are stay-at-home moms, disabled or have otherwise dropped out of the workforce.

A large number of tribal members work for tribal government and agencies, nearly 1,000. Then there’s the myriad gift shops, hotels and restaurants plying the tourist trade in Cherokee — and suddenly the pool to draw from locally isn’t all that large.

The upshot to the region is that the casino has to look outside Cherokee for a huge number of its employees.

Unemployment in Swain County was 18 percent in 1995 before the casino opened. It dropped to a low of just 5 percent in 2006.

“It has made all the difference in the world as far as unemployment,” said Brad Walker, the mayor of nearby Bryson City. “If you want a job, you can get one. It has improved the lives of a lot of the people in Bryson City and Swain County. It is fantastic.”

While the recession has driven unemployment in Swain back up to about 13 percent, it could be far worse without the casino.

Most notably, perhaps, is the improvement in the labor market in winter months when tourist jobs historically dried up. Before the casino, the unemployment rate in Swain regularly topped 30 percent in the winter. By 2006, however, unemployment even during the dead of winter was as low as 8 or 9 percent.

“Before the casino a lot of tourist places closed for the winter and now they stay open,” said Vicki Horn, who works at the Employment Security Commission in nearby Bryson City.

Interestingly, the success of the casino has made the total job market more robust, eating into the available workforce for the casino itself.

“The casino has allowed tribal members to work other places,” said Vicki Horn with the Employment Security Commission in Swain County.

Casino revenue flows to tribal coffers, creating jobs for members of the tribe. The same goes for private businesses now thriving thanks to casino spin off.

“This hotel wouldn’t be here if it wasn’t for the casino,” said Walker, the general manger of the Fairfield Inn in Cherokee.

 

A challenge to hiring

The huge influx of casino employees has stressed the affordable housing market. Affordable housing for blue-collar workers is a challenge in most communities. But it was particularly true in the mountains, where real estate prices have been driven sky high by the burgeoning retiree and vacation home market, leaving low-paid hourly workers in the service industry struggling to find housing they could afford.

A surprising number of new hires at the casino have moved here specifically for the work, but have trouble finding somewhere to rent.

“I had a guy come in yesterday who told me he had accepted a position at the casino and was looking for a rental,” said Megan Cookston, a Realtor at Yellow Rose Realty in Bryson City. “That is a problem in this area. They ask ‘Where do we look?’ and really the only place to guide them to is the newspaper, but there is not that much there.”

Yellow Rose manages short-term vacation rentals, and those have been doing a brisk business thanks to the massive $633 million expansion at the casino. Construction companies have been renting houses to put up their laborers in town for the job.

“Electricians, plumbers, people hanging sheetrock — it is just everything,” Cookston said.

To meet its hiring goals, Harrah’s solicited the help of Haywood Community College to hold job fairs on the casino’s behalf. Once a month, Harrah’s hiring team travels to Waynesville to tap a fresh pool of applicants.

“We can see 30 in a day instead of 30 driving over here,” Blaylock said.

Harrah’s has a strict drug testing policy that likely hurts its employment pool. All new hires are tested for illegal drugs using a hair sample, which detects substances going back 90 days, far more stringent than the standard urine test. Every month, the casino does random drug testing on 1 percent of the work force, selected from a computer-generated list.

“The drug test is something that we do not waver on,” Blaylock said. “I think some people don’t apply because they know we do drug testing.”

 

All about the perks

Salaries at Harrah’s vary widely based on the job. Stewards make $8 an hour, while cashiers make $9. But food service supervisors make $45,000 a year, and the grounds supervisors and top chefs make up to $55,000.

But the benefits, particularly the health insurance, make up for what the salaries may lack.

Nationwide, businesses are cutting benefits as they grapple with rising health care costs. Employees are ponying up a greater share of their insurance costs and forking over higher deductibles and co-pays.

At the casino, workers don’t pay a dime toward their health insurance.

“They are better benefits than you will find anywhere else,” Londo said. “You can thank the tribe for that. Cherokee has established that as the norm for anyone who works for the tribe.”

The tribe covers the full cost of medical, dental and vision insurance for all tribal employees, and extends those benefits to the casino as a tribal entity. Legally, the casino can’t have two tiers of benefits for employees — it can’t offer better coverage to enrolled members than non-tribal members — so everyone, whether Cherokee or not, enjoys the generous health insurance plan of the tribe, Blaylock said.

