BUSINESS PULSE
NOVEMBER/DECEMBER 2020
THE PULSE OF WHATCOM COUNTY
When there is nowhere to pivot A story of faith, creativity and optimism in challenging times Richard Johnson, owner Bellair Charters & Airporter
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Bellingham Airport recovery remains up in the air New Larson Gross CEO Kelli Visser embraces growth, change Ready yourself for the end of the PPP waiting period Business Pulse magazine 2423 E Bakerview Road Bellingham, WA 98226
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BUSINESSPULSE.COM | NOV/DEC 2020
PULSE B
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VOL. 45 | NO. 6
PUBLISHER Tony Larson EDITOR Matthew Anderson CONTRIBUTING Cheryl Stritzel McCarthy WRITERS Mike McKenzie Dustin McKissen Mary Louise Van Dyke GUEST Dick Donahue COLUMNISTS Julie Hawkes Kris Johnson Fred Likkel Camille Koppenberg Jim McKinney Patti Rowlson Tanya Silves ART DIRECTOR Whitney Pearce PHOTOGRAPHY Tiffany Brooks CUSTOMER SERVICE Ashley Butenschoen ADMINISTRATION Danielle Larson Cover Photo by Tiffany Brooks
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WBA BOARD OF DIRECTORS: BOARD CHAIR: John Huntley, President/CEO, Mills Electric Inc. EXECUTIVE COMMITTEE: Pam Brady, Director NW Gov’t & Public Affairs, BP Cherry Point; John Huntley, President/CEO, Mills Electric Inc.; Doug Thomas, President/CEO, Bellingham Cold Storage; Josh Turrell, Partner, Larson Gross PLLC; Josh Wright, VP/Broker, Bell-Anderson Insurance BOARD OF DIRECTORS: Tyler Byrd, CEO, Red Rokk Interactive; Jane Carten, President, Saturna Capital; Andy Enfield, Vice President, Enfield Farms; Bryant Engebretson, Managing Principal, Tradewinds Capital; Jon Ensch, Commercial Banking Officer, Peoples Bank; Mitch Faber, Partner, Adelstein Sharpe & Serka; Sandy Keathley, Former Owner, K & K Industries; Tony Larson, Founder, Whatcom Business Alliance/Board Member Emeritus; Laura McKinney, NW Gov’t Affairs & Public Relations, Alcoa-Intalco Works; Nicole Newton, Semiahmoo Resort/Golf/Spa; Becky Raney, Former Owner, Print & Copy Factory; Sarah Rothenbuhler, Owner/CEO, Birch Equipment; Patti Rowlson, Founder/ Marketing Director, PR Consulting Inc.; Galen Smith, Operations Manager/Owner, Coldstream Farms; Billy VanZanten, CEO, Western Refinery Services For editorial comments and suggestions, write editor@businesspulse.com. The magazine is published bimonthly at 2423 E. Bakerview Rd., Bellingham WA 98226. 360.746.0418. The yearly subscription rate is $25 (US). For a digital subscription, visit businesspulse.com. Entire contents copyrighted ©2020 Business Pulse. All rights reserved. POSTMASTER: Send address changes to Business Pulse, 2423 E. Bakerview Rd., Bellingham WA 98226
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IN THIS ISSUE 11
CAN WHATCOM SURVIVE IN A POST CORONACONOMY?
As 2020 draws to a close, the pandemic continues wreaking havoc on the Whatcom County business community.
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HOW TO HELP THEM HELP YOU
18
STAYING PANDEMIC POSITIVE
We’re being forced to rethink how we work. In this new setting, what can employers do to promote best work practices for their employees and their companies?
Kelli Visser became CEO of the accounting and consulting firm Larson Gross in January 2020, mere weeks before COVID-19 hit. The Lynden native chose to remain upbeat.
22 PERSONALLY SPEAKING
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From the time he entered aviation school to this year, his 35th in airport administration (the last five at Bellingham International), Sunil Harman has dealt with everything you could imagine would wreak havoc at an airport.
26 BELLAIR’S PIVOT CHALLENGE
“Employee.” That’s a term that has vanished almost entirely from the vocabulary (and payroll) of Richard Johnson’s business over the course of the past several months.
28 HELPING THE DREAM COME TRUE
26
28
Look for additional content online at businesspulse.com
The Whatcom Dream helps people hone financial literacy skills, educates the community about poverty-related issues and gives a hand up to individuals who struggle to survive on limited incomes.
COLUMNS 31 If you have a PPP loan, here’s what to do now
33 Should you separate
business from politics and social issues?
37 WBA pilot of virtual job fair could be replicated countywide
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39 The case against an
adjudication of Nooksack water rights
43 The market: four things to watch now
45 Five steps to protect your family’s health
47 China’s hammerlock on rare metals
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BP PUBLISHER’S NOTE
Pivoting our content away from COVID-19 is not possible... yet Tony Larson As we wrap up 2020, no one would have predicted that Whatcom County’s businesses would still face relatively strict economic limitations heading into 2021. Yet, here we are, with most public health officials predicting that restrictions will remain well into 2021, even as a vaccine becomes more widely available. This issue of Business Pulse continues to focus on issues associated with the ongoing pandemic. Writers Dustin McKissen and Mike McKenzie discuss the local economic impact of COVID-19 in their piece “Winners and Losers: The Whatcom County Economy vs COVID-19?”. Dustin and Mike spoke to several local businesses to get a better sense of their outlook entering the new year, along with reviewing the wave of company closures we’ve seen. Regular columnist Cheryl Stritzel McCarthy discusses how companies can help their workforces cope with COVID-19 in her piece “How to Help them Help You.” Cheryl also profiles new Larson Gross CEO Kelli Visser in her piece “Staying Pandemic Positive,” and Mike McKenzie’s piece “Bellingham Airport’s
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Recovery Remains Up in the Air (And Not)” profiles how airport leaders are coping with very limited travel. In addition, we spoke to Richard Johnson of Airporter Shuttle whose business has been devastated. His story of faith, creativity and optimism is inspiring. I hope you’ll consider sending any business you can his way. While the issue is COVID-19 heavy, it isn’t all bad news. Whatcom Dream Executive Director Trudy Shuravloff discusses how her organization is helping Whatcom County families thrive by becoming more financially literate in “Helping the Dream Come True,” and several companies have made significant hires and promotions. But let’s be honest: No one will be starting the new year where they hoped to be. If I had told you back in March that for the most part we would be in the same place at the start of 2021, you would have told me I was crazy. At the very least, you would have hoped that I was crazy. Yet, here we are. More importantly, here you are. If you are reading this issue of Business Pulse, it means you still have hope. You still believe that there is information in these pages that can help your business, your employees, and your family make it to a better tomorrow. It would be foolish of us to predict when that better to-
morrow will come—but we know that eventually, it will. We are all a little tired of waking up to another COVID Monday, which looks disturbingly similar to another COVID Saturday. This might seem trite, but imagine how our grandparents felt waking up to another WWII Monday, which looked disturbingly like another WWII Saturday. No one knew when the end would come. No one knew if the end would look worse than the beginning. No one knew how many people would die, how many jobs would be lost, how many companies would go under, how many hospitals would have to ration supplies, or what anyone had done to deserve living through such a nightmare. Nightmares, they believed—just as many of us believe now—are reserved for other people. However, the idea that previous generations had a more inherently noble response to living through their own nightmares is fiction. Like us, they were frightened, angry, and impatient. They just wanted the whole thing over with. They had to grit their teeth—but they didn’t like it any more than we do. In fact, there has never been a generation that preferred gritting their teeth over smiling, laughing, and enjoying a meal with a friend without wondering whether
this was going to be the last time they got to do that. Yet, they made it. Eventually WWII Mondays and WWII Saturdays became WWII memories. I can’t tell you when COVID Mondays and COVID Saturdays will become COVID memories, but it will happen. I can promise you that. In the meantime, continue improving. Read this issue and look for strategies and tactics you can borrow to help yourself, your business, and your employees persevere. Attend virtual events designed to educate and inform. No one makes it to the other side of anything by giving up. Do everything you can to make sure next month and next year doesn’t start the same way this month and this year started. I wish this issue wasn’t so COVID heavy, but we have a responsibility to focus on the issues having the greatest impact on Whatcom County. Let’s resolve to do as much as possible to change that. That includes following public health protocols and making sure those protocols incorporate the voice of a business community that knows how to stay open while safely protecting customers. Stay safe, stay healthy and stay prosperous as we look ahead to 2021. Let’s make next year a better one.
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BP NEWSMAKERS
Lisa Hefter
Kelli Strong
Lisa Hefter appointed to Peoples Bank and Peoples Bancorp Board of Directors Peoples Bank has announced the appointment of Lisa Hefter to the Peoples Bank and Peoples Bancorp Board of Directors. An executive with nearly 30 years of experience in community banking, Hefter has been involved in all facets of bank management and has contributed to the company’s tenfold growth during her tenure. Today, Peoples Bank is a locally owned and operated, independent full-service community bank with over $2 billion in assets. Hefter started her banking career at Peoples Bank in 1992. She was named executive vice president, chief administrative and risk officer in early 2020, after serving as chief financial officer for more than 10 years. In her current role, Hefter is responsible for directing the bank’s administrative and operational activities and overseeing enterprise risk management. Kellie Strong named to lead property management firm Real Property Management Teyata recently named Kellie Strong the regional property manager of its Bellingham office. Eric Peoples launched the franchise, which specializes in managing residential and multi-family properties in Whatcom and Skagit counties, earlier this year. Real Property Management is the nation’s largest property management company, able to leverage vendors for premium
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Dana Weber
Ted Mischaikov
pricing, Strong said. Strong has nearly 20 years of experience in residential and commercial real estate, including contracts, negotiations and property maintenance. She also has an associate degree in marketing. “We provide landlords and tenants technologies that ease the stress of owning or renting and offer real-time accounting, maintenance, and management updates through our interactive portal,” Strong said. “With my emphasis on excellent customer service, owners will have complete confidence that a firm with a proven history of success is managing their investment home.”
Best Western Plus Bellingham honored for COVID-19 safety Best Western Hotels and Resorts chose the 132-room Best Western Plus Bellingham out of approximately 300 hotels in the western United States and Canada for its We Care Clean award in September. The Best Western Plus Bellingham is located at 3985 Bennett Drive, just off Interstate 5. “I am so proud of this team and blessed to have them,” said Dana Weber, general manager of the Best Western Plus Bellingham. “We are humbled to win this award.” The Best Western Plus Bellingham was honored for making numerous changes to create a safer environment for guests amid the pandemic, including: installing touchless hand sanitizer stations at every high traffic point in
Troy Muljat
Kena Greer Brashear
the hotel; sanitizing luggage carts, the van, the fitness center and lobby tables after each use; consistently sanitizing entrance doors and elevator buttons throughout the day; providing a deluxe grab-and-go breakfast; removing high-touch items from each guest room and only allowing them upon request; and using extra cleaning chemicals and sanitizing each room to high standards. “We have also ordered an electrostatic sprayer that will be another measure we will use to keep everyone safe,” Weber said. The Best Western Plus Bellingham is managed by Providence Hospitality Partners, which actively supports its comprehensive safety and cleanliness protocols.
