Oreck brushes off the Gulf Coast

Martin Savidge Correspondent • Profile

LONG BEACH, Miss. - When Oreck reopened its plant just days after Katrina devastated Long Beach,  company officials were hailed as heroes.

"What we're doing here, I think, is basically just helping the area get back on its feet," said CEO Tom Oreck on Sept. 9, 2005.

Now you can kiss that goodwill, and Oreck, goodbye.

It was a painful decision, says Tom Oreck. The company says post-Katrina problems — skyrocketing insurance rates, a labor shortage and lack of housing — have made business too difficult.

So it's moving to Tennessee, costing Mississippi 500 jobs — another bitter blow to the Gulf Coast.

Long Beach lost about 40 percent of its businesses due to Hurricane Katrina.  Since then, some have come back but many have not.

"I think the timing was not good," says Mayor William Skellie Jr. "The message was a poor message sent, you know, for this area."

And there's fear that it's more than a message. Oreck's move might be the start of a trend.

Does Tom Oreck think there are other companies considering doing what Oreck is doing?

"I know there are," he says.

It isn't just insurance that's gone up. The competition for workers has driven up wages. Jobs that paid $5.15 an hour before Katrina now pay $7.50.

Off camera, state officials admit they're worried. On camera they sound like this:

"We are talking to the businesses here," says Gray Swope with the Mississippi Development Authority. "And, in fact, there are several businesses here who are doing quite well."

Like The Cajun Crawfish Hut. Katrina knocked the old place flat, but now Gus and Donna Harris have relocated, employee 23 people and are open seven days a week.

What would they tell Oreck?

"I think that I would probably try to stick it out, but that's me," says Gus Harris. 

Oreck says at least it's keeping jobs in America, unlike the company it's replacing in Tennessee — it's moving its manufacturing to Mexico.

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