Harrah’s takes the health of employees seriously. As a self-insured entity, every doctor’s visit comes out of the casino’s bottom line.

To cut those costs, the casino is hiring an in-house physician’s assistant and will open two onsite exam rooms in January. Being able to see a doctor at work will also cut down on employees clocking out for doctor’s appointments.

Employees also get a physical every quarter. If they are overweight or if their cholesterol is too high, the casino gives them a cash incentive to meet health goals. Al Lossiah, a employee trainer, bragged about getting $75 for losing 25 pounds this year.

“Then I gained it back and they’ll pay me to lose it again,” he joked.

To encourage fitness, Harrah’s has an onsite workout room with treadmills, bikes and rowing machines open to any employee who wants to use it.

Some employees probably don’t need it though. Gaming hosts walk an average of eight miles every shift, while the laundry team hefts 12,000 pounds of linens in and out of machines each day.

Alternatively, a pair of black leather vibrating massage chairs are up for grabs on breaks or after your shift.

While health insurance tops the list of coveted benefits, it’s one of many offered by a company that prides itself on taking care of its employees. Workers get a 3 percent match to a 401K, plus a pension worth another 3 percent of their salary. Vacation time maxes out at a liberal six weeks after nine years on the job.

There’s non-tangible perks, too. Harrah’s partners with Southwestern Community College to offer GED classes onsite at the casino and covers the enrollment fee for anyone who wants to pursue it.

There’s also assistance of the monetary variety. Harrah’s makes grants or loans to employees that have fallen on hard times through its “employee care fund.”

If an employee is dealing with a difficult teenager at home, substance abuse in their family or the stress of caring for elderly parents, Harrah’s pays for counseling.

“It is easy to say leave those concerns at the door and come in and service the guests, but in reality it is not that easy to do that,” Blaylock said. “We take a holistic look at our employees. If they feel good about themselves, they will exude that when they are talking to the guests.”

In that sense, Harrah’s loyalty to its employees isn’t entirely benevolent. It’s a little more mercenary than that: happy employees equal happy players equal more money at the end of the day.

 

Total Harrah’s Cherokee employees: 2,084
Jackson    796*
Swain    690*
Haywood    308
Macon    121
Graham    50
Buncombe    27

*Figures for Jackson and Swain include employees living on the Cherokee Reservation, which lies partly in both counties.

Rank-and-file casino workers told to turn on the charm

In a basement classroom at Harrah’s casino, a fresh group of new hires stretched out before Al Lossiah, the latest in an endless stream of weekly newbies.

They were here to learn the art of moneymaking, with Lossiah as their guide, motivator, acting coach.

“You don’t have to like them, but you got to be nice to them,” Lossiah said. “You guys have been hired as entertainers now, you learn to act. When they walk in the door, this is what I see when I look at their face.”

He picked up a marker, turned to a dry erase board and drew a giant smiley face. But in place of eyes, he put two dollar signs.

“When you do your job, we all get paid,” Lossiah said. “Keep these people happy, keep them spending that money here.”

With 3.5 million guests tromping through the casino every year, smiling at each one of them can be taxing. But employees can’t afford to let down their guard. You never know which one is the high roller, Lossiah said.

Players spend hundreds of millions at Harrah’s every year. But it’s a relatively small number of players accounting for most of the play — roughly 10 and 20 percent of players account for 80 to 90 percent of the gaming revenue.

Lossiah and those who have worked there long enough know who the high rollers are. There’s one lady who spends about a million a month, every month, he said.

“She can go anywhere in the world she wants to go, the Riviera, anywhere. But she chooses to come to Cherokee. Why? Because we treat her like a queen,” Lossiah said.

“If I was out in the public and someone said ‘I got some dust on my shoes’ I’d say, ‘Here’s a quarter go call somebody who really cares,’” Lossiah said. “Here, I can treat anybody like a king and a queen. Can I get you a drink, can I get you a cup of coffee, and you smile at them.”

He pointed to his smiley face with the $$ eyes again.

“They pay good money for us to be nice to them,” Lossiah said.

For tribal members who work at the casino, there’s a double incentive. Tribal members get a share of casino profits, amounting to more than $7,000 for each of the 14,000 members of the Eastern Band last year.