Prairie Dog Pet Products hires new CEO Ted Mischaikov, a longtime local executive, was hired by Prairie Dog Pet Products as the company’s CEO. Mischaikov, previously president of Ferndale-based Healthy Pet, also served as president of Trillium Corporation from 2000 to 2005 and has been active in the Western Washington University Foundation.Prairie Dog Pet Products is headquartered in Abilene, Texas, and has a facility in Montrose, Colorado. There are future plans that involve Bellingham. Mischaikov will remain based in Bellingham but will be traveling regularly to those facilities. The company, which has 250 employees, manufacturers freeze-dried,
NEWSMAKERS BP
smoked and natural pet treats. It was recently purchased by a private investment firm called Kinderhook Industries, which manages more than $3 billion in capital.
Home sales, prices soar in Q3 The median sales price of a Whatcom County home was $450,000 in the third quarter, up 12.5% from the third quarter of 2019, according to Troy Muljat, owner and president of Bellingham-based Muljat Group Realtors. The number of homes sold in the county jumped 13.2% to 1,020. While impressive, those third-quarter numbers paled in comparison to the Bellingham housing market, Muljat said. Bellingham’s median sales price soared 16.5% in one year, nearly $80,000, to $550,000, and multiple offers on homes listed for more than $1 million aren’t uncommon, he not-
ed. Also, the number of homes sold in the Bellingham market skyrocketed 26% from a year ago.The inventory of homes and mortgage rates continue to be low and fuel the home market, but buyers also are more comfortable searching for homes and making decisions than they were immediately after the pandemic’s outbreak in March, Muljat said. “When COVID first hit, we were only allowed to have one client in a listing at a time,” said Kena Greer Brashear, managing broker for Muljat Group Realtors. “Now we are able to have four clients and an agent. This has changed the dynamic for families looking for homes.”Another factor heating up Whatcom County’s housing market is the migration of buyers northward. Buyers also were active in other county communities. Home sales in Sudden Valley and Lynden were at least 20% higher in the third quarter.
Bode’s Precast Inc purchases LSC Pre-Cast Systems Ltd With 50 years of concrete manufacturing experience, Bode’s can now supply pre-stressed concrete orders in addition to other precast concrete products they manufacture.They have also recently become a licensed manufacturer of Light Pole Bases, a division of ReCon Wall Systems Inc. These bases allow fast, easy installation with an adjustable anchoring system that can accommodate light poles up to 25 feet high.
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FEATURE BP
Winners and Losers The Whatcom County economy vs COVID-19 Dustin McKissen and Mike McKenzie As 2020 draws to a close, the COVID-19 pandemic continues wreaking havoc on the Whatcom County business community. With vaccine development uncertain and Gov. Jay Inslee’s “Safe Start” plan stalled locally, the impact will likely inflate even more. Business closures this year include manufacturing, restaurants, retail, bars, gyms, salons, churches and many others, leaving the county economy reeling just as voters recently made decisions that will affect how and when the state will fully reopen. A short list of closings shows just how widespread were the challenges created by the pandemic and the resulting economic restrictions. Safran Cabin — a French aerospace manufacturer of overhead cabins and ceiling panels for airline giants such as Boeing, Airbus and Mitsubishi Aircraft — announced Sept. 28 that it will lay off its remaining 250 local employees (with 60 days’ notice) and close its Bellingham facility by the end of 2021. The closure revelation followed the company’s April decision to lay off 205 employees shortly after the national COVID-19 shutdown. With travel severely restricted across the globe, demand for
the company’s products had plummeted. State Rep. Rick Larsen pledged support in a news release to “the (laid-off ) workers and communities I represent. … Northwest Washington is home to the best aerospace workforce in the world. I will work to ensure necessary resources to help them find new work.” But options for this region’s unemployed aerospace workers could dwindle further, given Boeing’s recent announcement that it would shift production of 787 jets from Everett to a facility in South Carolina; many Boeing employees commute from Whatcom County. The Safran announcement followed a stunning earlier decision by Alcoa to curtail activity at its Intalco Works aluminum smelter in Whatcom County’s Cherry Point Industrial Zone. Alcoa’s April announcement resulted in as many as 700 layoffs. The planned closures of the Intalco Works plant near Ferndale and of Safran’s Bellingham facility means that more than 1,000 jobs will have disappeared from two major
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area employers by this time next year. Alcoa has been on the local scene for 50 years, and Safran has operated for 30 years in the Barkley Village area (including time under the Heath Tecna and Zodiac Aerospace brands). The economic impact of the pandemic has spread far beyond large manufacturers. COVID-19 shutdowns and continued state and local restrictions have left food and beverage establishments throughout Whatcom County either closed permanently or in danger of going out of business. For example, the breakfast restaurant Over Easy in Bellingham closed its doors for good in June. The owners called the closure a “heartbreaking decision” in a letter posted to the eatery’s front door. Village Pub & Eatery, Kay’s Cake Designs, Firefly Lounge and others have faced the same dilemma. Statewide restrictions shut them down, and many were left to decide whether they could wait it out and reopen. National brands also have felt the sting. In late spring, Pier1 closed its Meridian Street location, joining several Bellis Fair Mall retailers that have struggled since March to stay open. Starbucks closed its downtown Bellingham location at the end of August, citing the lack of a drive-thru window as a key factor in the decision. Brick-and-mortar retailers faced a severe uphill climb because of the ongoing closure of the United States border with Canada, which has accelerated the negative impact on stores. Many have braced for the possibility that nonessential border traffic could remain prohibited or heavily restricted during the peak holiday buying season beginning at Thanksgiving in late November.
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The toll on Whatcom County’s businesses has devastated the workforce. The countywide unemployment rate stood at 9.4% on Aug 31. That was down almost half from a high of 17.7% in April but still more than twice the 4.7% rate the county had in March, less than a month before state and local governments put lockdowns and economic restrictions in place. Contrary to the business closures, the local housing market remained strong in some ways. For example, as of August the median home price in Bellingham was $620,000, according to data from the Northwest Multiple Listing Service. That was a 20% increase over August 2019. According to several sources, part of the reason for the continued strength of the residential real estate sector may be the pandemic itself. With many companies permanently making a transition to telecommuting arrangements, buyers from Seattle and other high-priced housing markets see Whatcom County as a relative bargain, especially outside of Bellingham. “People are moving here from California, Oregon and generally from about anywhere, trending from urban to suburban,” said Troy Muljat, who leads the regional Muljat Group. Muljat publishes a detailed quarterly report on what’s happening on the county real estate front. After the third quarter, he reported that the market was growing outside of Bellingham to smaller towns and unincorporated areas. Spring wasn’t its usual self, Muljat said, but July through September flourished. “Second quarter is usually big, but fell through June,” he said. “Then in July,
August and September the COVID makeup sales appeared. But inventory is still at an all-time low in Bellingham because the delay in sales squeezed the market.” The experience in Whatcom County mirrors what national experts call the most uneven overall economic downturn in modern history. The downturn favors highly skilled white-collar workers capable of telecommuting. According to an analysis by The Washington Post, at the outset of the pandemic, 60% of college-educated workers could telecommute for their jobs, compared to just 14% of workers with no more than a high school education. In Bellingham and Whatcom County, that ability for college-educated workers to telecommute while keeping the same job has meant that demand for housing is skyrocketing, causing home prices to increase by hundreds of thousands — even during a pandemic-fueled recession. While that favors homeowners and real estate agents, higher housing costs leave affordable housing even further out of reach when many families need it most. Amid the bad news, a smattering of well-known Whatcom County companies have managed to survive and even grow, with strong website sales and such changes in business models as shorter hours, the addition of take-out, drive-through sales, home delivery and no-contact curbside pickup. Pizza, fast food and coffee come to mind at the forefront. Incrementally, cafes, bars and breweries have eased open by limping through capacity limitations. Some businesses with existing e-commerce capabilities have adapted well to the public’s concerns over safety and to the Inslee administration’s public health directives. “Our online sales have gone up about 70%,” said Ty McClellan, third-generation owner of Hardware Sales LLC,
a perennial entry among the Business Pulse Top 100 Private Companies. He said that in-store sales went through a huge decline and gradual recovery (“from down 70% to 50-to-30-to-10, and flat by year-end”). But the company’s internet activity boomed. Why? In short, everyday consumerism. A huge part of the Hardware Sales business model is built on business-to-business, industrial and wholesale. “One, with social distancing and most stores closed, people have been staying in place in front of computers, and two, home improvement projects became the thing,” McClellan said. “And then, the government stimulus checks played a big role, as people began spending again.” Stores reopened, too, and retail picked up proportionately. An always-thriving industry in Whatcom County, coffee set a positive example because of the ubiquitous presence of drive-thru service in virtually every corner of the county. Three chains led the way, with 36 combined locations in Bellingham and Whatcom County: Starbucks (14, with 10 in Bellingham and two each in Ferndale and Lynden); Woods Coffee (14, with nine in Bellingham, one near Blaine, and two each in Ferndale and Lynden) and Cruisin Coffee (eight, including six in Bellingham, plus Ferndale and Lynden). “Without any marketing strategies, our online sales went through the roof,” Woods Coffee CEO Wes Herman said. Starbucks reported the same trend nationwide. Both companies also have strong sales on grocery shelves, and both closed in-house barista services for several months — Starbucks closed downtown Bellingham permanent-
ly, and Woods closed inside-only shops temporarily — and strengthened their drive-thru procedures and methods. Among the county’s big three, Cruisin Coffee (established in 1993) is the only one with a drive-thru-only model, and its lines at the windows have remained steady and long. Cruisin Coffee also has five other locations — 13 total — in Bow Hill, Anacortes, Mount Vernon and Yakima (2). As essential businesses, grocery stores were exempted from closures, and all the major local players set the standard high for in-store adaptations — one-way paths, limited numbers, extra cleaning methods, etc. — and for curbside, no-contact pickup. For the most part, sometimes after temporary closures, traditional stalwarts of food and beverage — restaurants, bars and specialty stores — established themselves and stayed alive through take-out menus. “The biggest problem we all had,” said Kevin Weatherill, CEO of The Markets LLC, “was the slowdown of our supply chains.” That was a common testament mentioned by leaders in several industries who spoke with Business Pulse, including from appliance giant DeWaard & Bode, personal home-training equipment store Bellingham Fitness Gear and companies such as Barlean’s that have packaging shortages. Supply chain issues were among most-heard complaints from the buying public as well, given the shortage of such items
as toilet paper, sanitizers, hand soaps, masks and gloves. In the big picture, Whatcom County businesses face major challenges in the coming months. The likelihood that cases of COVID-19 might increase over the winter months could compel a rollback of aspects of the state government’s “Safe Start” plan and a reimplementation of the strict lockdowns that were mandated during the first few months of the pandemic. That stance would assume that a full reopening would require the complete eradication of the novel coronavirus, some semblance of herd immunity, or the wide availability of a vaccine. And with no guarantee of a safe vaccine on the horizon, many businesses and industries could face the stark reality that they could never viably reopen. That also fuels a perceived shift in public policy, from the prevention of hospital beds and treatments from becoming overwhelmed (“flattening the curve,” so to speak) to a complete elimination of the virus. An option for businesses concerned about their futures is to engage in public policy. Some industries have publicly sought the reevaluation by Inslee’s administration of public health mandates, with limited success. One successful attempt, however, did occur in late summer: The personal fitness industry successfully lobbied for changes in gym capacity requirements that, had they not been changed, likely would have decimated the state’s health clubs. Many individual business leaders have told Business Pulse of this conundrum: Speaking out is risky, but
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so is remaining silent and disengaged from the processes for legislating public policy. Barbara Chase, executive director of the WBA, puts it this way: “We believe that if you or your business don’t participate in the shaping of public policy, you will be governed by those who do.” Richard Johnson owns and operates Bellair Charters & Airporter at the southern edge of Ferndale, and his company — not to mention the entire travel and tourism industry — has been decimated. “But I’m just one small voice,” he said. “We’re often slow to speak because an individual business can suffer outlash, or just simply don’t have the time or expertise to approach government. We need large voices — like the Washington Policy Center and, locally, the Whatcom Business Alliance, and all the industry associations and profes-
evidence or widespread agreement that continuing to throttle the nation’s economy is an effective way to keep a population healthy. On the other hand, strong — though frequently unmentioned — evidence shows that isolation, stress, poverty and housing insecurity lead to an abundance of what renowned economists Angus Deaton and Anne Case call “deaths of despair.” Statistics show that these deaths are attributable to increases in suicide, drug and alcohol abuse, domestic violence and violent crime in response to personal financial situations. Many Whatcom County businesses and employees won’t survive another six months of local restrictions — they are stuck, for the most part, in Phase 2 of the four stages of recovery — and the populace faces head-on the potentially devastating consequences.
sional groups we belong to — to combine their resources and knowledge and get it in front of government officials.” (You can read more about Johnson and Bellair’s economic struggle on page 26.) Chase said that these issues are front and center for the WBA, a nonprofit, nonpartisan organization that speaks on behalf of many business in the county. “With the current mix of economic restrictions and proposed massive tax increases, Whatcom County and Washington business communities risk entering a downward spiral that would be difficult to recover from,” she said. The lingering restrictions, business closures, layoffs and furloughs have left myriad companies, workers and families with nowhere to pivot. The economic impacts of the pandemic and the novel coronavirus itself aren’t the same. Recession and business closures aren’t inevitable side effects of the disease, nor is there conclusive
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FEATURE BP
PHOTO: iStockphoto.com/Nikola Stojadinovic
How to help them help you Support employees during the long haul of COVID-19 Cheryl Stritzel McCarthy COVID-19 is forcing us to rethink how we work. In this new setting, what can Whatcom County employers do to promote best work practices for their employees and their companies? A handful of mental health experts in Whatcom County — who also manage businesses and employees — gathered via Zoom recently to share tips on how employers can support employees during COVID-19. The virtual forum was part of the Whatcom COVID-19 Employer Support Task Force. Read on to find ideas and techniques for keeping your employees healthy, happy and productive. Sources include Karen King, a licensed mental health counselor and CEO of King Health Associates, with 24 employees in two Bellingham locations; Sterling Chick, vice chair of Whatcom
Pictured left to right: Karen King, Sterling Chick, Linda Grant, Pamela Wheeler and Debby Cwalina.
County’s Public Health Advisory Board and regional clinical director of Catholic Community Services, a western Washington nonprofit with 3,600 employees (250 in Whatcom County); Linda Grant, mental health court program manager for the Whatcom County Health Department; Pamela Wheeler, human resources director for the Opportunity Council, a local nonprofit with 320 employees; and Debby Cwalina, senior human resources manager at the Opportunity Council.
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Frequent and clear communication COVID-19 is a health, economic and social crisis all at once, said Sterling Chick of CCS. “Think of it as a siege,” he said. “It crept up on us. It’s restricted our movements; it’s blocked our escape by plane or even driving north by car. We go out at our own risk.” Employees want certainty in an uncertain world, Chick said. Employers can offer employees frequent and clear communication. “CCS, like everyone, was caught off guard at first. Our staff wanted answers, and they wanted them in writing. We have a big organization, part of it unionized. We came up with a COVID response, 150 pages long. That’s too much for most staff, but managers and supervisors were to digest and relay that. “Early on, our staff wanted to know about masks, hand sanitizer, plastic shields. We struggled at first to get them answers, and that added to their stress.” As in a siege, employers can expect a prolonged period of stress. “COVID fatigue is real and will affect our work for a long time,” Chick said. Frequent and clear communication at CCS takes the form of a systemwide newsletter, sent via email twice a week at first and less frequently now. It also consists of managers meeting twice weekly to discuss employees’ needs; an internal online meditation, named Nourishing, now weekly; and at one point in the larger organization — because some staff had sick or dying family members — a grief support group. CCS changed from face-to-face counseling to telehealth counseling in the space of a weekend, which required intensive communication with employees. That change to telehealth had to happen fast, or CCS employees would lose touch with the families they coun-
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“
Recognize that some people handle tough times via denial. –Linda Grant, mental health court program manager for Whatcom County Health Department
sel, Chick said. Technology needs had to be met quickly. Communication with employees included promoting Washington Listens, a state government support line open to all, and sharing information about what the Employee Assistance Program could offer, how to conduct self-care, initial extra pay for front-line staff, and available extra supervision via text, chat apps, phone calls and video conferencing. “A couple of our sites have a virtual lunch nearly every day,” Chick said. “Those have been going really well. It’s important for employees to talk to each other directly, without going through a supervisor.” These virtual lunches offer opportunities for employees to share jokes, have fun and tell success stories from the families they counsel. After the pandemic hit and CCS shifted to video counseling, the number of billings has increased slightly, Chick said. Reduced school schedules and less staff transportation likely play a role. “We were surprised,” Chick said. “We have more connections with families than we had before. It’s all about being able to do the job that our employees came to CCS to do.”
You’re in it with them These times are uncertain, said Karen King of King Health Associates. “What happens when humans are uncertain? We go back to instinctual responses, usually fear.” Fear is the crux of mental health challenges we’re seeing in ourselves and our employees, King said. Employers are supporting employees at the same time they’re going through the crisis themselves, King said. Think of this example from airplane flights: People should put on their own oxygen masks first, then help others. Employers can best support team members when leaders are getting the help they need too. Recognize that humans are resilient and have survived crises in the past, such as 9/11, King said. Recognize that it’s going to get worse, but then it will get better. “It’s not if your employees are going to get stressed and have mental health challenges, it’s when,” King said. Employers can put a plan in place for that. Nearly 18% of Americans experience anxiety disorder in any given year, according to the Anxiety and Depression Association of America. A March 2020 survey by the mental health company Total Brain reported that 35% of American workers said COVID-19induced anxiety was interfering with their workplace productivity. Consider that a third of your staff may experience diagnosable anxiety during the pandemic, King said. “That’s an important backdrop.” Those most at risk are on the front lines — people in grocery stores, workers in health care and people caring for children or elders. Employers can acquaint themselves with their employees’ situations to better help, King said. Be watchful for irritability, lateness or isolation. Understand that employees might be using negative coping skills, such as increased drinking.
Use the right language Linda Grant of the Whatcom County Health Department said that even employees with good coping skills can be overwhelmed by a prolonged siege such as the COVID-19 pandemic. Employers may notice a difference in work performance or emotional reactions. Employers can avoid off-limits vocabulary when talking to employees, Grant said. Don’t use the words “depression” and “anxiety,” which could be construed as meddling in an employee’s
medical issues. “Use softer words, such as ‘you’re looking stressed’ or ‘I don’t see you using your usual great skills,’” Grant said. “HR or EAP may be a help to you here.” Recognize that some people handle tough times via denial, which may manifest itself in resistance to masks and other precautions, Grant said. People’s subconscious response to crisis may be “If it’s not there, I don’t have to feel anxious or afraid.” If that becomes extreme, it falls to the employer to tell team members that they must follow precautionary measures along with everyone else. Be timely The 320 employees at the Opportunity Council, a local nonprofit serving homeless and low-income citizens, had already developed systems for coping with and supporting Whatcom County’s most vulnerable, said Pamela Wheeler, senior human resources director. Those skills once helped their own co-workers de-stress too. COVID-19 changed that; co-workers and managers were no longer immediately available in person.
PHOTO: iStockphoto.com/Joanna Skoczen
National alcohol sales (retail, not restaurants or bars) increased 16% during the early months of the pandemic, according to the market research giant Nielsen. Hard liquor showed the biggest increase, at 27%, with wine increasing 14% and beer/ cider increasing 12%. Employers can show a little vulnerability themselves, King said. When employees know you’re in it with them, that makes a difference. The Google research program Project Aristotle has shown that Google’s most productive teams had a leader who was empathetic and vulnerable. Employers can create pathways for employees to communicate, King said. At her business, those pathways include virtual lunch meetings at her desk Mondays and Thursdays. “Everyone can just drop by. We make it comfortable, with music on and my pets in the background. I can hear how my counselors are doing.” Employees may be fearful for their jobs or family members, King said. “Small employers may not have HR, but make sure there’s a method in place for them to come talk to you.” Employers can give more short-term projects to boost a sense of accomplishment and provide as much predictability in scheduling as possible.
“We worked diligently to respond to (employee) questions and concerns,” Wheeler said. “When they saw over time that we were consistent in our behaviors to protect them, they began to calm down.” Part of the Opportunity Council’s COVID-19 response to employees was to offer additional health leave throughout the year. Employers can be timely with information, Wheeler said. An example of that was early dissemination of cloth masks, said Debby Cwalina, senior human resources manager at the Opportunity Council. Employees gain confidence when they know “my employer is paying attention, my employer cares about us, my employer wants to remain engaged,” she said. Cwalina said the Opportunity Council is happy to share resources and information with area employers. Opportunity Council employees work across five counties. The pandemic has created different stressors for a counselor who goes into a residential facility, a preschool teacher trying to work on Zoom, or a worker conducting to the homeless. A key response to mounting employee stress has been communication. But the information flowing from federal and state government was too much, Cwalina said. “We digest, then provide our employees with one-page summaries on an internal COVID website, or we send a short email with an update. They’re getting the information they need, and we’re not pushing legal or compliance jargon.” In this new world of COVID-19, employers and employees alike want an exit strategy. But, King said, “we are in pandemic soup and there’s no exit from the pot so far. One major coping skill that mental health professionals teach their clients is that everything will pass.” Even if we don’t yet know when or how.
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BP BUSINESS PROFILE
STAYING
PANDEMIC
POSITIVE New Larson Gross CEO embraces growth, change Cheryl Stritzel McCarthy
PHOTO: Ben Bender
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Kelli Visser became CEO of the accounting and consulting firm Larson Gross in January 2020, mere weeks before COVID-19 hit. The Lynden native chose to remain upbeat. “If there’s a positive in a pandemic for a new CEO, it’s that there’s no rulebook,” she said. “I didn’t have to fill anybody’s shoes on how to cope with this.” Visser highlights more positives: bringing on remote new hires, enabling existing staff to work remotely should they choose to, achieving a new outlook on expanding geographically, pivoting to serve clients under COVID-19 restrictions and quickly engaging with other leaders within Larson Gross. “What better way for me to get to know these colleagues I hadn’t worked with in this capacity before?” Visser said that as professionals in
Whatcom County, in this time of COVID-19 we can either contract and protect or we can go on offense and continue to grow our businesses, expanding services and creating opportunities for employees to grow in their careers. “Embrace a growth mindset in this time of uncertainty,” she said. Visser grew up on a dairy farm in Lynden. “I said I’d never marry a dairy farmer,” she said. “Well, never say never.” Visser and her husband, who were high school sweethearts, have four children, aged 9 to 14. Visser started her career in the Bellingham office of the Moss Adams accounting firm while still a student at Western Washington University. In 2008, she joined Larson Gross, a Bellingham firm with locations in Lynden and Burlington, $17 million in annual revenue and 120 employees. Most of the employees are in Whatcom County, and 80% of those are full-time workers. Visser has always enjoyed consulting and strategy — for Larson Gross as well as for clients. “When the opportunity for CEO came up,” she said, “it felt like a great fit.” Larson Gross has several thousand clients in the United States and Canada, most of them local. Tax planning/consulting brings in the most revenue. Hiring in the age of COVID-19 At the time of this interview, Larson Gross had hired eight new full-time employees since the impacts of the COVID-19 pandemic began to be felt locally in March. With some of those new workers, the hiring and initial onboarding process was entirely remote. In 2019, Larson Gross had one remote employee, in Cowlitz County. Today, remote employees are in Cowlitz, Yakima and King counties — and even in Arizona. “Our people are at the core of everything we do,” Visser said. “How do you do that in a virtual way? This has forced us to do it. It took down the geography barriers we’d mistakenly put up in our minds about where we could work.” In the pandemic’s early days, Larson Gross was classified as essential and could open offices earlier than businesses in many other industries. Some employees chose to work remotely and are still doing so. But with pandemic protocols in place, the firm also can accommodate staff who prefer to work on-site, Visser said. “Working from home, it’s not for everybody, though some embraced it,” she said. “It will be part of our work arrangements going forward.”
New geographic markets A business entering a new geographic market can’t rely on its history in its home market, Visser said. Larson Gross celebrated its 70th anniversary last year. “That’s a huge milestone,” she said. “But when you think about the network, the generations of family members (within client companies), the understanding of your business within a locale — you don’t have that when you enter a new marketplace.” Outside your home area, business strategy takes on a different flavor. In those cases, the firm can highlight its specialization in a particular industry or topic (such as international, cross-border, or nonprofits) or hire talent with “those deep roots within the community where you desire to do business,” Visser said. “We believed this needed to be part of our strategy, but COVID accelerated it. At one point, we thought we could never replace face-to-face, but we’ve shown you can have strong connections using technology. You have to be intentional and creative, but we’ve seen it work.” Serving clients in this new age Before COVID-19, all but one of Larson Gross’s 120 employees were on-site. “To move them all offsite in a matter of days, in an organized, panic-free way, that doesn’t happen from the efforts of just one person,” Visser said. “Also, we had to completely adapt how we interact with clients.” In the professional-services field, serving clients is of utmost importance, Visser said. As for adapting that under COVID-19, “I won’t say it was seamless, but it was effective and not chaotic.” For example, some clients were used to getting tax returns and financial statements on paper. “We needed to migrate to electronic delivery for the vast majority of clients. But we can’t be one size fits all.” Meeting client preferences included adding drop-off and pick-up delivery services for paper documents. Maintaining protocol — such as masks, temperature checks and sign-ins — provides the flexibility to meet with clients in the office if needed. Visser knows that masks can be politically divisive. “We have folks on all ends of the spectrum,” she said. “Everyone has set that aside; it isn’t about me, it’s about us and serving our clients. It’s about respecting procedures the firm has put in place to help us do our best. That’s a mindset, a culture, and I’m proud of our team.” The COVID-19 pandemic is highlighting how the firm
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can improve, Visser said. One example is that as the workforce became more mobile, it illuminated how much paper was still traveling between staff and clients. “We want to revisit how we move closer to a true paperless model,” Visser said. Leading Visser spent her early days as a CEO working from home while helping teach her children, an experience that prompts her to comment, “I am forever grateful to our education system and our teachers.” With so many folks now working from home, more common ground emerges, she said. “We’re all professionals; we all have families. You get to see another side of your co-worker or client. We’re all looking for answers; we could help each other.”
Larson Gross is a member of RSM, a global network of independent accounting firms. RSM’s resources help Larson Gross quickly get information to clients about the changing tax landscape, economic stimuli and other situations. This was especially helpful at the beginning of the COVID-19 pandemic, when changes were rolling out fast. Getting such information to clients so they can make timely decisions is critical, Visser said. But it’s more than
delivering technical information. “Many of our conversations that started around tax law changes pivoted to challenges that business owners face. Business owners are people like you or me, with kids in school, bills to pay, futures to plan. That can get shaken up. “When you’re in the midst of struggle, to have someone you trust come alongside and empathize, whether personal or professional … if we can be that partner, that is a privilege.” One last positive “There are always events in life out of our control. The only thing in our control is how we respond,” Visser said. “To navigate the unknown in a positive, proactive way, to be adaptable, to rely on each other … it truly brought the team together and allowed our leaders to lead.”
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BP PERSONALLY SPEAKING
Bellingham airport recovery remains up in the air (and not) Empty seats and ultra-safe health measures reflect the bleakness of the continuing COVID-19 crisis Interview by Mike McKenzie From the time he entered aviation school to this year, his 35th in airport administration (the last five at Bellingham International), Sunil Harman has dealt with everything you could imagine would wreak havoc at an airport. At Embry-Riddle Aeronautical University in Daytona Beach, Florida — where Harman earned bachelor’s and master’s degrees in aeronautical, aviation and aerospace science and technology — the curricula required simulating every major crisis known: severe weather conditions, catastrophic flight responses, and, yes, even epidemics (SARS, Ebola and others). Harman has logged over 10 years at Florida airports, where hurricanes and other tropical and subtropical storms are part of every-year life. At Miami International, he dealt with the trickle-down impacts of 9/11. And now this. Nobody saw the COVID-19 pandemic coming, and nobody foresaw how long and hard it would hit the travel industry. In an email Q&A, Sunil described the local reverberations of the pandemic:
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BP: Describe the impacts of the COVID19 shutdown on your industry and specifically on BLI. SH: The global public health emergency has significantly impacted the air travel industry and airports. Bellingham International Airport, as a federally funded and obligated commercial service airport, is categorized as an essential critical service infrastructure and is thereby required to stay operational for transporting needed goods and personnel. We remained open and operating under specific health and safety procedures that keep employees and customers safe. BP: How’s that worked? SH: Our terminal expanded in 2013 to accommodate passenger growth for at least the next 20 years. The additional capacity makes it easy for travelers to spread out and maintain social distancing. In early March, the Port of Bellingham implemented internal operational protocols that required the use of gloves and face coverings by all employees, enhanced cleaning and disinfecting procedures, remote and rotating shift work, and social distancing.
For passengers, we reduced and separated hold room seating for arrivals and departures, painted social separation floor markers, and conspicuously positioned disinfectant products. In addition, we converted all restrooms to a fully touchless environment and installed private, sanitized lactation pods for mothers. By mid-May, BLI was among the first airports to implement mandatory face coverings for anyone accessing the commercial terminal. We posted all preventative measures in restrooms and on all public-messaging monitors in the terminal. Our safety measures complied with the COVID-19 Commercial Service Airport Requirements announced Sept. 24 by Gov. Jay Inslee. BP: What have the traveler impacts been? SH: By March-end, the year-overyear passenger (enplanements) declined by 41%, largely due to curtailment of Canadian customers, with the closure of the border. BP: How much did the airlines cut back? SH: Allegiant eliminated all service in April and May, cratering year-overyear enplanements by 54.5% and 62% before resuming a gradual return in
ed to grow to $3.8 million for the year. Plus, BLI has been and remains one of the lowest-cost commercial service airports in the U.S. BLI presents an opportunity in recovery for airlines to benefit from a high-quality, low-cost operating environment within a passenger catchment area of more than 3.4 million people. Airline fees per enplaned passenger at BLI are $5.70 compared, in our market, to 10 times that at SeaTac and nearly 20 times more at Vancouver, B.C. Last year the direct impact on revenues from the opening of Paine Field in Everett resulted in a $489,000 loss in our operating revenues, down to $6.83 million.
“The compounded effect (of border closure) on demand and uncertainty on an airline schedule for reopening was staggering, and projecting future demand is disturbingly uncertain.” - Sunil Harman Director Of Aviation at Port of Bellingham
PHOTO: Port of Bellingham
early June. Alaska scheduled between one and two daily flights to Seattle (down from five daily), but with insufficient demand they operated an average of only five flights a week. Even with both carriers operating with reduced schedules, extremely low fares and waived change and rescheduling fees, the passenger demand was down by 68% and 69% in July and August. The sharp declines resulted in both of our partner airlines reducing seat capacity in markets such as Las Vegas and California. BP: Any projections of increasing the seats/flights? SH: We serve and depend greatly on Canadian customers. With the extended border closure for all but essential travel, the compounded effect on demand and uncertainty on an airline schedule for reopening was staggering, and projecting future demand is disturbingly uncertain.
BP: Didn’t some scheduling get bumped up in September? SH: For the remainder of the year, barring any significant resurgence of COVID-19: Alaska Airlines, using the 76-seat Q400 through October, projected a possibility for four daily Seattle flights to commence in November. Allegiant Airlines operated a varying schedule through October to Las Vegas, Phoenix and Palm Springs, with Oakland resuming in November. Plans called for service to Los Angeles around the Thanksgiving and Christmas holidays. Thus, we anticipated October to resemble August and September, with about 7,500 enplanements, increasing to 9,000 or slightly more in November and December. BP: Any positives to build on? SH: Yes. With operating expenses of $5.56 million, the airport remained cash positive. This year through September, the decline has resulted in a revenue loss of $2.77 million, estimat-
BP: To stay solvent, what monetary help did you receive? SH: With 2020 operating expenses budgeted at $5.98 million, the year-ended operating deficit of $2.13 million would have been untenable were it not for the $5 million in gap funding from the Coronavirus Aid, Relief, and Economic Security Act. BP: Speak to the prognosis and solutions. SH: The nation’s airports will require recovery and stimulus funding through 2023. The proposed Health, Economic Assistance, Liability Protection, and Schools (HEALS) Act, or some similar relief legislation, is the only way to secure the national system of commercial airports. Given all the uncertainty, the Port’s proposed 2021 operating expenses budget for BLI is considerably lower, at $4.75 million. This was achieved through personnel reductions — from 18 full-time staff to 15, eliminating one management and two operations positions — as well as reductions in contract services. The Port also delayed any nonessential or non-grant-funded capital improvements for at least the next sev-
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BLI STATS 41% 69%
Year-over-year decline in passenger boarding (enplanements) as of March 31, 2020 Decline in passenger demand as of August 31, 2020
NUMBER OF PASSENGERS:
502 7,297 9,000+
April 2020
September 2020
Projected for Nov/Dec 2020
$500,000 Approx. lost revenue after Paine Field opened in Everett, 2019
$598M
BLI 2020 operating budget
$2.13M
Year-end operating deficit
$5M
Federal gov’t gap funding
$475M
BLI 2021 operating budget
15
Full-time staff,
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w/ elimination of 3 positions
BUSINESSPULSE.COM | NOV/DEC 2020
eral years. These reductions, combined with the CARES funding, should see the airport through 2021.
ing shuttle vans offline and assigning an increase in the frequency and level of disinfecting and cleaning.
