Layoffs by contractors hurting businesses

By Diane Saunders
Staff Writer
Published on Wednesday, November 5, 2008 11:16 AM MST

Layoffs by contractors at Freeport McMoRan’s Dos Pobres copper mine north of Safford are causing distress at local hotels and businesses in the Gila Valley.

The Arizona Department of Economic Security office in Safford reports about 60 applications per day for unemployment benefits. Most of these applications are from employees of contractors at the Freeport-McMoRan copper mine north of Safford.

“For a couple of weeks we’ve had quite a flow (of applicants),” said Elizabeth Smith of DES. “It’s been quite a hit for Safford.”

Freeport spokesman Richard Peterson said last week that the mining company has not laid off any employees in Arizona; however, mine contractors have initiated layoffs.

Those applying for unemployment benefits include employees of Aker Kvaerner, one of the main contractors at the copper mine. Other contractors have also laid off employees, including Conwear, Western Industrial, Bowen, J.M. Excavating and Hamilton, according to DES.

Mary Ann Rieck, also of DES, said employees of local businesses not associated with the mine also have applied for unemployment because they have lost their jobs.

The Aker office in Safford referred the Courier to its Tucson office. The person who answered the phone at the Tucson office took a message and said someone would call back. No one returned the call as of press time Monday.

Layoffs of mine contractors are impacting the hospitality industry. Tammy Mayhew, general manager of the Days Inn, Quality Inn and Suites, Comfort Inn and the Manor House restaurant, said in addition to the local layoffs, the nation’s economy as a whole is leaving its mark on the local hospitality industry.

Sheldon Miller, director of the Graham County Chamber of Commerce, agreed that lodging is off from last year’s record pace.

A year ago, hotels were full. Visitors to the area were hard-pressed to find a room unless they had reservations. Now rooms are empty, and local hotels do not need as many employees to serve guests.

Karen Carter, general manager of the Super 8 Hotel in Safford, said many of the mine’s contract employees lived at the hotel until the layoff.

“Most of the people who were here were the subcontractors. Letting them go has impacted us tremendously,” Carter said.

As a result, Carter and Mayhew have been forced to make staff adjustments.

“You can’t have (hotel) workers if you have empty rooms,” Carter said.

Mayhew said she gauges the number of employees needed at the businesses she manages by how many guests rent rooms in the hotels and buy meals at the restaurant. Fewer customers translate to fewer employees.

Layoffs at the mine are not the only contributors to the slipping economy in the Gila Valley, Mayhew and Carter said.

The national economic slowdown has resulted in belt-tightening in businesses and government agencies. This has resulted in fewer business travelers coming to Graham County to conduct business at the mine, the prisons and the hospital.

Mayhew does not anticipate much relief during the winter tourist season. Most winter visitors own homes in the area, so they do not stay in local hotels. The few that do rent hotel rooms are likely not to do so this year because of the shaky U.S. economy.

“It’s (out-of-state travel) the least of their priorities,” Mayhew said.

Carter agreed, saying that few families come to the Gila Valley in the winter because their children are in school. Unless there are big reunions or college ball games, there are few visitors to fill the hotel rooms.

Along with a slowdown in business at the hotels, business has slowed at local restaurants. Mayhew said The Manor House is taking steps to ease the effects of the slowdown.

“We even offer our customers coffee and tea for 79 cents,” Mayhew said.

Comments

42 comment(s)

    Government Employee wrote on Nov 30, 2008 10:12 PM:

    " As someone who travels for work, I want to say something about the main hotels. I've been coming here for years. When it got busy and it was impossible to get a room. Only one hotel still offered the $60 rate that the GM pays. By doing that I didn't have to pay the difference out of my pocket. The rest offered me a discount to $85 or $90. So some of them were still courteous even though they could have ripped me off like the rest. "

    Contractor1 wrote on Nov 14, 2008 3:37 PM:

    " Very funny, I hope you get everything you need for Christmas.

    It was a conservative that put us in the economic situation we're enjoying now.

    If liberals are so bad, why did they bring us here to do all this work?

    BTW, your approach to a green planet isn't quite what we had in mind! "

    Jed wrote on Nov 14, 2008 2:33 PM:

    " Not sure what the last word was on your last post. I suggest putting down the crayons and pick up a dictionary. I would rather have green water here than a liberal. "

    Contractor1 wrote on Nov 14, 2008 1:23 PM:

    " Why thank you Jed, and I hope y'all don't starve out here in this God forsaken wilderness.

