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SOUTHEAST U.S.
From Site Selection magazine, September 2011
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In This Together

Wrangler and the small town it supports both
aim to recover from a devastating blow.

SOUTHEAST U.S.
Three months after an EF-5 tornado destroyed its facility and three quarters of the town it occupies, Wrangler parent firm VF Corp. has decided to rebuild and expand in Hackleburg, Ala.
by ADAM BRUNS
T

he center of a tornado is characterized by a dramatic drop in pressure. It's the twister's aftermath that brings high pressure to bear.

This summer the pressure was intense for VF Corp., whose major Wrangler distribution center in Hackleburg, Ala., was leveled along with an estimated 75 percent of the town by an EF-5 tornado, part of the swarm of late April twisters that swept across the Southeast, killing more than 322 people and causing an estimated US$5 billion in damage, $2 billion in Tuscaloosa alone.

Two hundred and forty-seven of those fatalities occurred in Alabama, where 44 of 67 counties had tornado damage. Hackleburg, a town of 1,500, lost 18 people — one for each street corner of its downtown — and 25 died in Marion County overall.

The town also lost, at least temporarily, a sizable portion of its business sector, 27 establishments in all. The 375,000-sq-ft. (34,840-sq.-m.) Wrangler operation represented 50 percent of the town's tax base, and employed 150. VF mourned the loss of one of its employees, and joined other organizations in helping the town however it could. Wrangler spokesman and star NFL quarterback Brett Favre, who'd experienced a tornado and Hurricane Katrina in his hometown of Kiln, Miss., paid a visit to employees, helping rebuild spirits if not walls.

In May VF said it would decide within 60 days whether to rebuild. The company meanwhile was using an old sewing plant in Hackleburg for both work and employee services, and transporting three vanloads of Hackleburg workers a day to a facility in Holly Pond that it had shut down in early 2010 but had not yet sold. Out of the 150 who worked at the decimated facility, 135 chose to keep their jobs with VF.

In mid-July VF said the final decision would be postponed until the end of the month. Finally, on the evening of August 1, the community let out a collective sigh when VF announced it had decided to rebuild in Hackleburg, and to add 50 jobs to its payroll in the process. VF will break ground on the new construction in the second quarter of 2012 after site preparation, building requirements, design and other elements are finalized. The target date for completion is mid-year 2013.

"It has boosted morale and sparked increased interest in developing a new town image for growing a bigger and better town than before," wrote Hackleburg Police Chief Kenny Hallmark in an email just after the decision was announced. He was one of the leaders in the tornado response effort and one who is keenly aware of how economic development and safety and security are linked. "It is truly great to see a company believing in America again and not running to somewhere else that might seem cheaper to produce their products. We are blessed!"    

During construction, VF will continue to provide work for a majority of the 150 displaced associates at the sewing plant in Hackleburg and at the facility in Holly Pond, but the Holly Pond facility will again be shut down for good once the new facility is opened.

Sam Tucker, vice president of human resources for VF Jeanswear, has been with the company for 33 years, including time in manufacturing and distribution. He says workers and citizens were elated and relieved to hear the news, in part because there were a lot of other businesses sitting on the fence. Two major retail players, Piggly Wiggly and Dollar General, had indicated they were waiting to see what VF decided before making their own rebuilding decisions. Dollar General has since indicated it expects to come back by October.

Factual Analysis, Emotional Ties

Tucker says the first call the company got on April 27 was about minor roof damage at the vacant facility in Holly Pond. He says there was relief that it had been the vacant building.

"Then we got a call that Hackleburg had taken a direct hit from an EF-5," he says, which brought winds in excess of 210 mph. "You can't really plan for something that strong. It was frankly hard to believe that it was completely destroyed. But we got eyewitness accounts to that effect. We called and secured a plane, and contacted our trucking facility in Tupelo and let them know there were things people would need, such as water and other supplies. We reached our distribution center manager [Wade Hagedorn] around seven that night, and learned about the fatality."

Tucker_Sam
Sam Tucker, vice president of human resources, VF Jeanswear

Hagedorn had made the much-praised decision to call the afternoon shift to tell them not to report, and he was one of the 13 people in the plant when the twister hit. Another of those 13 was Linda Knight, 57, who died from her injuries.

Tucker says a group of eight flew over from headquarters, but police were not allowing anyone into town, and half returned to manage things from Greensboro.

"But we learned on the ground what the folks in Hackleburg were facing," says Tucker. "The infrastructure of the town was wiped out. The city had no communications, no computers. We went to Walmart and bought computers for them, and ordered some high-powered mobile phones for them out of Birmingham. We opened the sewing facility as an emergency response area, providing things like water, diapers, flashlights and batteries. We brought in grief counselors, and just provided a place to come and get what they needed."