BP: Paint the big picture of effects on Whatcom County’s economy. SH: The overall impact is best derived from a recently completed Aviation Economic Impact Study for the Washington Aviation System [administered by the Washington State Department of Transportation Aviation and supported by funding by the Federal Aviation Administration]. The 2018 pre-pandemic airport activity and employment data identified BLI as generating $471.5 million in economic benefit. An estimated year-ending 2020 decline of 70% suggests an estimated overall adverse regional impact of $330 million. BP: How have you repurposed personnel and properties and operations? SH: New safety procedures for social distancing necessitated shift and duty-hour changes and separation of activity areas between the airport rescue fire fighters and commercial terminal operations centers. That kept our trained and operationally necessary staff safe and effective. Specifically, a positive test among the ranks of airport rescue fire fighters, who are trained and certified to respond to aircraft emergencies, would have rendered them all to quarantine. Hence, the three airport operations managers, also certified as airport rescue fire fighters and who came up from the ranks into their current positions — and are on-call 24/7 — were scheduled for rotating hours to maintain effectiveness. The airport’s administrative staff responsible for secured area badging and numerous other customer-service functions rotated to ensure continuity. For airport parking and janitorial contractors, reallocation included tak-
BP: Did you establish quarantine areas or methods of dealing with people with symptoms? SH: Operating procedures were put in place for airport rescue fire fighters staff to not engage and to contact mutual aid at the Bellingham Fire Department to evaluate and, if needed, transport. BP: How were the Transportation Security Administration and airlines involved in all that? SH: Stakeholders and tenants are always informed of the Port’s policies and procedures. They have worked with the Port’s management team to implement COVID-19 procedures, including the distribution of face-covering masks, touchless passenger screening and enforcement of adopted policies. Also, we adjusted with updates due to changing Centers for Disease Control and Prevention and state guidance. The airlines and TSA adopted touchless procedures, and the Port budgeted an estimated $20,000 in upgrading all restrooms to touchless. BP: How about thermal or other wellness screening? SH: Alaska Airlines requires a health questionnaire before check-in. However, there is no active thermal or other screening. A blog post in Airport World stated: “SARS, swine flu, MERS, Ebola and Zika viruses have disrupted global air travel to different degrees. But the severity of COVID-19 blindsided the U.S. aviation industry in ways not experienced since the terror attacks of 9/11.” BP: Your thoughts about that perception?
SH: The coronavirus has by far been the most profoundly catastrophic event in the history of civil aviation. The global impact and the magnitude of job losses worldwide is estimated to exceed 46 million. All the other events combined don’t come close to the scale of this pandemic’s disaster. For example, airplane manufacturers Airbus and Boeing, their supply chains of manufacturers, and their distribution logistics slowed immensely and could halt entirely due to delayed and canceled orders and options for customer airlines, who are burning through cash at a rate of $5 billion a day. Even with government grants and forgivable loan paycheck protection programs of over $52 million, airlines have identified the need for another $25 million to $28 million to prevent the layoff of 70,000 more employees. Ironically, a pre-pandemic concern for lacking a sufficient number of trained airline pilots has turned into a surplus of pilots. The terror attacks of 9/11 and the ensuing two-year downturn resulted in pilots being furloughed and/or being unwilling to return to the volatility synonymous with the airline industry. Given the estimated five to six years for recovery this time around, there may be a significant additional delay, as the workforce will have moved on.
BP: Your vast background appears to have prepared you well for major emergencies. SH: Incident and crisis management certification is a requirement for us in the airport management field, covering regulations to plan, simulate and train for — and to maintain proficiency to deal with — airport and national disaster emergencies, whether they are accidents, terror attacks or natural disasters. We must maintain current and updated airport emergency and security plans. Scenarios involving hazardous materials and biohazards and the equipment and procedures to effectively respond lie within the scope of such plans. BP: Was it different dealing with a heretofore unknown entity? SH: Yes. This long, drawn-out pandemic had both airlines and airports in need of national policy guidance,
testing and enforcement procedures that didn’t materialize. That caused us to adopt a patchwork of varying measures unenforceable with laws. For example, face-covering is known to be the most effective means of preventing the spread, though it still hasn’t been made mandatory nationwide. This pandemic required a much more rigorous, disciplined and coordinated global, national and industry response. BP: What’s the biggest takeaway? SH: Hindsight is always perfect. … A comprehensive shutdown followed by a carefully phased and gradual reopening with testing and contact tracing should have been the way to proactively respond to the pandemic. This lesson should become the playbook for future responses and treating contagious pathogens as a threat to national security.
BP: Did you have lessons to draw from in your experience at Miami International Airport during 9/11 that are helpful/useful now? SH: Without doubt, 9/11 forced the industry to significantly change policies and procedures, as well as harness advanced technology to prevent a deliberate security breach. We realized a need to successfully protect against terrorist acts continuously at a nationally coordinated level, and we succeeded — 20 years later there has not been a single breach.
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BP BUSINESS PROFILE
“I think back to all our other struggles (in life), and I know we’ll all get through this fine. … We’ll get something figured out.” –Richard Johnson, Bellair Charters & Airporter’s QB
PHOTO: Tiffany Brooks
When there is nowhere to pivot Bellair Charters & Airporter owner Richard Johnson continues to project faith, optimism for recovery in ‘hammered’ industry By Mike McKenzie “Employee.” That’s a term that has vanished almost entirely from the vocabulary (and payroll) of Johnson’s business over the course of the past several months. The business is buses, chartered, shuttled and leased. The Bellair Charters & Airporter buses — nearly all 70 of them — stand idle, a virtually motionless fleet on sprawling lots near Ferndale, in Federal Way and in Yakima. Johnson bought the business 15 years ago after several years at Bellair as — what’s that term again? — oh, yes, an employee. The company flourished. It’s been a consistent presence in the annual Business Pulse listing of the Top 100 Private Companies. But then, like so many others, it
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screeched to a halt in its tire tracks between spring and fall this year. “Our entire industry, worldwide — the huge travel and tourism segment of economies — got hammered,” Johnson said. For perspective, Bellair had been showing growth, posting more than $11 million in revenue during the 2019 fiscal year and boasting about 150 employees. But in the third quarter of 2020, Johnson revealed a drop of roughly 85% in sales in Ferndale, with a skeleton staff of just three or four in the office, six drivers, a few mechanics and another dozen people working in other locations.
“We’ll rebuild the infrastructure with Bellair. Five years ago, one of the Bus leasing has kept Bellair afloat. “We’re very thankful for our con- company’s chartered tour buses based and hire; we’ll do it. It’s just that notracts,” Johnson said. “It’s a low-mar- in Federal Way was slammed into body knows the timing of it.” That optimism is a noticeable trait gin segment, but high volume so it head-on by another tour vehicle while of Johnson’s. During our hour-long crossing a bridge in Seattle. provides a wonderful cash flow.” Five passengers on Bellair’s bus — virtual conversation, he smiled almost Bellair has contracts with the U.S. Navy, state and intercity bus oper- among a group of students and faculty constantly despite describing a grim ations, and construction companies from North Seattle College — died, business situation. “There’s always something to moving their employees from be thankful for,” he interjected job to job. into the conversation at one Otherwise, Bellair business point. That brought to mind has bottomed out. Throughout the late author/psychotherathe pandemic, many stories pist Alan Loy McGinnis, who have circulated about compawrote in his 1993 book The nies that have reworked their Power of Optimism, “Optibusiness models, adjusting to mists are cheerful even when survive the crisis. But at its core they can’t be happy.” and within its niche, Bellair Johnson attributes that preshas found itself with nowhere ence to his faith. “An accounto pivot. You either need a ride Bellair mechanics keep busy in the shop with maintant that used to work for us to the airport or you don’t. tenance and repair on motor homes, RVs, and for companies with fleets. told me, ‘This (pandemic shutWith COVID-19 restricdown) must be why the Lord tions, tours, charters and Airand dozens sustained injuries. Bellair gave you so much success earlier, so porter Shuttle trips completely shut never was charged or found at fault you’re able to handle this,’” he said. down. (The shuttle has since resumed, in any way, but Johnson had to meet In line with that, Johnson also starting in June with limited capacity the moment with victims’ families spoke of becoming proudly American and a drastically shortened schedule, and with his badly shaken driver and after an upbringing in Canada. He and slowly has regained 15% to 20% workforce. graduated with an undergrad degree of the customer base.) “Devastated and heartbroken,” is in marketing and an MBA at Western However, one exception to the bleak how he described the aftermath at the University in London, Ontario. He current events and uncertain forecast time. “It is so sad for the families inmoved to Minnesota 29 years ago and did unfold. volved. We needed prayer.” eventually came here. Seven years ago, “We asked ourselves, ‘What assets During that dilemma, the company he became a U.S. citizen. do we have?’” Johnson said. “Good and its buses kept running. Now, no“That was an extraordinary process,” facilities and great mechanics. We body can predict when they will run he said. “I have socks with U.S. flags opened a shop for maintenance and normally again. on them.” repair on motor homes, RVs, and for “The picture is going to look enThe U.S. model for economics, ficompanies with fleets. It’s been slow, tirely different,” Johnson said. “It’ll nance and business was one of the but sure. But the best part is that it be quite tough to rebuild to what we strongest appeals to him in becoming provided some outside work for some once had.” an American. He worked in finance of our mechanics.” Yet he holds to a positive outlook roles before anchoring at Bellair with This crisis wasn’t Johnson’s first and proactive approach.
“The person who has stopped being thankful has fallen asleep in life.” – Robert Louis Stevenson
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his wife, Julie, a North Dakotan, and two preschool-aged children, Justine and Will. The topic of business methods turned Johnson’s conversation away from despair and toward solutions. “This needs to change now,” he said. “We have to get the economy moving, not losing more and more revenue with mandates. The financial devastation to families and uncertainty is a huge economic risk.” He acknowledged that the strong — albeit paralyzing — response across the U.S. was necessary because of the unknowns about the new coronavirus. “With so many deaths and the possible problems with hospital services, out of the gates the mandates and shutdown were warranted,” he said. “But now we have plenty of science
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and knowledge to work with in flattening the curve. The strategy needs to balance the minimizing of health risks against the harm to the economy and the financial loss and mental health of so many individuals. Stats show that the overall harm in these areas is far worse than the overall health risk.” In other words: more science, less politics. Johnson didn’t wade heavy-handedly or deeply into the latter; he understands that it’s risky — with a high probability of futility — for business owners to flout governments. “It’s just that everyone’s risk is not the same,” he said, “so the solutions can’t be treating all of us the same.” Nor will the eventual outcome return us to sameness, Johnson theorized.
“We get used to painting a picture of what we’ve always had….we’ll have to get used to seeing a new picture now.” After a recent Seattle Seahawks victory in which the football team came from behind with 15 seconds left the game, quarterback Russell Wilson described a constant sideline message among teammates: “Keep believing, just keep believing.” It could be said that Richard Johnson is the Russell Wilson of Bellair Charters & Airporter. The company’s quarterback ended our wide-ranging conversation this way: “I think back to all our other struggles (in life), and I know we’ll all get through this fine. I have confidence that the Lord is involved and we’ll get something figured out.”
