Atlanta’s major business stories of 2010

So this is what a “jobless recovery” looks like. Pretty ugly.

Hopefully, next year we’ll see more of a recovery and fewer jobless. The good news is that many economists are predicting just that.

But let’s not get ahead of ourselves or we’ll neglect the local business stories that made this year memorable. There were plenty.

Without doubt, nothing comes close in importance to the double whammy of high unemployment and record foreclosures. They continue to inflict pain and undermine any positive force that’s searching for traction.

Three years after the recession started, joblessness remains stubbornly high at 10.1 percent in the state. What’s more, the problem of long-term unemployment keeps getting worse. Those who have been out of work for at least 27 weeks now comprise 53.7 percent of the jobless, the state labor department said. A year ago, they represented a third, which was already high by historical standards.

Without work, many homeowners can’t pay their mortgages. So metro Atlanta’s foreclosure problem keeps clobbering the housing market. Notices of foreclosure rose 8.6 percent this year, handily breaking last year’s record, according to Equity Depot. They’re up 60 percent from 2008.

When there are thousands of foreclosed properties on the market, prices have nowhere to go but down. The median sales price for existing single-family homes, for example, fell to $109,000 in October. That was down 10.6 percent from a year earlier, according to National Association of Realtors. Sales volume fell 22 percent.

When’s the housing market going to recover?

In some metro areas, it will unfortunately take years.

Other major stories in 2010 included:

Bank failures

Let’s not forget what caused our current economic mess — the financial crisis stemming from bad bets on real estate.

Georgia is still leading the nation with 51 bank failures since August 2008. This year, 21 Georgia banks have failed so far, second only to Florida.

There was some positive news. The number of bad loans on banks’ balance sheets declined, and about half of the state’s banks made money through the first nine months of the year.

Banking experts predict more consolidation in 2011 — either through additional failures or because healthy banks buy weaker ones.

Fiscal crunch

State and local governments, as well as school systems, cut programs, laid off some workers and furloughed others this year. And it looks like there’ll be more of the same next year. By one estimate, the state alone may be looking at a budget hole in the $2 billion range.

Gov.-elect Nathan Deal already has warned schools about further cuts — even though k-12 education is not on the positive side of the ledger when company CEOs are thinking about whether to relocate here.

Our much ballyhooed higher education system has delivered larger classes, higher tuition and fewer professors for many students. Expect next year to be worse, with the popular HOPE scholarship under the gun. HOPE has kept many of the best and brightest in the state, but the Lottery-funded program will be changed. The only question is how.

Transportation

There’s some good news on this front. After kicking the can down the road for years, the Legislature finally passed a measure this year that could help alleviate traffic congestion.

Congestion has been one of the key hurdles for metro boosters to overcome as they try to lure more companies — and jobs — here.

That could begin to change in 2012, when metro residents vote on whether to approve a 1 percent sales tax that could fund an estimated $6 billion to $7 billion in transportation projects. The process of selecting those projects already has begun.

Major Coke move

Coke waited 124 years before making a deal as big as the one it consummated this year.

For some $12 billion, Coke took over the North American operations of what was its biggest bottler, Coca-Cola Enterprises.

The major strategic move by Coke CEO Muhtar Kent was done to rationalize a complex distribution system that remained too costly and inefficient for the competitive North American market. Some 59,000 employees were transferred from CCE to Coke, which is hoping to shave about $280 million from annual costs over time.

AGL’s strategic merger

Earlier this month, AGL Resources announced a $2.4 billion acquisition of a huge Illinois utility, Nicor Inc.

When completed, the once parochial Georgia gas company will become the largest gas-only utility holding company in the country.

The acquisition will nearly double AGL’s size. Nicor serves more than 2 million gas customers in northern Illinois, excluding Chicago. AGL currently has 2.3 million customers in Georgia, New Jersey, Virginia, Florida, Tennessee and Maryland, after a series of acquisitions several years ago.