“You do your job well, guests are happy, they stay longer and play more, the casino makes more money, and per cap checks are higher,” Lossiah said.

 

A different kind of interview

Job seekers eager to jump on the Harrah’s Casino gravy train should be forewarned: brush up on your singing and learn a few jokes.

To measure stage presence, applicants are put on the spot, not only in front of the hiring team but as one of 10 job seekers in a panel-style interview.

“We might say imitate your favorite celebrity. We want to see if they are inhibited and can’t stand up and talk, versus who can stand up and really sell themselves,” said Jo Blaylock, vice president of human resources at Harrah’s Cherokee.

It doesn’t matter if you are applying as a hotel maid or kitchen dishwasher, Harrah’s wants all employees to think of themselves as being in the entertainment business.

“Do you have the energy, do you have the personality, can you talk in front of people,” Blaylock said. “We are really looking for people who can converse and have good relationships with guests — people that can have a good time and have a good personality.”

Not every job demands such a disposition. There are plenty back-of-house jobs, from the laundry to the landscaping team. In that sense, placing new hires in the right job is just as important as who gets hired.

Harrah’s is loyal to its employees and will work to find a good fit

“There’s about 250 different things to do here,” said Darold Londo, the casino’s general manager.

There’s fulltime light bulb changers, people who repair torn upholstery — there’s even a full-time staffer dedicated to making sure the culinary desires and whims of stars performing at Harrah’s are met during their stay. Grocery bags of soda and chips were piled up in a posh backstage lounge a couple of weeks ago awaiting the weekend arrival of country star Travis Tritt.

 

‘Opportunities abound’

Rising through the ranks is common at Harrah’s. The prospect of promotion is part of the job allure.

“What I convey is if you like the organization and our DNA that is unique to Harrah’s, there are opportunities abound within our organization,” Londo said. “There are people doing things that are beyond their wildest aspiration when they started at this organization.”

Londo tries to plant the seed of a Harrah’s career track when speaking to new hires.

“I want you to look back in five years and see this as the defining moment in your professional career,” Londo told a recent batch.

To help develop managers from within, Harrah’s Cherokee has a team of four fulltime, in-house trainers.

When the Eastern Band launched its casino enterprise in 1997, the tribe was angling for more than just money. It hoped the business would provide jobs for tribal members, Londo said. Many in top jobs today are Cherokee who rose to their positions.

Employing columns of tribal members remains a major goal, but not everyone is cut out for customer service jobs, particularly in the casino sector where wooing players with smiles and charm seems to fall on everyone’s shoulders, even the $8.50  an hour food runners and carpet cleaners.

“That is a real live business challenge,” Londo said.

Since taking the helm at Harrah’s six years ago, Londo has made a point of dropping in on every new hire training, a first for general managers at the Cherokee casino. He spends an hour chatting up the week’s new hires, a non-scripted and free-wheeling spiel that feels more like friendly banter over happy hour than a corporate lesson from the top boss.

Londo’s goal is buy-in.

“I want you to look for ways to make this a better place to work and play tomorrow than it is today,” Londo told new hires.

As a kid, Londo was frustrated by Coke machines only accepting coins. So he wrote a letter to “Dear Mr. Coca-Cola” and suggested vending machines that took bills.

Londo encouraged employees to ignore the chain of command. While his old West Point military academy instructors might cringe to hear him say it, Londo told employees they don’t need to run to their supervisor with every question or problem, but instead take it to the person whose job it is.

Oddly, Londo stops short of the mantra of that the customer is always right.

“We will part ways with customers if they do or say something inappropriate because we value our employees,” Londo said. “We want to convey that we value our human resources and our most valuable asset.”

Keeping morale high for 2,000 employees and keeping everyone pulling in the same direction takes constant maintenance beyond that first week of training.

Londo recalled the “have you hugged a security officer today” campaign. It was fun at first, until security officers starting getting dozens of hugs every day from their coworkers.

“It kind of backfired,” Londo said.

Before every shift, supervisors lead their team in a “buzz session.”

“They play a game to get their energy going and get the laughter coming out, to get them pumped up for the day,” Blaylock said.

“A job doesn’t necessarily have to be a job. A job should be something you enjoy and have fun at,” Blaylock said.

“If we are having fun our guests are more likely to have fun. If guests have an enjoyable time they will come back.”