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Helping the dream come true After escaping generational poverty, The Whatcom Dream executive director helps others do the same Mary Louise Van Dyke The Whatcom Dream helps people hone financial literacy skills, educates the community about poverty-related issues and gives a hand up to individuals who struggle to survive on limited incomes. “The Whatcom Dream is so much more than financial literacy,” Executive Director Trudy Shuravloff said. “It gives you understanding of people who grew up different from you.” The nonprofit organization started out with a single financial literacy class held in the laundry room of a low-income Bellingham apartment complex back in 1999, she said. The instructors were people from the community —
professionals, middle class, some who’d grown up in poverty. All shared a common objective to give people tools to forge better lives for themselves. Shuravloff was one of the first attendees, fueled by a determination to make major alterations in her life. She described her years growing up as ones lived in generational poverty — her grandmother lived in poverty and her mother lived in poverty, and Shuravloff ’s reality was the same. In the culture of generational poverty, she said, people grow up convinced that operating in survival mode is the norm. Lives are lived in the tyranny of the moment. This reality “makes it very hard to plan into the future,”
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In the culture of generational poverty, people grow up convinced that operating in survival mode is the norm. Lives are lived in the tyranny of the moment.
Shuravloff said, “because there is always a crisis at hand.” The Whatcom Dream has expanded beyond those humble beginnings in a laundry room, moving in Feb. 2020 to 1846 Iron St. in Bellingham. Among the variety of programs offered by The Whatcom Dream are financial literacy classes, private fi-
nancial coaching, poverty simulation events, clothing and school supply sales and Christmas shopping events for low-income families. The COVID-19 crisis has forced changes in how classes are held. Instead of meeting in person for each eight-week course, people now attend virtually. The next financial literacy classes are scheduled to start in January. These classes include sessions geared specifically at teenagers, older adults and Spanish speakers. Private classes also are available. Sessions for older adults highlight such topics such as Medicare Supplement program choices, identity theft and living on a fixed income. The $20 class fees — currently being waived due to the pandemic — normally are placed into a scholarship fund to help others attend future classes. This allows participants a way
of paying forward the help they’ve received, Shuravloff said. Topics in the financial literacy classes include family of origin money beliefs and ideas, budgeting, goals, debt, credit, insurance and identification theft. Shuravloff said the topic of family of origin money beliefs and ideas is rarely discussed. People talk about cultural differences and differences between ethnic groups, she said, but not about differences due to socioeconomic levels. People raised in generational poverty don’t always know how to propel themselves out of that mode, she said. They might get hired for a job that allows them to earn what a middle-class person does. But do they understand the company’s expectations for workers? Something like being five or 10 minutes late to work might not seem a
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big deal for people who grew up poor, Shuravloff said. However, in middle-class culture, being late to work is considered non-negotiable. Failure to understand that rule could get the new worker fired for not adhering to company expectations. “We teach those different socioeconomic classes to learn from each other,” she said. Learning how people from lower socioeconomic levels view life can be eye-opening, Shuravloff says. To better be able to help people attending the classes, volunteers at The Whatcom Dream are taught how people in poverty think and what the cultural values are. People from lower socioeconomic backgrounds might be more casual in sharing personal details about themselves. Helping family when they need help often is a top value, Shuravloff said, and this can result in aspiring college students turning down scholarships in order to stay home and help family. People from middle-class backgrounds, on the other hand, may be more sparing in what information they divulge to fellow workers, friends and neighbors, Shuravloff said. Their focus is often primarily on achievement — on fulfilling such goals as ensuring that each of their children earn a four-year degree and go on to a professional job. In the financial literacy classes, participants are asked to write a five-year plan for themselves. Shuravloff said that when she took the class, she had no idea what might be happening in her life in the next 12 months, let alone in five years. “My dream was to graduate from Western Washington University with a four-year degree and buy a home,”
she said. “Now, that was very ambitious, but I did it.” Moving those dreams from paper to reality required tools, hours of planning and learning to overlay her childhood vision of life with a broader understanding. The Whatcom Dream is called that because people have their own dreams, Shuravloff said. People who want to own a home, for example, are asked how they are going to accomplish that goal and what they need to do. “We help them build a strategy with their finances,” she said, “so the dream comes true.” Private coaching is geared at people who are already financially literate but have a particular issue they want to focus on. Poverty simulation events allow participants to experience the realities of a low-income family forced to meet basic needs with little income. The nonprofit organization is supported by grants and donations from local businesses, larger companies, individual donors and volunteers. Support is offered in partnership with such area agencies and institutions as Goodwill Industries, Bellingham Technical College, Head Start and Lighthouse Mission Ministries. The staff includes Shuravloff — who confessed she never expected to find herself occupying the executive director’s chair — along with administrative staff and four class facilitators. “If we take an attitude of curiosity … instead of judgement, each of us will have a better understanding of our fellow human beings, and this will build communities,” Shuravloff said. For more information about The Whatcom Dream, call 360-306-8324, visit www.thewhatcomdream.org or find the organization on Facebook.
THE CHRISTMAS SHOPPE
Families who participate in Whatcom Dream’s financial literacy classes are invited to purchase gifts for their children at the Christmas Shoppe The quality, new items at The Christmas Shoppe are marked down 75 percent from the retail price. The 25 percent paid by shoppers is added to the financial literacy scholarship fund. Parents feel good about the system, Shuravloff said, because they are showing responsibility by paying for toys and goods. Companies, businesses and individuals donate funds, toys and gift cards each year to the Shoppe. Trudy Shuravloff, The Whatcom Dream’s executive director, says that good-quality toys — including bicycles, LEGO and other durable items that fuel the imagination and learning process — are always welcome. Donations for the Christmas Shoppe are accepted at The Whatcom Dream’s office at 1846 Iron St. in Bellingham. People also can drop off toys or gift cards at the Whatcom Business Alliance office until Dec. 7. Financial donations can be made at www.thewhatcomdream.org.
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FINANCE BP
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Have a PPP loan?
Here’s what to do now
Follow these steps to ready yourself for the end of the waiting period Tanya Silves, CPA 2020 has brought unprecedented experiences for business owners, and navigating the Payroll Protection Program certainly belongs on that list. The PPP came together at extraordinary speed, with plenty of questions and fluctuating guidance attached. Now, more than six months have passed, and more than five million loans — totaling over $525 billion — have been approved to cover payroll and other qualifying expenses in an effort to keep small businesses afloat. Loan recipients are eager to move on with the loan forgiveness process and may be frustrated that banks are not yet accepting forgiveness applications (or that the Small Business Administration isn’t processing what applications are being accepted). Here’s what you can do to make this
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waiting period productive and to proactively prepare for the future: Talk to your banker Work with your lender to revise loan documentation to take advantage of the options to move the due date of your first payment to 10 months after the last day of your covered period and to change the amortization of those payments from two to five years if your loan was approved prior to June 5. Discuss how you are reporting your PPP loan in your financial statements and the impact on maintaining loan covenants required by other debt. You may qualify to treat the loan as an “in-substance grant,” which means that you can recognize the income and reduce the loan balance as you spend it on qualifying expenses.
Focus on tax planning Given the severity of the pandemic’s impact on U.S. businesses, the American Institute of Certified Public Accountants believes that Congress intended PPP expenses to be deductible. However, the IRS issued a notice in April stating that, based on historical precedence, these expenses are currently nondeductible. To make things even more complicated, they are only nondeductible when loan forgiveness has been approved, which likely won’t happen until 2021. If your business applies for and receives loan forgiveness in 2020, you currently have nontaxable income and nondeductible expenses and can plan accordingly. However, if that isn’t the case, there is no guidance on the timing of when the expenses become nondeductible and how that could impact your 2020 and 2021 income tax returns. Lawmakers from both parties have voiced support for PPP-qualified expenses being deductible, but that has not yet translated into congressional action. Businesses should understand the income tax effect of these expenses being nondeductible and what they can do to reduce their tax liability between now and the end of the year through other considerations, such as investments in equipment and the timing of expenses. The fact that this is an election year makes tax planning critical as well, as we anticipate changes in the tax law. Lastly, consider extending your 2020 income tax returns until we have greater clarity around these issues. Monitor the legislation Members of Congress have proposed a much simpler process of streamlined forgiveness for loans under a certain amount. The commonly discussed threshold is loans
equal to or less than $150,000, but that could change. There’s still a possibility that blanket forgiveness won’t ever be granted. Update documentation Borrowers with loans greater than $2 million should continue to update documentation supporting economic uncertainty, as the SBA will automatically review these loans. Determine the “path of least resistance” to loan forgiveness. With so many changing rules, take a fresh look to identify the qualified expenses for loan forgiveness that are supported by readily available documentation and that meet the rules currently in place. While you may have originally planned on using nonpayroll expenses to qualify for loan forgiveness, the longer covered period now available may make it simpler to use 100% payroll expenses. This will sim-
plify the application and documentation process for you. The PPP felt like we hurried up just to wait. But the waiting can be productive and even beneficial to your business as you prepare for the impact of future guidance. It will come eventually — we just don’t know when. ■ Tanya Silves joined Larson Gross in 2001 and is now a part of the firm’s ownership group. She leads the firm’s consulting practice, where she concentrates on personal and business advisory services. Her primary focus is serving owner-operated businesses with tax planning and a wide variety of consulting topics, including budget and cash flow planning, profitability analyses and ownership transition planning. She has led the firm’s effort on understanding and advising businesses on the Paycheck Protection Program and Small Business Administration’s Economic Injury Disaster Loans made available through the CARES Act in response to the COVID-19 Pandemic.
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MARKETING BP
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Having a long-term, strategic and a sustainable plan will increase your odds of truly making a difference.
Should my business participate in cause marketing? Either choice is OK Patti Rowlson This is a question that has been asked many times over the years and even more so in 2020 — a year where social and political actions have spurred personal reflection, public outcry, protests and riots throughout America and beyond. Here in Whatcom County, local business leaders and marketers have been grappling with whether they should continue to separate their business from politics and social issues — a practice they may have felt was important in years past. Some have wondered whether it would be appropriate to share personal values and views through the corporate communications channels they have access to. Maybe you have even wondered what impact using the voice of your brand to share issues related to racial equality, climate change, child welfare, poverty, economics or other issues might have on your business and on the surrounding community? These are good questions, and the answers will be unique for each business, because each business and its leaders will have its own set of values. Each business — whether a momand-pop operation, a small business with 20 employees or a
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large company — gets to decide whether using their brand to advocate for political issues is the right thing to do or not. Either choice is OK. As you further explore this topic, an important thing to keep in mind is that having a long-term, strategic and sustainable plan will increase your odds of truly making a difference. Having a plan can also reduce the risk of your business being negatively impacted, PR-wise. Examples of companies that successfully incorporate cause marketing into their business Some brands have had social issues and cause marketing infused in their core values and mission statement for years, and they operate their business in alignment with their values and mission. Nike, as an example, has a corporate value that focuses on equality, and they have set up programs within the company to support that value. Their webpage — https://purpose. nike.com/standing-up-for-equality — makes it clear what they consistently do to foster an inclusive culture. This is an example of action-based advocacy; they actively do and promote activities that align with the value.
Here in Bellingham, Overflow Taps is a good example. They launched their business in 2016 with a mission to “connect craft beer enthusiasts to a meaningful cause.” Their chosen cause is clean water for people in developing countries. Over the years, they have been consistent with their efforts to bring awareness to the impacts access to clean water can have on humans. Through their business, they have raised money that funds water projects in Africa. They are living the mission and actively working toward a common goal: access to clean water. Other examples include real estate groups that use their brand to raise awareness of homelessness and fair housing issues. There are pet service businesses that give back to humane society operations and fishing industry organizations that invest in stream restoration projects. Each has made a commitment to support a cause over an extended period. They pick a primary focus and commit to supporting the cause for the long haul.
how to do it on a corporate level. A lack of preparation and planning can turn into efforts that fizzle. Inconsistent, erratic efforts cause friction between a company and consumers; corporate slacktivism can cause consumers to tune out all messages from a business and even from the cause being advocated for, which is not the goal. A recent Inc.com article explains how some companies are missing the mark when it comes to social justice and why they wish they had not started down that path. Marketers and small business leaders who have a plan (mission, vision, action steps) for communicating through their business about social issues and for actively seeking change within their business and the community can greatly minimize that friction. If you want your business to have a meaningful impact on issues that matter, explore what it means to be action oriented — listening and then creating plans that go beyond supportive statements and token donations.
