With a history going back to 1881, the
On its website, the family-owned company boasts of having invented the laminated butcher block and that its products grace the Getty Museum in Los Angeles and the Waldorf-Astoria in New York. And yet by early July it will be shutting its Petoskey factory and cutting loose all 56 workers at one of the few year-round businesses in the Lake Michigan tourist town.
The economic carnage caused by the coronavirus outbreak has torn through Michigan Maple’s already slim profit margins and made it impossible to continue as a viable business, company President Ann Dau Conway said in a letter to staff. “My family has operated Michigan Maple Block through many adverse economic time periods including two world wars, the Great Depression, and multiple recessions. I am saddened that the mounting challenges the business faces today have compelled us to close the Company,” she wrote.
In an American economy negotiating a downturn that is already being likened to the
Yet what’s happening to Michigan Maple points to a worrying trend emerging from the stacks of layoff notices filed by businesses in California, Florida, and New York, where service industries have been hammered by lockdown orders, as well as politically important swing states such as Michigan and Ohio, where key industries such as steel and autos already faced headwinds going into 2020. Plenty of layoffs that just a month ago were labeled “temporary” are now tagged “indefinite” or “permanent.” Alongside announcements of sweeping staff cuts by major employers such as
The new permanent layoffs are hitting a wide swath of the economy both geographically and sectorally.
You can see it in Ferndale, Wash., where aluminum giant
In Beallsville, Ohio, American Energy Corp., a subsidiary of
In such industries as aviation, companies large and small are resorting to permanent layoffs. On April 29, Boeing announced it will
In steel, an industry at the
But Nucor and Steel Dynamics rely on so-called minimills that are generally more efficient and less labor-intensive than old-style blast furnaces. U.S. Steel,
Bruce Montagazzi, head of Local 9305 of the United Steelworkers union, was one of 210 people laid off at a
You can also find signs of what the future will look like in automakers’ supply chains. Even as assembly lines
Forecasts that at the beginning of this year called for more than 16 million cars to be sold in the U.S. now predict sales of 11 million to 12 million, Zbiegien says. The result: Aludyne is permanently saying goodbye to about 250 employees at two locations in Michigan and a foundry in Columbus, Ga. “Right now we have no manufacturing going on in the U.S.,” she says. “We really want to make sure we get as many people back as we can. But it’s tough.”
The turmoil has consequences beyond business. Even though the U.S. economy just came off a record-long expansion, poverty has become more rather than less concentrated, according to a May 5 report from the Economic Innovation Group. Researchers at the Washington, D.C., think tank found that the country’s poor have become increasingly clustered—trapped may be a better word—in urban neighborhoods, a trend that may not soon reverse. “With another downturn now wreaking havoc on lower-wage industries, it seems certain that the number of individuals below the poverty line will climb again and consequently expand the universe of high-poverty neighborhoods,” the EIG report’s authors wrote.
In Petoskey, the news of Michigan Maple’s closure came just ahead of a summer season that would normally start with the Memorial Day holiday at the end of this month. Town officials are trying to look ahead and figure out how to cope safely with the influx of visitors. One way is to ask out-of-town visitors to bring a 14-day supply of food with them so that they can quarantine when they arrive—which does not bode well for restaurants and other enterprises that rely on these customers for a significant portion of their annual revenue.
While the local economy may manage to shake off the effects of any public health ordinances, the town’s managers worry more about the lasting scars that the loss of a year-round employer like Michigan Maple will leave behind. “It’s just disheartening to the community to lose an established 139-year-old business that has supported a lot of families,” says John Murphy, Petoskey’s mayor. “It brings it home when you look at the families affected.”
(Updates with new data for Uber and Airbnb in the seventh paragraph.)
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