    Just keep pumping that good green water into your inviroment. "

    Jed wrote on Nov 13, 2008 5:06 PM:

    " See you later contract dude. I hope we can make it without you. "

    Contractor1 wrote on Nov 10, 2008 7:15 PM:

    " G.W. Bush was driving when we had this crash of our economy, this makes him to blame.

    I also have problems with democrats, but the republicans take the cake when it comes to taking advantage of the working stiff. "

    Copy and Paste wrote on Nov 10, 2008 5:11 PM:

    " This comes from another post:
    "We as a nation are being punished by God for our collective lack of morals!!!"

    I can only imagine the same goes for Gila Valley. You people need to straighten up and fly right; stop letting the gays marry and the hippies smoke pot and all your troubles will go away.

    You're welcome. "

    just so ya know wrote on Nov 10, 2008 4:18 PM:

    " It is very hard to have a battle of wits with unarmed people.

    What goesaround, comes around. "

    jodis wrote on Nov 10, 2008 1:54 PM:

    " What hotel provides free lodging if there is a death in the family? I have a large family and noone ever offered us free rooms when there was a death. Maybe only if they have a certain last name or belong to a certain congregation? Who knows. It's good that they cater to the social events. It would be great to know what hotels cater to our needs. "

    Shameful uninformed wrote on Nov 9, 2008 1:06 AM:

    " I have been reading the comments of our locals and find it very disturbing. I personally know the folks that own the Manor House four new hotels. This couple moved here 32 years ago and brought nothing but goodness to our community. Dean and Mary Lou are the hardest working couple my wife and I have ever met. They have unselfishly shared there vision with this valley. They have risked everything to build their businesses and accepted a lot of financial responsibilityand provide @ 120 jobs. The American dream is for all who want to work. "

    PimaTwo wrote on Nov 8, 2008 9:07 PM:

    " When the economy was going up everyone loved the policies of the current president. Oh wait if it goes up they love him but they hated him and it still went up. Now that the economy is going down we all hate him so what should be the outcome?
    We should hate him so it will go back up but that is what is happening right now.
    Blamming one person on this earth for an earthly problem does not make any sense. It was OVERSIGHT that broke the system. Now who's to blame? "

    Harbinger wrote on Nov 8, 2008 11:34 AM:

    " Now all you have to do is sit back and wait for the "Carpetbaggers" to come in and buy you all out at ten cents on the dollar. "What goes around comes around" isn't just a veiled pessimism, it the rule this world exists and operates on. You get out of something, exactly what you put into it. "Easily obtained, easily lost." If I were making choices, I'd be looking for greener pastures. Ever hear the story about the "Grasshopper And The Ants"? "Winter" is upon you. "

    Contractor1 wrote on Nov 8, 2008 10:39 AM:

    " In reading the comments here I fail to see anyone mention the root cause of our current economic situation.

    The Bush administration’s fail economic policies have sent our economy into this tail-spin.

    Couple that with the out-and-out greed of the local business people and it's hard to feel sorry for the poor profit mongers.

    If I sound angry, perhaps it's because I'm out of a job and my retirement investments are only worth about half of what the were only a short time ago.

    Thanks Mr. President, I’m sure your retirement is just fine "

    Not Impressed wrote on Nov 7, 2008 6:06 PM:

    " To "Know Them Personally" - Yeah, Vegas does the same thing. It's called incentives. No self respecting hotel manager wouldn't do the same. It's figured into the budget. It also reaps rewards later when word gets around and you start collecting on the extras and returns. Word of mouth is the best advertising. Unfortunately the negative gets around just as fast or faster. There's an old saying, " Only a buzzard feeds on his friends." There's no such things as "friends" in business. And it's the bottom line that counts. "

    Know them personally wrote on Nov 7, 2008 3:59 PM:

    " Say what you want, but I know personally that the hotel owners you probably are referring to have donated rooms to enitre families for Numerous Funerals, The Miss Graham County Pageant, Cowboy Poet's, American Legion, Vietnam Wall Memorial, Not to mention all the gift certificates and items donated for local fundraisers, scholarships, EAC Foundation, School Fundraisers, Woman's Club, Chamber of Commerce, United Blood Drive, Boys & Girls Club, Girl Scouts, not to mention to individuals who just needed help. Dont judge till you know the whole story. "

    Been There wrote on Nov 7, 2008 3:54 PM:

    " FMI as well as the local hotels and restaurants are responding responsibly and quickly to the economic situation presented to them. Remeber most of these businesses have been here through hard mining times, the strikes, bad economy and floods and been there to house all. "

    In the Industry wrote on Nov 7, 2008 3:52 PM:

