Mike Nowatzki, Published November 30 2008
Economic pain more like a pinch in F-M
“Overall, I would say the attitude of … the primary sector would be that their businesses are for the most part doing fairly well, that many have not had layoffs but have not replaced people that have left, either,” said Brian Walters, president of the Greater Fargo Moorhead Economic Development Corp.
Primary-sector businesses are those that sell goods and services nationally and internationally, which injects outside money into the local economy, Walters said.
Microsoft, the metro’s largest such employer with more than 1,000 employees and 500 vendor personnel, is moving “full-speed ahead” with an expansion project on its Fargo campus, spokeswoman Katie Hasbargen said. As of last week, the campus had 13 job openings.
“There’s probably been a little more scrutiny from a recruiting perspective, but we are still hiring,” she said.
The company continues to add customers, she said.
“As a matter of fact, in this day and age, we’re seeing a resurgence of customers who are coming to us looking to buy our solutions, because they’ll help save them money and run their businesses more effectively,” she said. “So, there’s a flipside to the downturn, as well.”
The Case New Holland manufacturing plant in Fargo also continues to see strong demand for its four-wheel-drive tractors, both domestically and in the former Soviet Republic, said plant manager Erik Olson.
The plant, which employs 890 workers, has added about 250 in the past year and has no plans for permanent layoffs at this time, he said.
“Right now, the way we balance our business here is we try to strategically hire, schedule overtime, set line rates so that we avoid the pain of having to do permanent layoffs,” he said.
Weakening demand for construction equipment recently led CNH to announce a shutdown of production at its skid-steer loader plant in Wichita, Kan., for all of December and part of January, according to The Wichita Eagle.
West Fargo-based Bobcat, which also makes skid-steer loaders, also plans to suspend work at its plants in Gwinner and Bismarck for six weeks starting in mid-December. Last week, a union official at the Bismarck plant said the company had asked 150 workers to take early retirement, The Associated Press reported.
The Fargo CNH plant, which makes wheel loaders, has been able to use the farm equipment side of its business to absorb fallout on the construction side, Olson said.
Like its competitors, the plant can idle an assembly line for days or weeks at a time if necessary, he said.
“On the construction equipment side of the business, we may have to do that in the near future,” he said.
The U.S. Bank Service Center in southwest Fargo, which employs about 1,100 people, also isn’t in a layoff situation despite massive cuts among other financial sector companies such as Citigroup.
“We’re not hiring to expand or anything, but we’re filling openings,” said Ron Robson, U.S. Bank regional president.
Still, Fargo isn’t immune to the downturn, and the bank has seen some customers pull back, Robson said.
“You’re just seeing some cautious decisions being made, and maybe some cost reductions and things of that nature within companies to position themselves better to survive in down times,” he said.
One indicator of how the sluggish economy has hit home: The development corporation hasn’t received an application since July for its PACE loan program, which businesses use to help finance equipment and real estate purchases, Walters said.
“So, capital spending is down, and capital spending drives employment for companies as they build buildings and buy equipment,” he said.
The nation’s housing sector troubles have “certainly affected our overall business” at Integrity Windows and Doors, “especially around the new construction side of it,” spokesman John Kirchner said.
The Fargo plant employs about 500 people, and the company hasn’t cut workers or reduced hours yet, Kirchner said. The plant also is still hiring for select replacement positions, he said.
“We’re just running as lean as we can,” he said, adding that the company is trying to save costs in everything it does, from less waste in the manufacturing process to more efficient product delivery.
Noridian Administrative Services reorganized in the past year, but that was because of potential changes to its workload, not the economic slowdown, spokeswoman Denise Kolpack said.
In May, Noridian, which employs about 1,000 people in Fargo, was denied a
$150 million, five-year bid to provide Medicare administrative services in four states. Noridian appealed, and the contract has since been reopened for bids, Kolpack said.
The reorganization primarily affected employee counts at non-Fargo Noridian locations, she said.
Walters said the Bobcat buyouts and an announcement in October by Integreon Managed Solutions that it would lay off 65 workers in Fargo are the only two significant work force cuts he’s seen locally since the national economy took a nose dive.
Because of the diverse makeup of the metro area’s primary-sector employers, the local economy hasn’t been hit as hard as other areas of the country, he said.
“I would say, relative to national standards, we’re in a great position right now,” he said.
Readers can reach Forum reporter Mike Nowatzki at (701) 241-5528