No WhiteWash!

Tennessee’s exports have grown substantially over the past few years, but where do they come from? Do those exports come from all parts of the state, or are they concentrated in certain regions? We can examine this question by looking at the size and composition of the foreign sales that come from each of Tennessee’s MSAs (metropolitan statistical areas). An MSA is composed of a major urban area: the central city and the counties that are economically connected to it. Tennessee has 10 MSAs. How are the state’s exports spread among these MSAs?

To begin, most Tennessee MSAs export more, absolutely and relatively, than they did 10 years ago. All the state’s MSAs have risen in the export rankings of American MSAs over that period, with the single exception of Johnson City. And this is a statistical illusion because the Tri-Cities region of East Tennessee was separated into two MSAs in the interim.

Wait, there is much more to see.  Click here to see the full report

 Domtar Corporation (NYSE/TSX: UFS) announced today that it will idle its Dryden, Ontario pulp making facility for approximately ten weeks, effective April 25, 2009. This decision was taken in response to continued weak global demand for pulp and the need to manage inventory levels.

Domtar will also idle its Ear Falls, Ontario sawmill for approximately seven weeks, effective April 10, 2009. North American lumber market conditions require that this temporary curtailment be taken at this time.

These temporary measures will affect approximately 500 people employed at the pulp mill, sawmill and related forestland operations.

It appears that moving the “Family Race Night” from Kingsport to the Bristol, TN race track was a success.

BRISTOL, Tenn. – By most accounts, Bristol Motor Speedway succeeded Friday in giving race fans a better chance to commune with their NASCAR heroes through a relocated and revamped Food City Race Night.

“This is unprecedented,” said Joe LaPointe, a resident of Detroit making his 10th visit to BMS. “To be this close to the drivers – this has never happened, and it certainly doesn’t work this way at other NASCAR tracks.”

Read more via NASCAR Followers Get Close to Drivers at Family Race Night | TriCities.

The latest amounts of potentially toxic material released from businesses and power plants in communities throughout Tennessee and the nation has been made available by the EPA.

The 2007 information that was just made public can be looked up within a zip code, county or state on the U.S. Environmental Protection Agency’s website.

The top 10 counties listed below have the largest “Total on and off site disposal or other releases”

The breakdown of Sullivan County, TN Toxic Chemical Release for 2007 by companies is below.  Eastman and Domtar are the largest contributors of Toxic Releases in Sullivan County.  Both of these two firms are located in Kingsport, TN

The City of Kingsport for the last few years have been telling the citizens how great things are going in Kingsport.

The City of Kingsport is fortunate to have Eastman, the largest employer in Tennessee, located in Kingsport.  Having a large employer is great for the revenue that it brings the city, but it also allows the city to become complacent.

In the table below you can compare Johnson City, Kingsport, and Bristol retail sales growth from years 2000-2008.  Johnson City has led the Tri-City area with the best growth with Bristol’s growth coming in second.

It should be pointed out that Kingsport in the last 7 quarters has only had two quarters that have been positive growth when you compare the same quarter against the same quarter the previous year.  The two positive retail sales growth quarters can be attributed to new store openings.  While it may look like it good growth, one needs to keep in mind that this is incremental growth.  The real challenge will be whether Kingsport can keep up this growth given the unemployment situation in Kingsport and  another real question is how much money can you get the citizens to give up in a bad economy?

Bristol’s growth mostly started in year 2004 and then took a nose dive in 2008.  Most of that growth could be attributed to Exit 7 stores, but the Exit 7 stores have taken a beating and many have closed.

Kingsport was fat and happy with Eastman and Sam’s Club.  But when Sam’s Club decided they would close and move to Johnson City and Bristol, then Kingsport had negative growth in the year 2007.

One can say that Kingsport has had growth, so what’s the big deal.  Read more on this below.

The retail sales data is from the following link.  Tri-Cities Retail Sales Report

Using the Kingsport retail sales dollars and applying the yearly inflation percent tells a different story.  Note the “% Growth after Inflation” column below in orange tells a different story.  The year 2003 had a positive growth of 2.53% after inflation was applied.

One can say that the retail sales for Kingsport in 2001 actually meant more for the city in buying power than the current retail sales numbers.

The graph below needs no explaining and one can see that Kingsport is not as progressive as we are led to believe.

In the City of Kingsport city population table below it shows that the % growth from 2000 to 2007 resulted in a negative growth (-1.6%), while Johnson City had the best growth of 8.2%.  Morristown growth was 4.2%.  Bristol and Greeneville both had 0.3% growth.

Sullivan County growth is static and Kingsport is even more dismal.  Even with Kingsport going the route of captured growth through forced annexations, they cannot even keep up with the death rate.

City Population Table

Kingsport has led the Tri-Cites area with the highest unemployment rate of 10.5 percent for January, 2009.  For well over a year, Kingsport has been running a higher unemployment rate which cannot be blamed solely on Eastman.

Kingsport’s unemployment rate is likely to rise even more as the full impact of the Eastman layoffs kick in.

The sad news is that as these unemployed folks look for employment to support their families, they may be forced to move out of Kingsport to take jobs elsewhere.