That’s where Lossiah comes back again and again to his smiley face on the dry-erase board, the one with dollar signs for eyes. His red laser pointer frequently finds its way to those $$ eyes during his new hire training.

Lossiah makes no apologies for it.

“That’s Harrah’s financial strategy,” Londo told a recent group of new hires. “We treat you well, you are satisfied you take that to the guests, treat them well, we have job security and financial success,” Lossiah said.

Laid off by state cuts, workers likely to join the underemployed

Dianne Lee is one of the lucky ones — an experienced and talented stained-glass artist, she has a ready-made job to replace at least some of the income she earns at the N.C. Center for the Advancement of Teaching in Cullowhee.

This month, NCCAT Director Elaine Franklin was forced to notify 50 percent of the teaching center’s workforce they were losing their jobs because of state budget cuts. That translates to about 30 fulltime jobs in Jackson County, plus another five to 10 at the center’s campus in Ocracoke. The annual salaries of the laid-off workers ranged from the lower end of $20,000 up to $80,000, Franklin said.

Lee was one of the victims. She has worked at NCCAT for 18 of the institution’s 25 years, helping with programs and running NCCAT’s Alumni Weekends. NCCAT provides training and development for teachers around the state, keeping them inspired and, in turn, more likely to stay in the profession.

“I’m going to make lemon out of lemonade,” said Lee, who in a lengthy phone interview sounded more worried about her colleagues’ employment prospects than her own. “I am losing sleep over them — some are scared to death.”

And, in fact, it’s not going to be easy in this harsh economic climate for the NCCAT workers to replace those state salaries and benefits. They are more likely, experts say, to join the ranks of the growing underemployed in North Carolina.

 

How WNC’s recession unfolded

“This thing has come in waves,” said Victor Moore of OnTrack Financial Education and Counseling, a nonprofit based in Asheville that offers consumer credit advice for North Carolina’s 18 westernmost counties.

Moore said the first wave of help seekers to come to OnTrack when the recession hit were people who basically had engaged in bad loans and were defaulting at the first hint of economic trouble. Then, the construction and building industry faltered, and threw many in the region out of work. The land speculators were next — plans to “flip” properties and make quick profits were no longer viable options, and some people with second homes were also soon in trouble.

Now, to an extent, come the underemployed, Moore said. These might be workers who find a lower paying job, but can’t bank on 40 hours a week and aren’t working up to their earning potential.

Lee, for instance, won’t necessarily start showing up in the official monthly unemployment rate, because she will be operating her business, the Stained Glass Bungalow in Waynesville.

The unemployment rate decreased in just under half of North Carolina’s 100 counties in May, which state officials attributed to a rise in seasonal employment. The state rate was 9.7 percent for that month. Jackson stood at 8.8 percent, Haywood 9 percent, Macon 9.9 percent and Swain 11.1 percent unemployment.

But those numbers fail to take into account the underemployed, a demographic Lee and her laid-off colleagues who are lucky enough to find work are likely to fit — people in WNC who lose one level of job and pay, and are forced to accept a lower level job for less pay and, often, fewer hours.

“Because they are not just going to go out and find comparable employment right now,” said Amy Grimes, director of The Community Table, a soup kitchen in Sylva. “Or, the jobs they can get pay them less than collecting unemployment, which was based on the job lost.”

A recent survey at The Community Table showed an increase in the number of people seeking help who are college educated, Grimes said.

Mark Clasby, executive director of the Haywood County Economic Development Commission, said the unemployment numbers don’t truly reveal the extent of the problem.

“They don’t include the people who have given up on the system,” Clasby said, adding that he worries about what’s coming down the pike for North Carolina.

The state budget problems might continue to compound, he said, leading to even more job losses in the local and state governmental sectors.

“It could be an even bigger problem next year,” Clasby said.

 

It’s all in the numbers

Franklin, head of NCCAT, gets emotional when she talks about having to lay off about half of the 82-member staff, which followed a budget cut by the state General Assembly from $6.1 million to $3.1 million.

This wasn’t about performance issues, this was about money, said Franklin.

“We’re losing good people,” Franklin said, apologizing for tearing up during the interview. “We also told them we hoped to be getting funding through grants and contracts — I hope to hire them back if we can.”