Extra uniforms and equipment were purchased for police and other first responders. Clothing was shipped in from all of VF's brands, and VF employees donated approximately $100,000. Meanwhile the company's operations team went to work to source more product and use other facilities, including the other four distribution centers in the division, located in Mocksville, N.C.; Luray, Va.; Seminole, Okla.; and El Paso, Texas.

Could VF's decision-making process have been hemmed in by its Wrangler brand's All-American hometown image? Was Hackleburg the right business option, as well as the obvious sentimental choice?

Tucker says team members from operations, distribution, finance and tax departments were on the decision-making team.

"From the beginning, because we had a facility in Hackleburg that was very efficient and doing a great job for us, the idea was 'Why would we not rebuild?'" he says. At the same time, "what we tasked this group with was this: 'Hard as it is, we don't want to make this decision on emotion. We want reasons based on facts.' And that's what happened."

Those facts include a location close to Memphis and well situated for shipping to the Southeast; and a trained and veteran work force. Tucker says the company didn't seriously entertain building a brand new facility elsewhere, but rather looked at whether it could utilize other existing facilities to absorb the capacity shortfall. They looked at 18 different scenarios, "but at the end of the day, the numbers said Hackleburg was the best decision for us financially."

Tucker says the fact that 135 people stuck with the company under conditions that included less than 40-hour weeks and a 140-mile daily round-trip commute meant a lot. "They continue to do a phenomenal job in less than ideal conditions," he says.

That long commute to Holly Pond continues will continue for some two years until the Hackleburg facility is ready. But Tucker says the Holly Pond building is effectively still on the market. "We have plans to use it, but if we had a buyer, obviously we would try to work through that. It would clearly be beneficial for the community of Holly Pond. If a company came along, we could look at other options like leasing space somewhere else."

A $30-million incentive package for the rebuild includes state and local tax abatements, community development grants and training dollars. Tucker says state and local authorities and elected officials were there from the beginning offering support and clearly communicated "that they wanted us to be there."

The town still suffers: Whole subdivisions are wiped clean to their foundations. A temporary school has been erected using trailers. The high school is due for demolition and relocation. Its football team will be playing its games this fall in nearby Hamilton, due to debris embedded in the field.

"Hope and trust and pray to God you never see the town you live in get destroyed," says Mayor Doug Gunnin, who rode out the tornado with a dozen others in the downtown jail cell as the police station around it was swept away.

'Plan for the Unplannable'

Site selection consultant Robert Pittman is senior principal at advisory firm Janus Economics, named for the Roman god of doorways to the future. He says screening during a site selection process for weather disaster risk is a tricky exercise, and comes down more to subjective feelings than data. Whether the risk is real or just perceived, either way it can hurt ground-zero communities.

Once it has struck, however, he says the opportunity for emerging leaner and stronger is ripe. "One thing I think can help a corporation make a decision is a disaster management process," he says, citing Entergy Mississippi's leadership after Katrina as an example. "Not one on paper they'll dust off when the hurricane hits, but a real county-wide program. You can show examples of how companies can be back up and running."

"Every emergency is local," says Dawn Shiley-Danzeisen, spokesperson for the International Association of Emergency Managers. "You have to plan for the unplannable and think about the unthinkable."

Such thinking was key to the fast response in Hackleburg, says police chief Hallmark.

"We train and train, and that is sometimes overlooked," he says. "The very week before the tornado hit, we were in Lake Eufala training with Homeland Security to work disasters. The state of Alabama is above the curve when it comes to disaster training. I got shot in 2002, and I had always heard that you'll respond to a high-stress situation in the way that you train. It happened in the shooting, and on April 27 it was the same way. A lot of it still goes back to common sense. The town of Hackleburg took care of itself … People have a misconception that FEMA will do this for you. All FEMA does is get financing and set up the structure. It's up to you to do all the responding and do your work."

Tucker says while the company has a focus on disaster recovery planning, "Anytime you have something like this happen, it's a bit of a wakeup call. It's one thing to have a facility out of commission because of loss of power, but to have one that's completely wiped out is difficult to plan for."

He says an employee asked if the new building would have a storm shelter.

"Yes, we want to build a strong and secure bulding," he says, but "this one was. When you have an EF-5 tornado hit you, I'm not sure you can build for that. Our folks followed procedure exactly, got under desks, in the interior, and it just obliterated the bulding. The storm actually picked the entire building up, tractor-trailers were sucked in underneath the building, and it slammed the building back down and threw tractor-trailers on top of it."

He says the procedure and decision that sent people home early in the day was crucial. But a point to keep in mind for any company is how to contact people on that next shift about to come in, especially if normal communication channels are down.

"If we want employees to stay where they are, how can we ensure we can get in touch with everybody?" asks Tucker. "Those are some critical things as we go back that we can make sure we do a really good job at."

But he has nothing but praise for how VF staff members performed.

"Our folks pulled together, and in the first 24 hours were mapping out how we were going to fill the gap, and where we were going to backfill the goods from. They did a great job. Was it a perfect blueprint? No. But we put our best folks on it, and they absolutely came through."

So did VF, as far as the area's economy is concerned.

"Clearly, from an emotional standpoint, everybody wanted this to happen," says Tucker. "We owed it to Hackleburg and to the corporation to complete the analysis without emotion. But that didn't mean all of us didn't hope that this was where we ended up."

Small Towns Face Big Challenges

VF's decision was stoked by disaster, but it took place against the backdrop of a slower-moving calamity: the shutdown of rural America. Recent research from the Population Reference Bureau pegs the nation's rural population at 16 percent, down from 72 percent a century ago. Airlines are cutting regional flights to smaller airports.

But small towns aren't gone yet. You know you're in one when your new lease gets signed by the mayor. You really know it when the mayor needs the city clerk to witness it, so he calls his mother.

David Thornell, president and CEO of the C3 of Northwest Alabama Economic Development Alliance, recalls that story of leasing the organization's new office in the nearby town of Guin last fall with a grin, as he drives through the rolling countryside. It's the kind of area where a lot of businesses still close down on Wednesday afternoons, where everyone in a room in Hackleburg has had multiple relatives who worked for Wrangler. As city councilman James Anglin puts it, "My first bicycle came from money that came from Wrangler."

It's the kind of town where people climbed through the windows of the destroyed auto supply and hardware stores after the tornado, not to loot, but to get what they needed and write down what they owed.

The area is also home to, ironically, several manufactured-home manufacturers whose operations and end products were damaged by the tornado, but whose products were also in high demand immediately afterward. Even so, several sit empty, victims of dried-up loans for mobile homes because of the housing crisis.

"Every business we had was destroyed other than the mobile home manufacturers," says Hallmark. "Their volume of work increased to try to help take care of the orders they already had, plus additional units to put out for FEMA … our local plant is one that makes the FEMA units."

Other major employers include Showa-Best, a maker of medical gloves that employs 257 in Fayette County; NACCO Material Handling and Weyerhaeuser in Lamar County; and Continental Conveyor & Equipment and NTN Bower in Marion County. The area's manufacturing work force stands at about 18 percent of the overall work force, substantially higher than the national rate of 10 percent.

A billboard announces that call center firm Sitel is hiring over in Hamilton. In downtown Guin, an old Munsingwear textile plant sits empty, though some promising mixed-use redevelopment ideas are being floated. Down the street, a successful 3M Traffic Safety and Systems plant, which makes luminescent and reflective safety materials, has been there for 56 years. It was expanded most recently last year with a $7-million investment, and for the expansion before that one there were 100 applicants per open position. The plant now employs 300, and this summer was getting ready for a visit from the company's president.

A little farther down the road, a working drive-in movie theater is still showing first-run movies, and in nearby Fayette they still make Golden Eagle Syrup, "the Pride of Alabama since 1929." The small-town attitude is evident in Thornell's own new offices, where furniture donated by Alabama Power was recently delivered by a board member's son with a U-Haul.

As he heads over to Hackleburg after a steakhouse lunch, three months to the day after the tornado touched down, Thornell recounts how the storms changed his world, and the world of most people he knows.

"People will be walking through woods for years finding things in trees that shouldn't be there," he says quietly.

Hackleburg had just recently updated part of its downtown with new sidewalks, planters and other amenities. Now, says Thornell, there is talk of whether it's worth doing it all over again, especially when the main traffic runs by on Hwy. 43 a few blocks over.

But the highway project that's looked to as the area's real savior is the 93-mile (150-km.) stretch of forthcoming Interstate 22 from Birmingham to the Mississippi state line. The highway is complete and in use except for a couple miles in Birmingham that will not be completed until the final link in the chain, a $241-million interchange at I-65, is done in four years' time. And that will not be done until the mix of federal and state funds is worked out. Blank blue signs along the gleaming but eerily empty highway wait for the names of restaurants and service stations.

"This area is under-recognized and under-appreciated because we're totally rural, but we're surrounded by major metros of the Southeast," says Thornell. "I-22 is an Interstate you won't find on the GPS, but it's open and operating. It's a blank canvas for people to come in and take advantage."

Some stand ready to assist. Town father and businessman Hugh Don Conway (cousin to Site Selection founder McKinley Conway, a Hackleburg native) plans to conduct a training conference on starting up and developing a business. Police chief Hallmark says some studies have shown significant increases in population and business in towns struck by tornadoes. He says mayors and police chiefs from other towns that have experienced disasters have reassured him unanimously that "it will get better and bigger and stronger than we've had in the past."  

"Hackleburg is definitely a slice of the Old South," says Thornell. "The tornado changed the way things look, but people have not changed at all in the way they act. Many places would do well to follow their lead as they go through each day caring, sharing, working, laughing and relaxing with each other as neighbors. It is not a bad approach to life."


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