To view Tennessee unemployment for January, 2009, go to Labor Force Estimates

Above is the data with no spin on the data.  It is up to you to decide if Kingsport is going in the right direction.  One needs to look at who is in charge of the Kingsport government for the periods above.  Will investing in more retail or hospitality type businesses bring good paying jobs for the citizen?  What is the city doing to help the citizens?  To me it seems that the city is only looking out for itself.  I also feel that if you can get the citizens to succeed, then the city will prosper.

I am sure the Kingsport will say that they are addressing the problem with the higher education center.  But what effort is underway to get employers to locate here with jobs to handle the thousands of students that complete their training.  My guess would be that these students will have to leave the area to find good jobs.

Based on the above data, do you feel that Kingsport is as progressive as they claim to be?  Feel free to comment.

Eastman Chemical is the largest employer in Tennessee and has just announced that they are cutting another $100 million in costs.

Eastman Chemical announced on December 17, 2008, that they were going to reduce 2009 costs in excess of $100 million, of which $80 million would come from labor-related costs. One of the items included in these cost reductions was no 2009 wage and salary increases.

KINGSPORT, Tenn., March 9, 2009 – Eastman Chemical Company (NYSE:EMN) today announced it is taking additional actions to further reduce costs by more than $100 million in response to the ongoing global economic recession. These actions, in addition to those announced in December, increase Eastman’s expected total cost savings in 2009 to more than $200 million. Eastman is taking the following actions to achieve these savings:

• Reducing base pay for U.S. employees by 5 percent effective March 30, 2009, with equivalent cost reductions in bargaining unit sites and locations outside the U.S.
• Implementing a global targeted reduction in force of between 200-300 employees within the next 4-6 weeks
• Reducing non-critical maintenance costs
• Reducing logistics costs
• Further reducing discretionary spending

“The severity of the current economic environment led to the actions we are announcing today,” said Brian Ferguson, chairman and CEO. “Despite our expectation that sales volume will continue to be at depressed levels, we remain committed to taking the necessary actions to deliver solid operating cash flow in 2009 that will more than support both our dividend and capital expenditures.”

In addition to taking actions to reduce costs, the company lowered its budgeted 2009 capital expenditures to between $300 and $350 million. The company also expects to generate approximately $100 million of cash from working capital in 2009, assuming continued difficult economic conditions and raw material and energy costs similar to current levels.

Commenting on the outlook for full-year 2009 earnings, Ferguson said, “While visibility into global demand continues to be limited, the actions we are taking to reduce costs position us to better weather the storm. Assuming a modest improvement in demand that increases our capacity utilization from the current rate of approximately 71 percent to between 75-80 percent for the remainder of the year, we expect our full-year 2009 earnings per share will be between $2.00-$3.00 excluding charges related to cost cutting actions.”

The cost reduction actions announced today will result in a first-quarter 2009 pre-tax restructuring charge of approximately $30 million.

Alderwoman Joh, who is running for re-election made a statement last night at the Kingsport Board of Mayor and Alderman meeting that is not exactly true.

Alderwoman Joh stated that 875 families have moved to Kingsport since July, 2008.  What she did not say is how many families have moved away and that the data included not only Kingsport but the surrounding areas.

I have written posts on this subject before.  See the following link for more information.  East Tennessee city steals data to enhance it’s image

ETSU Bureau of Business and Economic Research has released the fourth quarter 2008 retail sales results for the Tri-Cities area.  You can see the ETSU full report by clicking on the link. Tri-Cities Retail Sales Report

Note the steep inclines in the graph below for Johnson City and Bristol  Kingsport did have growth but not as much as compared to Johnson City and Bristol.  Kingsport is just now picking up the sales that it lost due to Sams Club moving to Johnson City.  From the years 2000-2008, Kingsport increased $219.1 million in sales and Johnson City picked up $466.5 million for the same period.

In the last four years with Dennis Phillips as Mayor, Kingsport has grown less than Johnson City and Bristol in terms of retail sales growth. For the years 2004-2008 Johnson City had $264.2 million, Bristol had $138.5 million and Kingsport had $112.5 million in new retail sales growth.  Clearly, Kingsport has been the laggard in the retail sales for the Tri-Cities area in the last four years.  But, I think Kingsport just might be the biggest spender of taxpayers money in the Tri-Cities area.

Take time to look at the facts and try to understand them and do not take for granted what the Kingsport public relations machine gives you as the gospel.  See the Tri-Cities Retail Sales Report for the data.

THE TRI-CITIES

As expected, the deepening recession overwhelmed the urge to spend during the holiday selling season. During the fourth quarter, dollar sales fell 1.8% in Kingsport, 2.8% in Johnson City, and 7.1% in Bristol. Adjusted for inflation, holiday sales volume decreased 3.1% in Kingsport, 4.2% in Johnson City, and 7.1% in Bristol. In comparison, real sales were down 8.9% in Tennessee and 9.0% in the nation as a whole.

