Closure wont be big jolt for state
Experts: Economy will suffer a bruise but not a knockout
Oregon's sluggish economy will miss a beat, economists say, but is unlikely to suffer serious long-term consequences from the sudden shutdown of Consolidated Freightways Corp., one of the region's largest employers.
CF, the Vancouver, Wash., company that got its start in Portland in 1929, filed for Chapter 11 bankruptcy this week. It will lay off 15,500 workers across the country, including about 950 in the Portland-Vancouver area.
'We believe the transportation sector will improve when wholesale trade improves and when the lumber and wood (sectors) improve,' said Dae Baek, senior economist with the state's Office of Economic Analysis in Salem.
The wholesale sector should see some improvement by the end of the year, when retailers restock shelves in anticipation of year-end sales, Baek said.
State economist Tom Potiowsky conceded that Clark County's economy would be hurt by the closure. But for Oregon, he said, the shutdown will slow the economy somewhat, but not by much.
'There will be a drop in employment, but not by a huge amount because (workers) will assimilate in other businesses,' he said.
Portland economist John Mitchell said Consolidated Freightway's 'shocking announcement,' along with weaknesses in the tech sector and trucking industry, will mean 'a very slow upturn' for the state.
Earlier this week, a statement by CF Chief Executive Officer John Brincko said the nation's third-largest trucking firm was unable to obtain enough financing to stay in business.
Employees found out about the shutdown on Labor Day. They were told to call a toll-free number that connected them to a recorded message from Brincko telling them not to return to work.
Drivers and freight handlers were immediately affected, said company spokesman Mike Brown. Managers will continue working while the company liquidates, he said.
'We're a company that has been losing money over six or seven successive quarters,' Brown said of the abrupt bankruptcy and planned liquidation.
Some deliveries stalled
CF is working with other trucking companies to make deliveries that are stalled or stranded because its trucks are no longer running.
'In some locations around our system, smaller customers have been invited to pick up their own freight,' Brown said. 'But that's only a small percentage. We are going to (call) other carriers, but it hasn't developed into a full-scale plan yet.'
One local competitor, USF Reddaway Inc. in Clackamas, is 'getting our share' of CF business, said President and CEO Jared McArthur. Reddaway operates in nine Western states.
Though he wouldn't say how much CF business his company has absorbed, USF Reddaway began taking over the shipments Tuesday, the day after the announcement.
The shutdown caught the industry off guard, and 'fills the pipeline for other carriers,' McArthur said.
Consolidated Freightway drivers probably won't have a hard time finding new jobs, though other employees might, said John Sallak, director of safety and training for the Oregon Trucking Association, a trade group.
'We've seen a gradual increase in the demand for drivers over the last few months, so there will be a place for those drivers to go,' he said. 'With the experience and reputation of CF, those drivers should look pretty valuable to other companies.'
Drivers look ahead
The shutdown was a surprise for CF drivers, some of whom belonged to Teamsters Local 81, said Harold MacKenzie, secretary/ treasurer and executive for the local, which had more than 170 laid off from CF.
MacKenzie said severance for the laid-off workers is uncertain. 'They haven't received their final checks yet,' he said. The union is helping them look for new jobs, he added.
'There are other jobs in the union, jobs in the trucking industry and warehousing,' he said. 'This is the time of year the trucking industry picks up.'
Consolidated Freightways' woes are not affecting CNF Inc., a Palo Alto, Calif.,-based global supply chain that was spun off from CF in 1996 and still has offices in Northwest Portland, a CNF spokeswoman said.
Potiowsky, the state economist, put an optimistic spin on CF's difficulties.
'The company might come back as a full operation if somebody buys it at a bargain-basement price,' he said.
Kristina Brenneman and
Andy Giegerich also contributed to this report.