from September 2015, Economics
For those asleep during the summer, it is time to wake up and take notice that another business is closing its doors in Klamath Falls. If JELD-WEN officially moving its headquarters to Charlotte, NC for a more business friendly environment wasn’t enough, now Haggen is closing its two stores in town. What? Haggen, when did they come to Klamath Falls?
Earlier this year Safeway and Albertsons merged into one company. The merger was approved by the FTC only if they would sell off 146 of their combined stores. Haggen won that bid to purchase those stores and went from an 18 chain grocery store to 164 overnight. Talk about a growth spurt. In Klamath Falls both Safeway locations were converted into Haggen stores. However, within months of Haggen’s acquisition, Haggen was losing money — and a lot of it. Haggen needed to borrow $25 million to weather their cash flow problems, which increased their total debt to $270 million. Did Haggen bite off more than it could chew?
What Went Wrong
After Haggen took control of their new stores, Haggen immediately incurred losses in several of those stores. Local customers either did not know the brand Haggen or thought it was too pricey compared to the previous occupant. There was an error assuming business would continue as usual. Clearly this was not the case everywhere. An outside consulting firm was brought in to do some analysis. They found stores fell into two groups: core and non-core. Core stores were profitable. Non-core stores were losing money. The non-core store loses occurred because of either a lack of traffic (revenue) or they were too costly to support. Some non-core stores were also in remote locations where Haggen did not have efficient distribution. The Klamath Falls stores most likely fell into both categories and easily made it to the Haggen chopping block.
Most of our local leaders, and many of our State officials, are leftists. I use that label not to ridicule, mock or scorn them. I call them leftists because it is an accurate description. When it comes to political leadership there are only two camps: left and right. However, some may claim to be neither left or right but “moderate” (aka reasonable). Yet, a better way to describe moderates are those who sit on the fence until the political winds blow strong enough in a particular direction and then rush to the front of the line to “lead the charge”. Moderates are not moderate, they are populists. And being a populist is not leadership.
Left or Right. Socialist or Conservative. Our leaders are one or the other. If they claim to be moderate, then they are really socialists because they have no back-bone or spine to stand for anything that may appear harsh or uncompassionate towards the poor and less fortunate. Therefore these moderate-populists vote for more money to fund government programs and enable more money and benefits for public union government employees. A populist’s direction always leans the same way as a socialist’s. Populists may be slower in implementing socialist plans but make no mistake the only difference is speed, not direction.
So what does any of this have to do about JELD-WEN? Everything.
I just described the climate in Klamath and in Oregon. Socialists (socialist policies) are ruling the roost. Local county and State governments are growing everywhere and contracting no where. More taxes, more programs and more welfare (farm, corporate and personal). Utopia is just around the corner, but to get there the socialist idea says we must give more our wealth to a benevolent group of government lawmakers and bureaucrats. Only they can protect us from our selfish selves and lead us to nirvana.