This month, the Oregon Transformation Newsletter, published a series of interviews with Oregon CEOs about their efforts in the coming months to keep their workforces whole and their companies intact. We plan to publish a series of articles highlighting excerpts from those interviews:
Dan Yates, CEO, The Portland Spirit
If you are a business owner, how financially capable is your business of surviving this pandemic crisis? What measures have you taken to keep your workforce whole? Do you plan to hire back your staff, or will you be able to keep your workforce relatively whole through the crisis?
The Portland Spirit is in its 26th year of serving Oregon and SW Washington. We have five vessels and had until now about 200 employees. Last Monday we laid off everyone but salaried and a handful of hourly employees (leaving us about 35). We have canceled all cruises through April 30. Everyone, but owners, are on full salary currently. We are paying health care for everyone, even those laid off. We provided information of companies hiring and how to apply for unemployment. We have cut spending by 75% and looking for another 10% in savings. We are planning on paying our staff through May and health care for the duration. This weekend we restricted staff to our office and vessels to essential personnel and laid off another 10 people. I think we can remain shut down until about August and ramp up pretty quickly. The issue is not surviving to reopen in 2020, but rather surviving the long winter of 2021. We burn cash in our slow months and we will have burned all of our reserves surviving no business in our main season. The Spirit will get through the slow season, but we will need to take drastic measures to get through that slow time next winter. The real question is how many businesses will still be operating this time next year. I have many long-term hourly and salaried employees that take pride in their work at the Portland Spirit family. I have no doubt I will retain the vast majority of them when we reopen.
In the last two decades, Americans have been through 9/11, the 2008 financial crisis, and now we face this global pandemic. How much worse is this crisis? How are you personally dealing with your own anxiety?
The Portland Spirit weathered both of those crises with sacrifice from our employees and solid management. We survived a four-year wage freeze to overcome the 2008 crisis. This pandemic is different … very different. At least a week after 9/11 we went back to work and during the 2008 crisis we never stopped working. We had work to distract us and give us a sense of purpose and hope. This pandemic was so fast in its devastation. One day we are open and running cruises and feeling good as we had record January and February months (not big months, but still up over previous years) and looking forward to a record year. Then wham. We are closed – completely. With no sense of when we will reopen. Some customers have asked for refunds, but the vast majority have been terrific and have asked for future credit or gift cards.
Personally, I am conflicted as I was in Europe for a conference and was scheduled to fly home on the day Trump announced closing off Europe. It was chaos getting home and going to the office the first day back and several employees were very nervous being in the same building with me. Several high-risk people were sent home with pay, and I have self-quarantined myself. That has made the company response even more stressful for my team. My leadership team is not good at doing nothing, and since we have identified all potential savings and responses we have very little to do. Gardening, puzzles, reading, computer war games, drinking wine, and being angry at the TV are about all I do. I go daily to the office and stay current with work, maybe two hours of work. Most of my salaried staff are working remotely. I am writing news updates to all my staff via our payroll system so I can keep in touch with them.
What’s the most surprising response to this crisis that you’ve seen either from friends and family, local and state government, or the federal government? What’s the most disappointing response that you’ve witnessed? What’s the most inspiring response that you’ve noted so far? What is uniquely positive and American about our united response?
I have been very disappointed in how young people have responded to this crisis. I did not understand why they are so unimpressed with the need to social distance until I heard a friend of my wife who is a math professor. The professor was complaining that her college students cannot do basic percentage work in their head. They have no intuition on how percentages work. She starts each new college class with asking how many students know what 50% of 20 is. Almost no one can answer it without a calculator. So when the newscasters tell the young that up to 3% will die from the virus and 40 to 80% of the U.S. population will get the virus … it means nothing to them. They hear 3% and think, “That is a small number … who cares? Let’s go party.”
If you would like to read the entire interview, click on this link at The Oregon Transformation Newsletter: