A long road to reopen New Orleans companies
Small businesses are scrambling to fix damage and find workers. Here's the story of one pie company.
It's 8:30 in the morning, a time when Hubig's bakery normally would be filled with the smell of steaming fruit and frying dough as some 20,000 pies and turnovers begin to make their way to customers all over southern Louisiana.
Instead, Otto Ramsey, an owner of the 100-year-old New Orleans institution, is trying to get his refrigeration system up and running. At the same time, two sheet-metal fabricators are explaining how they intend to fix his ventilation system, which was damaged by the winds of hurricane Katrina. And the phone keeps ringing as customers ask when they can start devouring sweet potato, apple, or pineapple pies again.
The company's travails are typical in the city, which used to have 12,611 businesses, 97 percent of them with fewer than 100 employees. Like Hubig's, they are battling their insurance companies, trying to get electricity reconnected and potable water running, and scrambling for money. Most are trying to locate missing employees, or anyone who wants to work. They know they have to get back in business as soon as possible or face the end of their entrepreneurial efforts.
"The national data, after a crisis like this, such as the Northridge earthquake [in southern California in 1994], finds 40 percent of small businesses just go away," says Tim Ryan, chancellor of the University of New Orleans and an authority on small business. "But in New Orleans, it could be worse because the breadth of the damage is much larger. Business has been closed longer. Residents [have been] displaced for a longer period."
Indeed, many small-business owners are trying to decide whether to reopen. Mary Logsdon and her daughter run La Spiga, a bakery and cafe. The business survived, but both lost their homes and now live in Baton Rouge, a two-hour commute.
"My daughter's children are enrolled in school in Baton Rouge. We're not sure how much business is there, and my biggest concern is that we're not sure what will happen to the levees," says Ms. Logsdon.
Still, La Spiga is scheduled to have its gas turned back on this week. And, Logsdon's daughter, Dana, says they are now "leaning" toward reopening. "We're trying to figure out how to do that," she says. "Probably the earliest we could do it full time is the fall of 2006."
For some, the economic damage from the storm has already wiped them out. That's the case for Tracy Ewell, who had her own store, Tracy Ewell Cosmetics and Skin Care. When the electricity failed, her inventory spoiled. Now, she's left New Orleans and taken a job in Atlanta. "I guess there was something else in store for me," she says.
Time is of the essence for many entrepreneurs, says Tim Williamson, president of the Idea Village, a resource for small businesses in New Orleans. "The question is how to stay alive for the next 60 to 90 days."
Mr. Ramsey and a partner have borrowed money. But without any cash flow, he says, "I am desperate for dollars."
With such limited funds for many companies, both the city and state have been trying to help. Last month, the Louisiana Department of Economic Development announced it had used up $10 million in a bridge-loan program that went to 407 businesses, including Hubig's. The city, with even fewer funds, has established a mayoral commission that includes a small-business segment. It has been holding weekly meetings with local entrepreneurs to give the group input.
At a recent meeting, it was clear that finding employees is a major concern of small businesses. Anthony Patton, a businessman who also works with the mayoral commission, asked the roomful of owners how many workers they needed. He counted 155 unfilled jobs.
"How do we find high-quality workers?" asked Matt Wisdom of Turbo Squid, a software development company in the market for four people.
Some are slowly finding their way to the city. Back at Hubig's, Otto Lambert, who has worked at the pie company for 20 years, walks in the door - the first time he has returned to the bakery since the city flooded. His own house in the Ninth Ward was flooded, so he moved to Mississippi. After some good-natured kidding, Andrew Ramsey, son of Otto, informs him, "We're reopening in early December."
At least that's the plan at the moment. Up on the roof, the large exhaust system has now been replaced. The refrigeration system is working. And the bakery's insurance company has sent a $100,000 "advance" on the damage claim. Yet more meetings with engineers and inspectors are scheduled.
Today, the biggest issue facing the company is cracks in the side of the building, possibly caused by the concrete building shifting. "The building did a little jog," quips Otto Ramsey. "If they say the wall won't collapse and it wasn't caused by the hurricanes, we could be producing pies in a week," says his son.
Hubig's has been producing pies at this site for nearly 100 years, ever since a Dallas businessman and baker, Simon Hubig, came up with a recipe that runs the pies through hot oil to fry and then glaze them.
The pies - which were sold at gas stations, Wal-Marts, and grocers - have become part of the city's gastronomic fame. Southern Living magazine opines the pies are "the upper crust of yummy."
The last time the company made pies was the day Katrina was expected to hit New Orleans. Andrew Ramsey and a skeleton crew baked 10,000 pies to hand out to emergency workers and first responders.
Now, when the phone rings, it's often someone craving a fruit turnover. "We have a very loyal customer base," says Otto Ramsey. "As the grocery stores reopen, they call us."