Lee said she has no bitter feelings toward NCCAT or Franklin, she just regrets losing a job she loved so much. Franklin, Lee said, did what she had to do following such drastic budget cuts.

“NCCAT is the only organization in the nation who does this sort of work for (state) teachers,” Lee said. “I cannot tell you how much it means to me.”

Lee has just two years left before she could draw full retirement benefits from the state, and she said there is a possibility that she’ll move to get the necessary time in with the University of North Carolina at Charlotte.

There are jobs openings to be found locally, but they pay $8.50 to $9 or so an hour, said Ann Howell, branch manager in Sylva for the N.C. Employment Security Commission. Howell went last week to NCCAT to talk with the people being laid-off.

“I try to be positive,” the 26-year agency veteran said. “You’ve got to be positive — new doors open everyday. Right now, in these times, perhaps it’s not the brightest doors, but there are some jobs out there.”

The N.C. JobConnector is a new state service that’s proving helpful, she said. It uses an automated system that matches job orders and job seekers based on job-order requirements and job-seekers’ experiences. People are alerted by email to possible employment opportunities — kind of like match.com for employers and prospective employees.

Dale West, a regional manager for the Employment Security Commission based in Macon County, said she is stunned by the impact the construction drop-off had to Western North Carolina’s overall economy, and that the waves are continuing to roll in.

“I knew the construction trade was a major force in our economy, but I’m not sure I understood how big a force it was,” she said.

The jobs lost did not come in one fell swoop, West said, but in a continuous trickle from such tangential businesses as building supply companies.

“A few from lots of different places,” she said.

West also pointed out that many of the people who work in construction or related trades can’t draw unemployment because they worked as sub-contractors, and their bosses did not have to file unemployment taxes as a result.

Jackson County commissioners shift into reverse on hiring policy

When Jackson County’s new commissioners announced they would oversee all hiring to determine whether positions should be filled or wiped off the books, the mandate had a fiscally prudent, vigilant-watchdogs-of-taxpayer-dollars sound.

“I have to admit, this is causing somewhat of a problem in being able to manage this,” interim County Manager Chuck Wooten told the board last week, just more than a month after commissioners so tightly grabbed the reins.

Though commissioners control the budget, statutorily speaking the sheriff and register of deeds — both elected positions — have full powers to do the hiring and firing in their own departments, Wooten pointed out.

Wooten also asked: did commissioners really want to clog-up the system (about 4 percent of the Jackson County workforce is currently open) by scrutinizing positions mainly paid for using state dollars, such as at the health department and in social services, which have their own overseeing boards? And, what about contracted and grant-paid positions? Take a transit driver, 85 percent grant funded, as an example of the latter category, Wooten said. Do you need to personally approve who is hired?

Well, no, now that the problems being created by practically their very first official decision as commissioners (during a Dec. 6 meeting) has become clear, it turned out the board didn’t really want oversight of those hiring decisions. In a 5-0 vote, they agreed in those cases to let others — the departments or boards directly involved, or Wooten — make the hires.

Unlike municipalities in North Carolina, county commissioners must vote for their manager to be given hiring oversight. State law gives town managers that right without elected leaders’ say-so. Most of the state’s 100 counties’ board of commissioners automatically extend that power to the county manager hired to, well, “manage” the county.

Jackson County commissioners did, however, retain the review-before-advertising-any-county-positions paid for purely with county money, via the general fund. Though, it should be noted, Wooten advised the five men they might want to reconsider that decision, too.

Wooten was hired as a temporary replacement for former County Manager Ken Westmoreland, who either elected to leave voluntarily before the new board convened in December, or who was shown the door. This depending on whom you believe, Westmoreland (who said he was forced out) or Chairman Jack Debnam (who said “it was his decision”).

Wooten retired Jan. 1 after 30 years of experience overseeing Western Carolina University’s finances. He has said he expects to help commissioners hire a replacement county manager within six months or so.

Jackson County has three new commissioners: Debnam (a conservative independent); Doug Cody (a Republican) and Charles Elders (a Republican). Democrats Mark Jones and Joe Cowan round out the board.

Lingering recession prompts new round of Haywood job cuts

Haywood County commissioners have cut five full-time jobs and frozen four open positions to stave off a projected budget shortfall for the current fiscal year.

It marks the third straight year commissioners have cut county jobs to counter recession-driven budget deficits. Commissioners held a work session on the issue last week, where County Manager Marty Stamey suggested the job cuts to keep the budget in check.