    " I don't know where u were calling but I am not aware of $150 or $200/night room rates unless u needed to stay in a suite because all other rooms were full, which isn't our fault. And I don't see anyone complaining about the fact that the major hotellier in town offers fully paid benefits to thier full time staff or about monies donated to local charities and events. Should they lower their rates and lower the wages to minimum wage. It seems noone is happy no matter what you do. "

    Toni wrote on Nov 7, 2008 3:41 PM:

    " It seems to me that everyone benefited from the booming economy. There were better paying jobs. Companies were offering full time positions with benefits. Now with the layoffs of the contractors at FMI everything has slowed down. Companies have to re-think business practices. I am sure a lot of people and companies will be affected. I know my family will be eating out less and so will many other families. This too will have an impact in our economy. "

    real2all1 wrote on Nov 7, 2008 3:15 PM:

    " Sad to say what comes around goes around. Money, lots of people want it and will be willing to hurt people in the process to get it. For all you "LANDLORDS", this ones for you. Who are you going to get to pay 1,000.00-1,600.00 a month for your rental home? "Hotels", who are you going to get to stay in your hotel for 150.00-200.00 a single night? Now that the "Contractors" are gone, where ohh where are you going to find the extra money to continue to live "High On The Hog"? Good luck. "

    johnson wrote on Nov 7, 2008 2:26 PM:

    " I don't think people realize how many local people were employed by contractors. Not all the contractors are from out of towm. And FMI employees are not safe-its all about the numbers. The way F.M.I went about this was horrible. No notice-ruined alot of peoples businesses and lives-and they don't care-they have let down a town that has supported them-maybe some of their upper management should cut their HUGE paychecks a bit and save 100s of jobs. "

    jodis wrote on Nov 7, 2008 12:13 PM:

    " I agree, the hotels have become greedy. Safford, being a small town, should not charge over $75 a night, no matter if the hotel the best in town. People who travel through and visit here cannot pay those prices. I have discovered that people with family members in the hospital are actually staying in their cars, because the hotel rooms are so high. Greediness is going to close their doors. "

    Karl Hungus wrote on Nov 7, 2008 8:37 AM:

    " Ah Capitalisim at its finest. You guys mean to tell me that if you were hotel owners that you would still be charging 60-70 bucks a night for a hotel room. Get real, It's simple economics, supply and demand. Now that demand has gone down im sure the prices will come down too. "

    your neighbor wrote on Nov 7, 2008 8:18 AM:

    " To roomless.. sorry about your experience here but you just went to one hotel, you should have tried another one. There are cheaper hotels in this town. "

    PimaTwo wrote on Nov 6, 2008 8:36 PM:

    " When you are born and raised in the Gila Valley you know exactly what Erin is saying.
    The mine jobs have always been here it was just in Morenci and being planned to be in Safford. Now it will tapper down in Morenci and end up in Safford. The overall result and pay is the same.
    Those that jumped at the chance to make easy quick money will have to live with the outcome. Just like the stock market right now. There is no place for greed in the long run. "

    Gobbeldegook wrote on Nov 6, 2008 6:13 PM:

    " I think that all of the businesses here are crooked and should be ashamed of them selves for ripping us all off. Having said that, I am a native and want all the out of towners to remember that Phoenix, Tucson and Bowie has jobs. I understand that the Military has some openings as well and now that Hussein Obama is the President, you wont have to worry about war. "

    Erin wrote on Nov 6, 2008 3:37 PM:

    " It is really sad to see so many out of work. the truth is the locals are not going anywhere. we love this community and we will stand by it like we always have. it's important to remember that this town will not die off. it will continue to survive even thrive regardless of the down turn. there are communities in alot worse shape then us. people are still going to shop work and live in Graham co. as we always have. as a community that is strong and has a strong base of goodfamilies bond together. "

    interesting wrote on Nov 6, 2008 3:00 PM:

    " It is interesting the cost of housing increased dramatically plus everything else was going up off of pure speculation. The average wage per job in Graham county is only 24,800. Now how can people that live there afford this kind of housing. The people are going to live with the mine and die with the mine. The county needs to look into bringing in other business maybe manufacturing plants or something else. The businesses they bring in can't rely upon graham counties economy for business. Look outside the box ! "

    Not Impressed wrote on Nov 6, 2008 11:20 AM:

    " Coffee and Tea for 79 cents . . . Oh . . . when will wonders cease? Why don't you list your rates and the percent you increased them in the last two years. That goes for every business in town. There isn't one that hasn't taken advantage of the influx of warm bodies. Even the locals who did get employment are whining, when they weren't working in the first place, as well as those who "didn't want them here. " You all made a killing, but forgot "you dug your own grave as well." "

    roomless wrote on Nov 6, 2008 8:21 AM:

    " My husband and I came into town one night not wanting to drive on to Willcox, we stopped at 12:30a.m. and were told the room was $100 (this was a few years ago), we drove on over to Willcox. They were not willing to lower the price so they ended up getting nothing. Yes, greed has got the hotel and resturant industry in Safford. Want to bet they don't lower there prices.
    Recent Safford Alumni could not believe the price of rooms here . "

    localgal wrote on Nov 6, 2008 8:11 AM:

    " I totally agree with those who are saying that the greediness of some local businesses (especially the hospitality industry) is coming back to bite them in the rear. How many new motels do we have? Why? I feel sorry for those who have lost jobs recently, but will not shed a single tear for the moneygrubbers who have been raking in big bucks and are now whining because they are losing their cash cow. "

    In Agreement wrote on Nov 6, 2008 7:54 AM:

    " I agree with other commentors- many people have taken advantage of the Copper Boom. My family in Sunrise just had their rent raised almost 300.00 with only 30 days notice of the change! Maybe hotels and landlords should try the tactic the Manor House is trying- LOWER YOUR PRICES, "and they will come". "

    Annoyed wrote on Nov 6, 2008 7:34 AM:

    " For some of you this doesn't matter. But, for some of us it DOES! Alot of "locals" didn't want the construction here to begin with. So, I'm sure you sit on ur high horses and laugh. But, the people who have come to this town to work are not the only ones who are being hurt by this! There were alot of "locals" who are now jobless or fixing to be. No one has really won in this situation!! "

    disghusted wrote on Nov 6, 2008 1:26 AM:

    " Yes $200 per night is a rediculous price for the standard room at Saffords newest hotel. That same room in Phoenix would go for $110. Can you say GREEEEEDY?. "

    wow wrote on Nov 5, 2008 8:40 PM:

    " we had 2 girls come to town to take care of delicate family business. we called around as they wished a room.. the quote we were given... $200.00, for one nite.. GREEDY... so shame on all of you that let the love of money get the better of you. the girls opt to sleep on the floor for free..outsiders arent always the ones to give the town a bad name. some that live here do pretty good job themselves. "

    Joann wrote on Nov 5, 2008 6:26 PM:

    " Carlota Copper Co. (west of Miami) is still hiring equipment operators, haul truck drivers, electricians and laborers. Might be a good time to move or commute. "

    Karma at its best wrote on Nov 5, 2008 3:56 PM:

    " Safford will not become a ghost town, it will go on just as it always has. There are other things to come for our community and we will be ok. However while I am upset for the familys of the people who have lost there jobs I am not so upset for the landlords and hotel owners who have been making it impossible for people to afford to live in our town. 1600 a month for a 3 bedroom house? 150 a night for a hotel room? Your own greedyness has come back to bite you. No sympathy here. "

    Frank wrote on Nov 5, 2008 3:38 PM:

    " The State Prison in Safford is still hiring and requires no experience. We start at $16/hour and there will be no lay-offs. "

    bwana wrote on Nov 5, 2008 1:53 PM:

    " They are not "victims of the mining industry"...They are victims of their own opportunism. WHo doesn't know that the mining industry is whimsical at best?
    Be glad you didn't turn all your cotton fields into housing projects or you'd be a ghost town with no visible means of support...derelict. "

    ma wrote on Nov 5, 2008 1:06 PM:

    " It's hard to feel too sorry for the Gila Valley businesses suffering from the decline in contractors. Their presence was a " boom", surely you didn't expect it would last. Some of you raised your prices sky high so that many of us "locals" could no longer afford to shop at your store, or eat at your restaurant much less stay at your motel. Your attitudes in many instances changed too. Now comes the expected "bust" and you're hurting. Please think about this the next time around. "

    karen wrote on Nov 5, 2008 12:23 PM:

    " Now maybe the local hotels and the landlords will stop price gouging the public. This is a long time in coming. I cannot feel too much sympathy, except for the hotel and restaurant workers who will be left jobless. "

    layoffs wrote on Nov 5, 2008 12:22 PM:

    " We will become another victim of the mining industry just like all the old ghost towns left standing after prices dropped! "

    wondering wrote on Nov 5, 2008 12:19 PM:

    " now that the mine is slowing down all the local hotels that were charging an arm and a leg for a room are suffering the pay backs .... it seems carma does come back at you.......... the construction workers that were staying in these places were often treated rudely...... "

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