For the year 2008, Kingsport reported the smallest decline in retail activity with a loss of only 0.4% in inflation adjusted sales. Retail volume decreased 3.3% in Johnson City and 7.7% in Bristol. In comparison, real sales were down 6.3% in Tennessee and 3.8% in the United States

THE METROPOLITAN AREAS

During the fourth quarter, dollar sales in the Combined Statistical Area (CSA) declined sharply, falling 7.8% to $1,573 million. Adjusted for inflation, retail volume in the Tri-Cities metro area was a 9.2% below the same period in 2007. Dollar sales and sales volume decreased in all seven metro counties. The smallest loss was reported by Hawkins County, followed by Unicoi, Carter, Washington (TN), Scott, and Washington (VA) counties.

he recession also caused a miserable holiday shopping season in the nation and the state. In the United States, dollar sales decreased 7.6% to $1,094 billion. Adjusted for inflation, real sales were lower by a staggering 9.0%. This marks the fourth decline in a row, after twenty consecutive quarters of real growth during the 2002 to 2007 business expansion. Tennessee suffered a similar retail performance. Dollar sales fell 7.5% to $20.6 billion, and sales volume was 8.9% below 2007 levels. Retail activity has now declined for five consecutive quarters in Tennessee, creating the prospect of a one billion dollar deficit in the state budget.

Looking at the annual data for 2008, the dollar value of retail sales fell only 0.2% in the nation to $4,475 billion. But adjusted for inflation, real sales in the U.S. were down 3.8%, compared to a 1.1% increase in 2007. Retail sales in Tennessee decreased 2.8% to $82.1 billion. Sales volume in the state dropped 6.3%, compared to a 0.6% increase in 2007.

ANALYSIS

There are no surprises in this report. It is now well understood that the nation is in a major recession, and that business conditions will continue to get worse, before they get better. The last time we saw such bitter economic news was the severe recession of 1981 and 1982. It is worth recalling that the federal government under a Republican President and with a Democratic Congress undertook a massive stimulus package of tax cuts and increased spending. They were successful, but in retrospect, they probably should have done more.

The overriding danger in this recession is not its severity, but the meltdown and continuing dysfunction of the financial system. As Ben Bernanke, Chairman of the Federal Reserve, has stressed, there will be no recovery until the financial system is healed. And the last time the financial system collapsed was in the early 1930s, and we know what that led to.

The central bank has been pumping massive amounts of liquidity into the financial system, and the federal government is undertaking the largest fiscal stimulus since the Depression and World War II. But the financial system remains paralyzed and the credit flows necessary for our capitalist economy to function are not being provided.

The economic outlook for the nation and the region depends upon events in the financial system. If there is an early resumption of normal financial operations, business activity would quickly recover. If the financial system continues to malfunction, the recession will last longer, and the ultimate government intervention in the financial system will be more drastic.

With this in mind, if the financial system begins to function normally over the next several weeks, then an end to the recession by late spring or early summer is very probable. Then we can fret over when the recovery will begin and will it be strong or weak. And if we are very lucky, a year from now we will be concerned about tight labor markets and inflation dangers.

The Milken Institute/Greenstreet Real Estate Partners Best Performing Cities Index ranks U.S. metropolitan areas by how well they are creating and sustaining jobs and economic growth.  The components include job, wage and salary and technology growth.  The full report can be downloaded at the following line. 200 Best Performing Cities

The Best Performing Cities ranking depicts those U.S. metropolitan areas that are recording the top economic performance.

Scroll over each state below to see ranked metro areas and click through for details on a specific metro area.

Tennessee metropolitan areas that are in the report are listed in the table below.  Note the change in rank from 2007 to 2008.

The drill-down detail for Kingsport-Bristol-Bristol, TN-VA MSA is listed below.

Overall Rank: 128

MSA Population: 303,686

I have never paid much attention to local politics until I had a need to address a concern that I had. I attended a BMA meeting and was shocked at what transpired at that meeting as City of Kingsport Staff would present issues at the BMA meeting and discussion would follow with the BMA members.

I sat there in amazement at how easily they spent my tax dollars. Some of it was local, State, and Federal tax dollars for projects that do not benefit the majority of the Citizens of Kingsport.

Below, is the results of the last election for the City of Kingsport, TN. The number of people voting in this election has a lot to be desired for a city that has a population about 45,000. In the chart below, Dennis Phillips was elected as Mayor and Marsh, Munsey and Shupe were elected as Alderman. It is quite apparent that people are not getting involved in local politics, but do have an issue with the local politicians when things don’t go their way.

There will be four members of the BMA whose terms expire in June 2009. They are Mayor Phillips, Vice Mayor Ben Mallicote, Alderman Pat Shull, and Alderman Valerie Joh. The position of Mayor and Vice Mayor is for a two-year term and Alderman’s term limit is four years. There are a total of six BMA positions that are determined by local elections. The BMA members choose the position of Vice Mayor. There are a five Alderman, Mayor, and Vice Mayor that make a total of seven votes on the Board of Mayors, and Alderman.

If you are happy with the current direction that the current BMA is going, then that is fine. But, if you have concerns, then you need to get involved and cast your vote.