The job cuts will target county departments involved in the construction trade. Building is still off from pre-recession levels, with a requisite drop in workload for county building inspectors, erosion control officers and well and septic tank permiters. Those departments are also bringing in less in fees. Stamey showed commissioners financial data to demonstrate the decline in building and real-estate-centric services.

The cuts will take the county down to 507 full-time positions, the smallest number of staff they’ve employed since they started keeping count in 2005. The employee count peaked out in 2009, when the county employed 557 full-time staff members, and the number has been dropping steadily every year, to 534 then 516.

Making the cuts would, he said, save the county $200,000 in the 2011-12 fiscal year, while keeping the four unfilled positions frozen would save an extra $250,000, for a total of $450,000 in savings.

Stamey recommended freezing the assistant county manager position, a title he formerly held until being promoted to the top job last fall. Other open positions that will be frozen include project specialist, IT technician and a human resource specialist.

Commissioners questioned Stamey about what effect these cuts would have on county staff, whether they would require layoffs or could be achieved through early retirements.

“Do they have people that are close to being ready to retire?” Commissioner Mike Sorrells asked of the three departments going under the axe. Stamey answered that, yes, some did, but it remains to be seen whether all five positions can be eliminated with retirements or relocations.

Commissioner Bill Upton expressed his reservations, saying he wasn’t sure how much further they could go following last year’s cuts.

“Down the road, it’s going to be tough, because I thought last year we got down to the bare bones and this is probably getting into the bone a little bit,” said Upton.

“We’re drilling into bone,” replied Stamey, who said that remaining county staff have been working increasingly hard over the last two years to makeup for the shortfall caused by losing colleagues.

Commissioner Kirk Kirkpatrick noted that in governmental situations it isn’t as easy to adjust budgets to revenues as it might be in business, because there’s still a certain threshold of services that need to be provided, regardless of how many people use them.

That is, in part, why trimming any more fat will be difficult going forward, and with $3.7 billion in state budget cuts looming, Commissioner Chairman Mark Swanger said he was uncomfortable with the unknown of what that might do to county budgets.

“The unknown here is what bothers me, what kinds of costs will be going to counties,” said Swanger. “It remains unknown what effect it will have on our budget, but it will not be a positive effect.”

Unpaid Ghost Town workers were warned pay might not come

Ghost Town in the Sky, an amusement park in Maggie Valley, failed to pay employees for their final two weeks of work before shutting down for the winter.

While most employees were told upfront that they might not be paid their full wages immediately and were given the choice to work or not, the company could still be in violation of state labor laws.

“The law says they must pay all accrued wages to employees on the regularly scheduled payday,” said Darrell Sanders, supervisor for Wage and Hour Bureau with the N.C. Department of Labor. “Even with the employees’ agreement, nobody can waive the law. As soon as midnight ticked by on payday, the company automatically went into violation of the law and will be until the employees are paid.”

CEO Steve Shiver said the company still plans to pay employees what they are owed.

“They will be paid as quickly as possible. I am doing everything I can every day to make sure that takes place,” said Shiver.

In the meantime, there may be little the employees can do about it other than wait. Ghost Town is operating under Chapter 11 bankruptcy with hopes of reorganizing and regaining its footing. Workers who are not paid by an employer usually take their complaints to the labor department, but the department has no jurisdiction when bankruptcy proceedings are in play.

“It is a large wrench to throw in the machinery,” Sanders said.

Ghost Town filed for bankruptcy early this year. In addition to a $9.5 million mortgage, the park has a trail of unpaid bills with more than 215 companies totaling $2.5 million, including local contractors, electricians, media outlets and equipment rental companies.

Shiver held a meeting with employees going into the final few weeks of the season in October to fill them in on the financial status of the amusement park.

When Shiver leveled with workers and told them cash flow was tight, it came as no surprise. A few times during the year, the park couldn’t make payroll on Friday and instead relied on revenue from weekend ticket sales to pay employees the following Monday. The park eventually moved payday from Friday to Monday on a permanent basis, according to employees. Even then, the park didn’t always make full payroll, and would only give employees a partial paycheck and make up the difference the following Monday after another weekend of revenue came in.

At the meeting, Shiver gave employees two choices: shut the park down early or remain open the rest of the October. If they stayed open, however, there was a chance they wouldn’t bring in enough revenue to pay everyone on time.

Shiver then left the room while employees voted with a show of hands whether to keep working. The vote was unanimous.

“We all knew there was a possibility we may not get paid,” said David Aldridge, a Maggie resident who worked at Ghost Town. “We were willing to risk it.”

Shiver said the dedication of employees is remarkable.

“I have such great employees,” Shiver said. “It shows the dedication of all of us, including myself, to make sure Maggie Valley and Ghost Town in the Sky and all that goes with it survives. I am very humbled by their support and continued efforts.”

While Shiver never suggested employees would be volunteering their time in exchange for no pay, that was certainly in the back of their minds, Aldridge said.

“We were asked if we were willing to take half our paychecks now and half later,” Aldridge said. “Nobody ever agreed to not get paid. Everybody expected to get their last paycheck.”

The paychecks haven’t been forthcoming yet, but Aldridge said he isn’t mad. He said most employees understand and care deeply about the park and want to help it succeed. Aldridge said Shiver was a good leader and an inspiration for employees.

“He was out there working every day as hard as everybody else. He was trying to do all he could to keep Ghost Town going,” Aldridge said.

Shiver has exemplified the all-hands-on-deck attitude that allowed Ghost Town to make it through the year.

“I bussed tables, I swept floors, I blew leaves off the streets to make sure our guests could enjoy themselves,” Shiver said.

Not all employees were at the meeting when Shiver leveled with the state and the informal vote was held, however. The meeting was billed as a non-mandatory staff meeting and the topic wasn’t shared in advance, so Ron Coates, a worker who lives in Hot Springs, opted not to make the hour-long drive on his day off to attend.

No one in management ever told him what had transpired or warned him that he may not be paid if he kept working.

“Nobody ever said we might not get paid,” Coates said.

Coates has filed a claim with the bankruptcy court for $386 after being told by the state Labor Department that was his only recourse.

Meanwhile, water to the amusement park has been shut off due to failure to pay bills, according to the Maggie Valley Sanitary District.

In tough times, local company looks to expand

In yet another piece of positive economic news, Waynesville-based Haywood Vocational Opportunities announced a proposed expansion that would create at least 50 new jobs.

HVO, which makes disposable medical supplies, plans to pay $400,000 for 10 acres at the Beaverdam Industrial Park in the eastern end of Haywood County and spend more than $1 million to construct a 40,000-square-foot building on the site.

The county recently spent $700,000 to grade the industrial site, and therefore is selling it at a loss. That’s just the nature of the business, said county Economic Development Director Mark Clasby. Grading industrial sites to ready them for building is one way to lure companies.

“That’s part of the economic development incentive, to work with existing businesses to retain them, or in this case, expand. That’s even better — it’s an investment in jobs for the future,” Clasby said.

HVO’s proposal has been OK’d by the Economic Development Commission, and is now awaiting final approval by county commissioners.

The company currently employs 315 full-time workers at its factory in the Hazelwood community. It also runs an employment and training program, which enrolls 120 people. The company operates under a unique business model — about 25 percent of its employee base at any given time has a disabling physical or mental condition that is a barrier to employment.

HVO has maintained a rapid rate of growth at a time when many businesses are struggling with the economic recession. The company moved into its current headquarters in 2005 and is already looking to expand. It added 72 new jobs in the last 18 months, mostly hourly positions, according to HVO President George Marshall. HVO is forecasting continued growth over the next 24 to 36 months.

“We have emerging business that, right now, I can’t comment on,” said Marshall.

The company plans to add 50 new jobs over that time period that will range from machine operators to assemblers. That’s apart from the jobs directly linked to construction of the building.

HVO makes a niche product that isn’t easily outsourced, which has helped it to weather the economic downturn.

“Basically, we’re in a real specialty market as it relates to healthcare,” Marshall said. “We produce custom surgical products for the healthcare industry, which, generally speaking, has not been able to be taken offshore. As commodity products have moved, this was one element that really could not practically, nor economically, be moved.”

HVO has developed a huge market for its products.

“Our customers are throughout the U.S. and international,” Marshall said. About 30 percent of HVO’s business is outside the country, including clients in Sydney.

Marshall said that HVO will aim to complete its new facility at the industrial park by the end of 2009.

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