The move caps a nearly two-decades transformation of AGL, from a conventional Georgia-regulated monopoly to a holding company with a growing portfolio of deregulated businesses across the U.S. natural gas supply chain.

Delta wins union votes

Delta Air Lines will continue to be the industry’s most lightly unionized carrier, following victories during four separate representation elections this fall.

Delta defeated unions seeking to organize flight attendants, baggage handlers, stock clerks and customer-service employees.

Barring orders for new elections, the pilots will remain the only large group represented by a union.

Sea Island bankruptcy

One of Georgia’s most renowned and upscale resorts, Sea Island, succumbed to its owner’s grandiose vision and the real-estate meltdown.

Bill Jones III, whose family had owned the iconic resort for more than 80 years, was forced to file for bankruptcy for the Sea Island Co. Two competing investor groups then joined forces to buy it in a bankruptcy auction this fall.

A coalition of Oaktree Capital Management, Avenue Capital Group, Starwood Capital and Anschutz Corp. jointly bid to acquire the beleaguered resort — including its luxurious Cloister and Lodge hotels and four golf courses — for $212.4 million.

This holiday and beyond

Could it be true? Could this holiday end up being the best shopping season in years?

The full season’s numbers are not in yet, but it certainly is looking that way. And overall retail sales have been strong during the past several months.

The consumer is starting to feel more confident. That could pry lose some of the $2 trillion in cash that U.S. companies have been sitting on, waiting for consumer demand to ignite.

If it has, then next year could be considerably brighter than this one.

Here’s to 2011, the year the economy will hopefully create a new storyline — one with a lot more jobs and far fewer people losing their homes.

- Henry Unger, The Biz Beat

For instant updates, follow me on Twitter.

19 comments Add your comment

Palin fan

December 27th, 2010
8:23 am

Until we get a competint president, the American economy will continue to recession.

What do you not understand about lower taxes, less government, more freedom!!!???

It’s the president, stupid.

Road Scholar

December 27th, 2010
9:03 am

“Until we get a competint president,…”

Well, that leaves Palin out!

Palin fan

December 27th, 2010
9:14 am

Road Scholer is neither a scholer or a road.

Shadow7071

December 27th, 2010
9:39 am

This is a good recap of 2010 in Georgia. Not a pretty recap but a good recap.

It appears that we’re now grasping hold of anything that looks positive e.g., the Christmas shopping season. (Ironically, if the non-christians, atheists, and devout separation of church and state folks had their way then we would have no Christmas shopping and retailers would be in a deep ditch).

Putting aside the Christmas shopping season we still have around a half-a-million people unemployed in Ga. In November the state unemployment jumped from 9.8 to 10.1 percent. Likewise Atlanta’s unemployment is now 10.1 percent. Our neighbors – Florida, North Carolina, Alabama, Tennessee, South Carolina and Mississippi have similar unemployment rates. Overall the Southeast’s unemployment rate is around 10.13 percent. There’s a lot of unemployed folks in the Southeast and there doesn’t appear to be any strong business activity that can and will absorb a significant number of these unemployed folks.

Here’s hoping for a good 2011

HTH

December 27th, 2010
10:11 am

It will be interesting to see how Christmas went. Now all those figures aren’t in. But traditionally. The South. Really goes to the stores at Christmas time. They like all their Christmas shopping. With all the stores we have. They aren’t closing by the way. I saw a lot of people out there. Maybe this will be a big year for all of us.

TnGelding

December 27th, 2010
11:09 am

Jobs are always the last thing to come back. It ws the 4th year of the Bush administration before meaningful job creation, and then all of that was wiped out in his “ownership society” that the whiz kids on Wall Street obliterated.

2011 will be a banner year for the economy and jobs.

Obama is playing the cards Duhbya and his predecessors dealt him; not perfectly, but pretty well.

Walmart apparently had great Christmas sales.

Amanda

December 27th, 2010
12:06 pm

Just like Palin herself makes up verbs, it doesn’t surprise me that her “fan” has decided recession is a verb.

