Signs of hope persist amid losses, cutbacks
07/23/2008 12:00 AM
07/23/2008 12:05 AM
Anybody remember when we were hot stuff?
Sweet Charlotte, darling of the Sun Belt, belle of the New South.
Booming business, exponential growth, civic pride, soaring skyline, surging real estate.
Cinderella, your pumpkin is ready.
Here's how whack it gets: At Bank of America, our corporate flagship, earnings tank 40 percent and it's high-fives all around. Experts thought it would be worse. Par-tee!
Next comes the Wachovia punch. It manages to lose nearly $9 billion in one quarter. Three months. That makes General Motors look like a growth opportunity.
And then there's US Airways, operator of our beloved hub. Fuel prices have helped it lose something in the neighborhood of $570 million since winter. And that's with the you-pack, you-pay luggage assessment.
Anybody remember when companies in this town made money?
Now, I couldn't run a vacation Bible school much less a fancy corporation, but trust me here: This isn't good.
This isn't good because to get right with the balance sheet, Wachovia needs to shed thousands of jobs.
This isn't good because an ailing Bank of America is to Charlotte what cardiac arrest is to you.
This isn't good because US Airways' biggest hub is here and if the airline goes on a diet, we get skinny.
And most of all, this isn't good because there's no end in sight.
Oh, foo, say some. Here in Charlotte, we've got a diversified economy, a talented workforce and … oh, I don't know, maybe year-round golf.
True, but that's not insulating us from the nation's economic misery.
It's six months and two days till Christmas and here's what we don't have to look forward to by then: Job growth, housing expansion, rising salaries or business stability.
Much of this mess is from forces beyond our immediate control: International competition, oil prices, a fading manufacturing base, a long-needed correction in the housing market and a $2 billion-a-week war.
But at the risk of passing up this premium opportunity for pessimism, I offer a few meager signs of hope.
First, you have to like this new guy at Wachovia. Bob Steel comes in and says, yep, things are miserable here and I won't make excuses. We've flubbed and we'll fix it. Let's get on with it.
Likewise, BofA is sending signals it may be leveling off. Let's hope so.
And US Airways has proven resilient in turbulence before. Don't bet against them.
Besides, good things can come of bad times.
Our banks fell into a giddy spending spree that seems reckless in hindsight. They blundered into the credit crisis, blinded by easy money. They snatched for the honey and ignored the bees.
When the stinging is over, they'll be stronger for it. Their days of competing with Fast Al's Car Loan, “no credit, no problem,” are done. Financial sanity shall regain its throne. They'll be smaller and stingier, but solid again.
They'll be – in short – like you remember them, back when we were hot stuff.
About Mark Washburn
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