How corporate promotion of social issues and political preferences can go wrong Notice the reference to consistency in all cases mentioned above? Without consistent, long-term and strategic efforts, brands teeter on the edge of slacktivism, or “slacker activism.” Slacktivist marketers share activism-related content through their corporate communication channels, such as Facebook, Twitter, blogging and instore promotions. For a brief period — a week or a month, maybe — some of these marketers vigorously ask for consumer involvement. Then, they drop that cause and move onto the next hot topic when it arises. The marketer may passionately want to support certain causes that they feel strongly about, but they don’t know
Personal advocacy versus corporate advocacy Posting a political or issue-related status update on your company’s Facebook page — one that is connected to an issue you personally feel passionate about — may not connect with the voice of your business or the people who buy from you in the way you intend. Doing so can cause confusion as people see or read things that are off topic for your brand. Sometimes well-intentioned posts can come off poorly or be interpreted in ways you didn’t intend. In addition, sharing personal views through your business can offend or heat up a large share of your target audience. Yes, there are brands that broadcast their stand on political topics with an intent to heat up consumers. Back to
Nike as an example, in 2019, their chair and co-founder, Phil Knight, said that it doesn’t matter how many people hate your brand as long as enough people love it. “You can’t try and go down the middle of the road,” he said. “You have to take a stand on something.” Of course, major corporations like Nike have vast experience with marketing, branding and customer relations. They have marketing departments and big budgets for messaging; they employ experienced teams to plan, strategize and assess risks and rewards. Small business marketers, of course, do not have robust marketing departments and teams of experienced communications pros to help plan effective cause marketing campaigns; this does increase the risk of unintended, potentially negative results that will take time to clean up. My advice: Pause and think. Then pause and think again. Ask yourself: What is the purpose of sharing this? Does this align with our company’s brand, or should I share this message on my personal page instead? Without a plan, you may get caught up in the heat of a moment and post something that increases the chance of negative PR for your business. With a plan, you don’t have to continually assess what causes your business should advocate for (if any); your mission and vision will guide you. How to increase the impact and reduce risk With a plan that aligns with your company’s mission, you will know exactly which issues (be specific) you can show corporate support for through your communications channels. You will have time to prime your market — dripping messages over a period of time and educating them on why the issue matters to your brand and what you have done and are doing about it. You will have time to “do and show,”
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which means fully incorporating the issues that matter most into your brand — online, in your place of business, with your staff, and through all forms of communication. Then, at moments when messaging about the cause needs to be elevated, stakeholders will be better prepared. If your company does not have a strategy for cause marketing, or if you have not tested your audience and educated them about your purpose for advocacy, use your personal social media accounts to share your views on political or social issues.
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“I want to do something, but my business doesn’t have a plan.” We’ve all been forced to adjust and pivot, to grow and try new things in 2020. Perhaps living and working through this epically challenging season in life and in business will provide the fuel you need to make a lasting change — one that will positively impact others in a broad and diverse way. Perhaps this time of awareness — watching and learning from others who are testing the cause marketing waters — reaffirms your desire to keep politics and advocacy out of your business and continue focusing on what you do best. That is totally fine, too. Not all businesses need to step into the advocacy ring. As we approach the end of the year, this is a good time to consider both paths. If you do not have a corporate mission or vision, you can use this time (and your newfound determination!) to pause, plan and develop a strategy that will align with your decision and serve your business — and the community around you — in the new year and in years to come. ■ Patti Rowlson is the founder and communications director at PR Consulting in Bellingham. Since 2009, she has helped small businesses and large corporations manage public relations and communications for a variety of stakeholders. Patti has been recognized for her work in the community by being named Most Valuable Player, Small Business of the Year finalist and Professional Woman of the Year finalist. She currently serves on the board of the Whatcom Business Alliance. Visit https://pattirowlson.com.
WORKFORCE DEVELOPMENT BP
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WBA to pilot virtual job fair December effort for Blaine high school students could be replicated countywide Jim McKinney Among the missions of Whatcom Business Alliance is to seek innovative ways to help local businesses and communities prosper. That was the case long before the COVID-19 crisis began, and it remains critically important. The lockdowns and other economic changes have been devastating to our once-thriving economy. Some of our WBA members, families and youth are struggling. Many small businesses and service industry employees are surviving on subsidies, and large employers such as Alcoa Intalco Works and Ershigs Inc. have closed, costing hundreds of high-paying, family-wage jobs. Recent research shows that students are
falling behind with well-intentioned but undesirable remote learning. Innovation, partnerships and enduring efforts are essential to helping our economy rebound. One way the WBA has been addressing economic challenges is to help companies share career opportunities with workers. In early December 2020, the WBA and the YESWhatcom youth engagement initiative will host a virtual job fair for Blaine High School juniors and seniors. Some 18 to 20 representatives from six industry clusters will connect virtually with about 300 students. The business leaders will talk about their companies, opportunities and career pathways to success. This will be a pilot project that, if successful, will be offered to every school district in the region.
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YESWhatcom grew out of an important community need prior to the COVID-19 crisis. As early as 2017, WBA board members identified a problem: Many businesses were unable to find quality and qualified employees. There was a disconnect between career education and the skills needed to fill local jobs. Business leaders realized that many of our youth were unaware of the businesses that make up our local economy and of the opportunities
in Whatcom County for well-paying careers. The WBA gathered a distinguished group of business, nonprofit, education and community leaders to map out a plan to fill the knowledge gap. WBA leaders set out to connect schools, students and the business community in a long-term effort to provide companies with a better workforce and young people with better opportunities. The outcome was a central hub of
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information, YESWhatcom.com, that provides information on companies, employment opportunities and ways to find a job. The YESWhatcom team has partnered with schools, the Northwest Washington STEM Network, Career Connect Washington, Junior Achievement, WorkSource, Bellingham Technical College, Whatcom Community College, Technology Alliance Group for Northwest Washington and the Alcoa Foundation to complement workforce development efforts in Whatcom County. The goal is to build an enduring enterprise that enhances opportunity and prosperity in the county. The pandemic, with its limitations on in-person activities, has forced businesses and schools throughout Whatcom County to evolve to meet changing needs. Many meetings are being done remotely, and technology is bringing school into our homes. While in many ways the changes have been less than ideal, the pandemic also has created new opportunities to embrace the future. The upcoming virtual job fair is part of that. If you are interested in learning more about YESWhatcom, supporting the initiative or presenting your company in upcoming job fairs, please visit www. yeswhatcom.com or call the Whatcom Business Alliance at 360-746-0418. With your support, innovation, partnerships and enduring efforts, we will overcome and prosper. ■ Jim McKinney is a retired US Army Foreign Area Officer, small business owner and defense consultant. He serves on the boards of Saturna Investment Trust and the Healthy Youth Coalition, and he volunteers for the WBA’s Youth Engagement Initiative.
AGRICULTURE BP
PHOTO: iStockphoto.com/Dmytro Diedov
The case against an adjudication of Nooksack water rights An adjudication without agreement on a path to protect natural resources is not the answer Fred Likkel Recently the Washington State Department of Ecology made a quiet but momentous decision. It’s asking the state Legislature for money to begin the process of adjudication in the Nooksack Basin. This move has caused huge concern among the farming community and many other water users. Why are farmers so adamantly opposed to the state’s adjudication plan? An adjudication is a lawsuit by the state against all water users in the basin. It examines all water rights (permit, certificates, claims and exempt uses) and establishes a priority date for each water use based on “first in time, first in right.” Whenever water supply is limited, the junior (newest) rights must shut off to ensure the senior (oldest) rights have their promised water. Local tribes are first in line as far as seniority. They have
a senior water right claim based on treaties with the federal government in 1855. Tribes have on-reservation water right claims as well as claims from those treaties calling for adequate water to support a healthy fishery. All other water rights in the Nooksack Basin are junior. This includes water rights held by cities, the Whatcom Public Utility District, water associations, farmers and thousands of individual wells supplying homes. For farmers, adjudication is complicated by how water rights were granted back when irrigation started in earnest in Whatcom County. Most were aware that a water right was needed for surface withdrawals, but at the time, few understood that wells also needed a water right. In many cases, the well driller filed the application for a water right, but this was not consistent. We are left with a checkerboard of fields with and without water rights. During an adjudication, those using water with no rights will be forced to stop all water use,
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with no opportunity to even speak into the process. It’s important to recognize that adjudication is a strictly legal action that will make water management more contentious. It does not deal with the major issues our community faces in managing our natural resources. The community has been working together in various ways to help deal with these issues. Adjudications, however, have always caused water right holders to hire lawyers to defend current rights. This will inevitably change the approach of all water users in this region — from a collaborative, positive stance to a defensive posture strictly focused on who gets water. The only winner in this scenario will be the attorneys. By eliminating users who currently have no rights and putting those who have legal rights at great risk, an adjudication will cause irreparable harm. It will render much of our farmland
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The only winner in this scenario will be the attorneys. useless for producing crops, and it will devalue local family farms to the point that farming will no longer be a viable option. Why would farms and other users lose access to water? Instream flow rules provide a baseline for fish needs in our streams. Few, if any, streams currently meet these requirements, but the law has been only sporadically enforced, with just occasional water shutoffs. An adjudication makes it clear that would change. Irrigators are the most vulnerable to this possibility, but others are also
at risk. For example, the city of Roslyn had its water shut off in 2001 and 2004 during an adjudication because their 1908 water rights were junior to other users. There are thousands of Nooksack Basin water users who would be in jeopardy of losing their water rights. Also, the Nooksack would be different from other areas that have survived an adjudication because the Nooksack is one of the few river systems that doesn’t have reservoirs that can release water to maintain stream flows during the critical summer low-flow season. What does this mean for our community? When flows are not adequate for fish in the river, or any tributary, the law requires that water be shut off. In the most likely scenario, no current right beyond the tribal rights would be secure. For farmers, this is a doomsday scenario. No water means no crops. This uncertainty threatens even the most secure farms.
