Republican presidential candidate John McCain met publicly with a handful of Iowa’s top executives this morning, none of whom said they were ready to lay off employees due to the current economic meltdown.
“I, like you, am optimistic,” Prinicpal Financial CEO Larry Zimpleman told McCain about half-an-hour into the conversation. About 300 business folks were invited to look on as McCain, Zimpleman and the other Iowa business leaders discussed the economy.
Richard Jurgens, CEO of Hy-Vee Food stores, told McCain his grocery store chain added 2000 more employees in the past 12 months. Over the next year, Jurgens predicted Hy-Vee may hire another 2500. “We’re able to kind of find a way to negotiate the troubled water and are pretty proud of that, but it certainly has made it challenging,” Jurgens said. “It has caused us to adjust our market strategies rather than our ability to grow our business.”
Fuel costs are up 45 percent for Hy-Vee this year. “While all of our customers see at the gas pump what’s going on with the price of gas off and on through this year, they’re not quite as aware of how much impact it’s having on what they pay for everything that is transported,” Jurgens said. “We have had unprecedented price increases in our company this year from manufacturers that they have to pass along because of the price of fuel.”
Miriam Erickson Brown, CEO of Anderson Erickson Dairy, said her family-owned business hasn’t laid off workers, but isn’t hiring either. “We’ve had to pull out of some areas of distribution that are farther-reaching,” she said. “We cover a five-state area and some farther places in Illinois we’ve pulled out of because we simply cannot afford all the costs associated with the fuel.”
Tom Godlasky, the Des Moines-based CEO of North American operations for Aviva — the fifth-largest insurance company the world, said consumers will “sit on their hands” and ride out the economic storm. “I think it’s important that we get the liquidity down to Main Street,” Godlasky said. “It is these businesses, family-owned businesses, other businesses that will pull us out of the economic uncertainty that we have.”
At this point in the conversation, McCain returned to the subject of the Wall Street bailout which failed to pass the U.S. House on Monday. “One of the reasons why congress failed to act effectively is because it hasn’t really sunk in that the people who are hurting and are being hurt are Main Street — families, small businesses — those kinds of people that are the engine of our economy,” McCain said.
About four million workers have 401(k) accounts that’re managed by Principal. “We estimated that yesterday, in the midst of the correction on Wall Street, that 401K accounts yesterday, senator, lost something like $850 bilion in value while we were debating a bill that had an ultimate pricetag of $700 billion, so this is not a Wall Street problem,” Principal CEO Zipleman said. “This is a Wall Street and Main Street problem.”
Iowa Association of Business and Industry president Charles Sukup sat through the forum and afterwards commented on the slightly rosier outlook for Iowa’s economy compared to the rest of the country. “We’re fortunate in Iowa that we have several sectors of our economy that are going strong,” Sukup said. Sukup’s family runs an ag equipment business in northern Iowa.
Steve Boal, the chief financial officer of an Ankeny business, was in the crowd. “I’m not sure I fully grasp how dire the situation is,” Boal said. “Nobody can seem to explain that to me so that I can get my mind around that.”
Larry Morris, a financial advisor who was in the crowd, too, said he didn’t look at his own 401(k) yesterday. “I was afraid to do so,” he said. “I’m fearful that it’s going to keep dropping like a stone unless we get the right leadership in our country.”
The event was staged at EFCO Forms on the northern side of Des Moines. Albert Jennings, the company’s CEO, told McCain EFCO’s business is up 28 percent worldwide and four percen in the U.S. this year.
Jennings also complained that local media outlets have no idea what his company does. “We haven’t poured a wheelbarrow of concrete for years,” Jennings said.
“The paper’s always behind,” McCain said. The crowd reacted with laughter and applause.
Jennings continued. “We’ve been here 75 years and they still don’t know what we do,” Jennings said of the Des Moines-area media.
“They don’t appreciate what I do, either,” McCain said, adding, “That’s the truth.” The crowd applauded longer and louder.
Click on the audio file below to listen to the entire event.