As the unemployment rate spikes, the economy tumbles into possibly its worst recession in decades and hundreds of thousands of people lose their jobs, some of those displaced workers might find inspiration in a group of managers laid off 16 years ago in the prime of their careers.
In 1992 the Louis Rich turkey-processing plant in Visalia, Calif., was the largest employer in agricultural Tulare County in San Joaquin Valley. Just two-and-a-half years earlier $100 million had been invested in building the plant. So it came as quite a surprise when then-owner Philip Morris shuttered the business, laid off 1,450 workers and retrofitted the plant into a highly automated Kraft Parmesan cheese plant that employs about 80.
The Visalia plant closing could not have come at a worse time, in the middle of the peak layoff years of 1991-93 when 1.7 million U.S. jobs were lost. Fast forward 16 years. This slump may prove worse. Friday, the Labor Department said 240,000 jobs were lost in October and 1.2 million so far in 2008. More bad news is on the way. A Watson Wyatt survey released last month said that a quarter of U.S. employers expect layoffs in the next year. The unemployment rate hit a 14-year high 6.5% in October, and experts say it's heading toward the 7.8% peak in 1992 — maybe the 9.7% rate of 1982.
While devastating at the time, the turkey plant closing "was a good thing that happened," says Pablo Martinez, 55, and now the owner of two busy Mexican restaurants that employ 24. An immigrant from Mexico, Martinez had worked his way up by 1992 to a $40,000-a-year ($61,000 in today's dollars) job as supervisor of the boning department. He is one of 15 former plant managers USA TODAY has been tracking, publishing stories about their plight in 1996 and 2001, other times of economic distress and mounting layoffs. This third look at their progress provides potential encouragement for the hundreds of thousands of Americans now getting pink slips.
The economy has turned down again, but the lives of the former plant managers in Visalia indicate, anecdotally, that those who lose jobs in recessions can land on their feet, and even thrive. They say being jobless can steel and motivate people to work long and hard hours, teach them to be self-reliant and to distrust safety nets, and to spur them into fields they are passionate about. The result, at least in this instance, is success and contentment, financially and otherwise.
2 stories come to untimely ends
Two of the 15 managers have died. First was Dan Bonnett, who soon after the layoff landed a job as manager of Price/Costco meats, doubling what he made at Louis Rich to more than $90,000 ($137,000 today) a year. In 1996 he told USA TODAY he was the most fortunate among his colleagues. He died of heart failure in 1998 at age 49.
Production manager Mike Neff had diabetes and said the stress of the layoff made it worse by raising his blood pressure. By 1996 he was nearly blind, but he had started a business in ostrich, emu and rhea slaughtering, which turned unsuccessful.
When last interviewed in early 2001, Neff was awaiting a kidney and pancreas transplant while completing his master's degree in animal science at California Polytechnic State University. He was applying to law schools and said he planned to represent food companies before the Food and Drug Administration. He died shortly before Sept. 11, 2001, in a San Luis Obispo hospital at age 36.
"Layoffs … are always going to happen," he said in 2001. "You can move on or sit and wallow."
The other 13 managers are now mostly in their late 40s to early 60s. They worry, like many others of their generation, about the affordability of retirement. Overall, they agree that losing their jobs was gut wrenching, but a blessing.
"I'm not going to say it wasn't a painful transition," says then-materials manager Steve Koch, now 49, who complained so much after he bought a Baskin-Robbins franchise that his wife enrolled him in law school. He always wanted to attend, but it was Karen who got fed up, filled out the paperwork, and told him to "either go or be quiet."
His income has since reached personal highs, and he says he's still only beginning to build his practice. As it happens, he specializes in creditor's rights, bankruptcy law and debt collection. "You look back, and it's been worth it," says Koch, whose only regret was delaying his return to school.
A boy's dream fulfilled
Sam Logan, now 63, was the plant's industrial engineering manager. He has fulfilled his dream of becoming a stockbroker and is now a Merrill Lynch assistant vice president with three assistants.
Logan says his career before the layoff required his family to relocate to a new city every four to six years. He's been a fixture in Visalia since 1989 where he served on the planning commission and ran a losing bid in an eight-way race for the Visalia city council in 2005. He took a 60% pay cut to become a stockbroker, and it took four years of long hours to regain his $60,000 ($91,000 today) salary of 1992. Stress is a part of any job. The recent massive volatility in the stock market is unnerving, but so was turning 23,000 live birds a day into hot dogs and sandwich meat, Logan says.