Farmers will be forced to change their current priorities to spending resources on lawyers rather than investing in positive solutions such as habitat restoration and floodplain management. Experts estimate that individual farmers and other water right holders spend hundreds of millions of dollars in legal fees during an adjudication. The other distinct possibility for farmers is to sell to real estate developers who are willing to take the risk on holding the valuable asset of land. As our population booms and land prices skyrocket, they will be more able to afford what will most likely be a bidding war for what few available water rights senior holders might lease out. Landowners will have no other choice but to convert farmland into rural residential sprawl. While Ecology suggests this process might take 10 to 20 years, experience in the Yakima adjudication suggests it could be much longer here. In Yakima, only surface water rights were adjudicated, but in the Nooksack, Ecology is proposing that both surface and groundwater rights will be included. That significantly complicates the situation. Attorneys estimate private water right holders will likely spend $500 million to as much as a billion dollars in a likely futile effort to protect their access to water. The state also could spend that much in taxpayer dollars to pursue a course that conflicts with the state’s obligation to protect the interests of its citizens. All parties, including farmers, agree that current water rights are a mess. But new clarity helps only if it creates a water supply structure that supports our goals as a community. There are multiple ways our community can reach its water resource goals without the cost and contention of an adjudication. Good resource management is not accomplished through the enforcement of disparate, antiquated laws governing
water rights, water quality and land use. We can do so much better than relying on the state and courts to conduct an expensive, contentious, 20- to 30-year adjudication of water rights. The disruption and dissension that this process will inevitably cause can easily be avoided. An adjudication of water rights without agreement from all parties on a path forward to protect our natural resources is not the answer. We are encouraging all water users to make
this case to Ecology, the governor and the Legislature and stop movement toward a Nooksack adjudication. ■ Fred Likkel is the executive director at Whatcom Family Farmers, a farm advocacy group that focuses on public education of the good work of local farmers as well as advocacy for all in the agriculture industry.
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ECONOMY BP
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What’s going on with the markets? Four things to watch in the months ahead Camille Koppenberg, AAMS, and Dick Donahue, AIF, CFP During the first quarter of 2020, global equities experienced the fastest drawdown in history. This was then followed in the second quarter by the largest 50-day advance in history. One question we have frequently received this year has been, “Why is there such a disconnect between the markets and the economy?” The markets’ outperformance of the economy seems to be priced in by optimistic investors. If you couple that with the record levels of stimulus, low
interest rates and a potential for low inflationary growth, investors have the opportunity to earn larger-than-normal returns. Even then, the risk to markets is two-sided. As we look at the ride back up, 2020 has been volatile. By the end of June, the S&P 500 had produced 68 moves of greater than 1%, including a stretch during which the market moved by at least 1% on 24 of 25 days. Of note, the recent market rally can be tied to the five largest stocks of the S&P 500: Apple, Microsoft, Amazon, Facebook and Alphabet/Google. Pullback from any one of these stocks could create a market decline — as was seen in recent weeks when inves-
tors rotated out of the technology sector and into defensive utility stocks. Despite a pullback, these companies still make up 25% of the S&P 500’s market capitalization. Employment The August employment report shows that housing, retail purchases and auto sales have managed to produce solid gains. However, unemployment remains elevated, at 7.9% as of the end of September. Yelp’s Local Economic Impact Report reported in September that 97,966 businesses — 60% of those closed since the beginning of the pandemic — have been closed permanently. Businesses
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have had to keep up with local policy changes, keeping their doors open through innovation and hard work. A stabilization of business will rely upon how the virus is controlled in the upcoming months. Personal consumption Consumer spending in May surged 8.7%. In June it was up 6.5%, in July 1.5% and in August 1.0%. Much of the recovery in consumer spending has been in goods rather than services. People continue to purchase groceries, home improvement supplies, exercise equipment and other goods. The trend toward goods spending rebounding faster reinforces the important differences between this slump and previous ones. In most recessions, demand is reduced and supply is plentiful. Pandemics are different. Even though 35 LUXURY ROOMS
people have the desire and means to spend, they can’t or won’t because of social distancing. As we move ahead, we are monitoring the following areas: A second wave of virus infections As the easing of lockdowns increases, we should know in the next months whether a second wave is on its way. Our hope is that most places will be better equipped for a second round of the virus. Treatment also appears to be underway, and hopefuls are looking at a vaccine by 2021. Impact of a change in office The Democrat nominee, Sen. Joe Biden, plans to partially reverse the 2017 Tax Cuts and Jobs Act. An important potential reversal to note
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would be a loss of stepped-up basis. Under current law, assets that pass to beneficiaries receive a “step up” in basis. This means that beneficiaries receive the asset as valued at the date of death. If the asset is sold right away, this usually will lead to little or no capital gains. But if an unrealized gain is taxed at the benefactor’s death, beneficiaries would get hit at receipt (rather than at the time of sale of the asset). The U.S. federal budget deficit The deficit is projected to have reached $3.1 trillion in 2020. The debate will eventually include how to pay for government spending in reaction to the coronavirus pandemic. We will most likely see this in increased taxes. Democrat control of the White House and Congress would make corporate tax hikes more likely, as well. Our prediction is that the economy will likely continue to grow slowly as activity gradually increases. Gains will be more difficult to achieve until the virus is reduced. For investors, it will be important to review your portfolios more frequently than you have in the past. Appropriate portfolio diversification can help buffer you from volatility. ■ Asset Advisors, LLC is located in Ferndale. Investment advisory services offered through CWM, LLC, an SEC Registered Investment Advisor. Carson Partners, a division of CWM, LLC, is a nationwide partnership of advisors. The views stated in this article are not necessarily the opinion of CWM, LLC. If you would like a review of your investment portfolio, contact us at 360-733-1200.
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HEALTH BP
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Five steps to take to protect your family’s health ... featuring exercise, laughter, water and good food Julie Hawkes, CHC, CLC, CNSA, CP Food can be transcendent. It can bring us back to great times in our lives (think grandma’s fried chicken, holiday cookies, birthday cakes, etc.). Food traditions can become almost like rituals, and yet the very foods and activities we become so accustomed to can compromise our health — and our immune systems. To help ensure the health of our families, we need to move outside the food-equals-fun paradigm, bringing new traditions to the family table and making smart life choices. Here are five simple steps you can take right now to protect your family’s health and support their overall vitality. Make one better food choice each week Create new family traditions around what is considered “good food.” Eating right can ensure we get the vitamins
and minerals we need to keep our bodies healthy and our immune systems strong. In fact, studies show a profound correlation between a healthy diet and a strong immune response. The good news is that it can be much easier than you think to add a boost of nutrition into fun foods your family will love. For example, with greens, chocolate and a healthy nut butter, you can whip up a smoothie that tastes just like a peanut butter cup! Other small changes, like adding a colorful salad to a meal, are easy and can greatly improve your health over time. Just one new healthy habit per week can make a profound difference. Exercise Yeah, I know. Some days it can seem so much easier to Netflix and chill. But if we want to protect the health of our families, it’s imperative that we turn off the screens and get moving. Get outdoors and go for a walk, hike, bike ride or anything else that gets your blood pumping. If you can’t
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get outside, have a family dance party, learning new moves together on YouTube or Tik Tok. There is a compelling link between physical activity and the strength of our natural defenses. Laugh it up We’ve all heard “laughter is the best medicine,” and this is not an adage to be taken lightly — especially now. Put humor on your “keep family healthy” list, as it’s proven to ensure a thriving immune system. Find a few simple items that make you laugh — comic strips, silly photos, funny sayings or quotes — and hang them where you can see them. Your immune system will thank you. A family board game night also is a great way to connect, share laughs and make lasting memories.
Drink half your body weight in ounces of water Drinking water can be overlooked as a necessary part of staying healthy. It does so much more than quench your thirst. Not only does water help remove toxins from your body, but it also helps carry much-needed oxygen to your cells, supporting a well-functioning immune system. How much water should you drink? Use this simple formula: Take what you weigh, cut that number in half and drink that many ounces of water per day. If you aren’t used to drinking that much water, it may seem difficult at first, but stay the course. Your body will adjust, and before long you’ll find yourself craving that extra H2O. Get the nutrients your body needs While it’s always better to get your
nutrients from food than from a bottle, the reality is that isn’t always possible. That’s why it can be so important to take quality supplements that can help modulate your immune response. Omega-3s are nutritional superstars because they help maintain the well-being of every cell in your body. They may specifically support the immune system by enhancing the function of immune cells and encouraging healthy white blood cell function. Omega-3s are considered essential fatty acids because they are critical for staying healthy, but they cannot be made in your body. So, you must get them in your diet from things like fatty fish or a high quality fish or flax oil supplement. Vitamin D also is crucial for immune support and overall body wellness. According to the National Institutes of Health, adequate vitamin D levels may decrease susceptibility to infection. Since an estimated 77% of the U.S. population is deficient in vitamin D, taking a quality vitamin D supplement is a solid idea for everyone. Living through times of uncertainty is challenging for all of us, but these five simple steps can help you feel certain you’re taking important strides toward protecting your family’s health. ■ Julie Hawkes has 25 years in the natural health arena and is a CHC, CLC, CSNA, CP and the team nutrition educator for Barlean’s, a national nutritional supplement company located in Ferndale. Barlean’s products can be found at www.barleans.com.
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OP-ED BP
Washington needs manufacturing to lead the economic recovery Kris Johnson Kaitlyn Pype wasn’t sure what she wanted to do with her life, but she knew she enjoyed working on cars. She thought about a career in automotive repair, but a degree program in mechatronics at Clover Park Technical College caught her eye because it combined a variety of interests. “So, I went for it,” Pype said. After earning an associate degree, Kaitlyn not only landed a job in the industry, but she is also part of the school’s four-year Bachelor of Science in mechatronics technology program. She shared her success story with me recently as part of Manufacturing Week Live, a streaming web program produced last month by the Association of Washington Business (AWB) to highlight the role of the manufacturing sector in Washington’s economy. Kaitlyn was one of 84 people I spoke with about manufacturing over the course of the six-day series. The broadcasts were new for AWB, part of a year filled with change and disruption. Normally, our staff spends the first week of October on a bus, traveling the state and touring shopfloors to highlight the importance of manufacturing jobs. This year, because of the pandemic, we couldn’t go inside dozens of manufacturing companies, so we got creative. We
built a mobile video studio and hit the road, setting up each day at a different manufacturing-related venue and streaming interviews with manufacturing leaders, elected officials and young people like Kaitlyn who are just beginning their careers. Even though the format was different, the goal remained the same: To highlight the vital role that manufacturers play in the health of our economy and our communities. Manufacturing accounts for 8.5% of the state’s nonfarm employment and produces more than $63 billion in economic output — approximately 11% of the Gross State Product. There are more than 6,500 manufacturing companies across Washington, from big companies like Boeing to small, family firms that started in a garage or basement. Prior to the pandemic, manufacturing built our economy, providing Washingtonians with good-paying jobs to support families and communities and giving the world essential products, everything from airplanes and hand-sewn work gloves to apples, wine and electronics. In the early days of the pandemic, manufacturers responded to the call to make personal protective equipment for first responders. And when we finally emerge from the pandemic, manufacturing will no doubt lead the economic recovery. As we think about how to rebuild an economy battered by the coronavirus, it’s imperative that Washington’s leaders think about ways to support Washington manufacturers.
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Your company can help local youth develop valuable career skills and your workforce needs. Createyour yourcompany companyprofile profile and and start posting Create posting jobs jobs
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Thanks to these companies for their support of workforce development in Whatcom County:
UCanTrade, Inc.
IAj Multimedia
www.yeswhatcom.com Part of the WBA Youth Engagement Initiative
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Sustaining and growing jobs must be a priority. We need to provide a regulatory environment that allows manufacturers to grow. We need to invest in infrastructure so manufacturers can get their goods to market and their employees can get to work. And we must continue to focus on workforce training to ensure that people who need jobs have the skills they need to fill existing job openings. Finally, we need to change the perception of modern manufacturing so that more people like Kaitlyn recognize the amazing career potential that exists. “You can do anything you want in manufacturing,” Kaitlyn said during our first web broadcast. “There are hundreds of directions to go in, you just have to pick one.” ■ Kris Johnson is president of the Association of Washington Business, the state’s chamber of commerce and manufacturers association.