Instead of the 94 aircraft the company expected to produce this year, it now plans to assemble just 73, spokesman Robert Baugniet says. For each aircraft it makes, Gulfstream brings through the port two engines and a tail section from Europe. So this year, the company will import 42 fewer engines and 21 fewer tails than it expected just a few months ago.
Gulfstream recently announced layoffs of 1,200 workers as well as plans to shutter a local plant for five weeks beginning in July, idling an additional 1,500 employees.
The recession also has hammered Atlanta-based Havertys Furniture, which should be accustomed to hard times. It conducted its initial public offering in October 1929, just before the stock market crashed.
The past several years, Havertys has sharply increased the quantities of dining room and bedroom sets from China, Vietnam and Indonesia it brings through Savannah. The port is its principal East Coast gateway for supplying consumers in 17 states.
"Our business has been affected. Our shipments are down. We're controlling our inventory," says Steve Burdette, 47, Havertys executive vice president of stores.
As deliveries slid, the company, which began life in the 19th century delivering goods on horse-drawn wagons, reined in expenses. Fewer boxes to load meant pink slips for more than half of the company's 1,170 warehouse and delivery personnel, according to filings with the Securities and Exchange Commission.
The big question
One measure of trade activity is the Baltic Dry Index, which measures the cost of shipping commodities. It hit an all-time high of 11,793 on May 20 before plummeting to 663 on Dec. 5 — a drop of more than 94%. The index has rebounded a bit from that historic low but remains more than 85% below its zenith.
As trade sags, pressure to cut costs ripples through the entire economic chain. Shipping lines that are slashing rates in the face of evaporating transoceanic demand are pressuring terminal operators to cut their fees.
Seattle-based SSA Marine, for example, provides the stevedores who choreograph the work of longshoring crews and manage other terminal operations in Savannah. The bulk of SSA Marine's costs are labor rates, which are fixed by its contract with the International Longshoremen's Association. "So we have to reduce our indirect costs or take it out of profits, and profits are thin to begin with in our industry. We're looking at cost savings everywhere we can," says Jake Coakley, the company's regional vice president.
That's meant tightening up on the use of company vehicles and equipment such as printers, even eliminating bottled water. Coakley didn't replace a couple of people who left, spreading their responsibilities among the remaining staff. When he found out the satellite dish on the roof of the company's new building was for a $75-a-month service that provided Muzak to callers waiting on hold, he axed it.
The big question is whether the current downturn reflects a temporary dip in a long-term trend of ever-increasing trade or a fundamental break with a hyperconsumption era fueled by cheap credit. Savannah prospered thanks to its big bet on big retailers from Wal-Mart to Ikea.