Logan had two children in college when he lost his job. His son, Sam, now 38, is "pretty much a genius" and was attending Stanford when he was overtaken by schizophrenia. His parents say they feel rewarded when he smiles. Daughter Jennifer Ann, 35, has a Ph.D. in music and a black belt in martial arts. She breaks boards with her hands.
Project manager Mike Wilson, now 63, went into business restoring Jaguars and other collectible cars. The business has grown to 10 employees, who work on restorations that can cost $125,000 each. Wilson's cars have an international reputation for winning first in class at car shows. He says business is steady through economic downturns because the movers and shakers have more time to play with their cars. He says he would expand if he could find enough qualified workers.
People mistakenly believe that there is more security in a corporate job, Wilson says. While entrepreneurs need to please 95% of their customers to be successful, all it takes to lose a corporate job is to make your boss unhappy, he says.
'No regrets at all'
Special projects manager Randy Claussen, now 56, went into computer sales and repairs. He says he was successful from the start. When profit margins in the original business dried up, his company also became an Internet service provider.
Engineering manager Ron Davis, now 74, owned a coin-operated laundry until 1998. A few years after his first wife, Arlene, died, he married her longtime friend Barbara and moved to Dallas where he says he is happily retired. He is active in his church and volunteers with Meals on Wheels and recently traveled to El Salvador and China. "No regrets at all, life is good," Davis says.
Meanwhile, Martinez says that in the first months after opening his first restaurant he often operated on three or four hours of sleep a night trying to keep his business alive. While he still puts in long days, success has afforded him international vacations and time to play goalie on a co-ed soccer team with his 34-year-old daughter.
His El Rosal restaurant has been regularly voted by readers of the Visalia Times-Delta (which is owned by Gannett, publisher of USA TODAY) to have the city's best Mexican cuisine. The first location was successful enough that in 1996 Martinez opened a second restaurant 4 miles away. Sales have slid 7% over the last two months as economic worries cause people to eat out less, Martinez says.
An entrepreneurial spirit
The Louis Rich plant manager in 1992 was Dexter Bennett, now 62. He had gastric-bypass surgery a year ago and the 6-foot-4 Bennett has seen his weight fall from 375 pounds to 222. He had job offers from other plants after the layoff, but he didn't want to move his family again. He opened a nuts and bolts business in Fresno called Frontier Fasteners with his wife, Karen. They did well, soon surpassing the $125,000 ($190,000 today) a year he made running the plant.
But the 45-mile commute each way, seven days a week, to Fresno from Visalia proved to be a hardship, and he says he "nitpicked" Karen to the verge of a divorce. He does not recommend mixing marriage with business, and they sold out at a nice profit and are still together.
Dexter retired for a time before taking a job as a $55,000-a-year inspector for the Tulare County weights and measures, primarily to get health insurance until he is 65.
A lot of lives turned fruitful after the plant closing. Why? Car-restorer Wilson says Bennett can take some credit because he hired people who had an entrepreneurial spirit. While that sometimes created a "dysfunctional family" atmosphere at the plant, it helps explain why everyone landed on their feet and thrived, Wilson says. "We took a chance on people with a lot of energy," Bennett says.
Another lesson from these former managers is that wives can be a critical safety net. When their husbands lost jobs, many jump-started careers that have since turned successful. Stockbroker Logan's wife, Marie, was a substitute teacher in 1992. She began teaching full time, earned a master's degree in special education, and is now a Tulare County preschool resource specialist.
Martinez says his restaurant never would have succeeded at the beginning without the help of his wife, Maria, who worked 12-hour days before going home to take care of the family while Pablo stayed for another four hours or more. Those were not happy times, Pablo says, but daughter Marsela has grown up and runs the new restaurant with Maria.
Before Karen Koch nudged her husband into law school, she had become a full-time dental assistant to make ends meet. She now teaches microbiology of periodontal disease at San Joaquin Valley College.
It's turned into a remarkably uplifting story, Bennett says, and he's proud of his wife, Karen, who became a deputy sheriff at 59, passing a physical test that included push-ups and a 1.5-mile run.
"Right now she's guarding a prisoner at a hospital here in town," Bennett says.
Contributing: Tom Ankner