Norlan

December 27th, 2010
12:47 pm

why is Atlanta full of idiots?

BigJake

December 27th, 2010
3:06 pm

I left one job for a better-paying one in June, for a company out of NYC that was expanding in the ATL area – less than six months into the job, I was dismissed, 4 weeks before Christmas. I am hopeful 2011 will be better – cannot be any worse at this point.

Skity Fritty

December 27th, 2010
3:45 pm

If you want job growth then support the “Fair Tax”. Make the tax liability for a corporation 0% and see how many corporations move their HQ back to the US. When they come back to the US, where would you like to live if you were a CEO, in the Northeast or Southeast? Atlanta would benefit greatly by the “Fair Tax”. Would you rather pay no taxes and not have a job or pay a 23% retail sales tax and have a job.
Please understand the “Fair Tax” would only work if you repeal the “Income Tax” so don’t blog about an additional 23% because that is not the “Fair Tax” but rather a “VAT” tax.

S

December 27th, 2010
8:09 pm

Fair Tax, fair to whom, surely not the middle class. Who wants to pay 23% tax, not me. The Fair Tax is only good for the Rich, they already have all the money and sure don’t need anymore.
How much money will you take home if the Fair Tax would become law, Gawd forbid…? I’ll tell you, the same amount you bring home now, after everything is taken out. What is so hard about that sentence, that people can’t figure out.. OH I know, Read the Book…

If some corporations or businesses don’t care enough about this country or the people living here, to pay their fair share of the taxes, then they can leave and me and a millions of others will slam the door on their sorry arses on the way out! Good riddance, there are plenty of other good corporations and businesses who do care about this Country and will take up where they leave off. In the future, I’ll be boycotting any corporation/businesses products that are made off shore..if it is made off shore I don’t need it, got it.

Shadow7071

December 27th, 2010
8:28 pm

S, I agree with you regarding these offshore corporations…. if it’s not made here by Americans then I don’t want it.

These “Tea Party” folks were fairly effective with stirring up anti-government sentiment now they need to focus their efforts on stirring up some anti-global corporation sentiment.

TnGelding

December 27th, 2010
11:51 pm

Under the unfair “Fair Tax” retail sales are anything that moves, including rent, insurance, hair cuts, etc. I could go for a 23% true retail sales tax and keep the payroll tax, if you could make purchases made with savings accrued before the implementation exempt. Let the states form a commission to determine what makes up retail sales so it would b the same in every state.

Stand back, Corporate America is about to unleash its might.

Bill Hester

December 28th, 2010
8:08 am

Mr. Unger, I just wanted to say that I have enjoyed your columns this year and look forward to more in the New Year.

Road Scholar

December 28th, 2010
9:23 am

Palin fan: It appears that spelling is not your strong suit!

ron allen

December 29th, 2010
7:56 am

JOE BIDEN IS AN IDIOT

TnGelding

December 29th, 2010
11:10 pm

If Biden is an idiot, what does that make the rest of us?

Jane Quatam

December 31st, 2010
10:14 pm

The economic collapse was not caused by “bad bets in real estate” . It was caused by widespread financial fraud, by the lending industies, the banks and by the Wall Street firms that rated Mortgage Backed Securities and also the firms that bundled them into MBS “bonds” and sold them into retirement funds and the world in general.

They were bad loands, badly written, badly rated and fraudulently sold. No one has gone to jail, though over 300 banks have failed, no indeed instead the banks still standing give themselves record bonuses while taking zero interest loans from the taxpayers through the Treasury and the Federal Reserve.

Though the crimes were comitted in private finance, the lack of regulatory enforcement and political wherewithall fall to the feet of the government. An impotent lackluster body of windbags, fools and thieves who could no more arrest a banker than imprison a political campaign contributor, since in fact they are one and the same.

The economy will not improve until the laws are enforced, until then the banksters and their political lackeys will continue to loot the wealth of the nation while destroying property laws and financial regulations until the economy collapses under its own rotten weight.

2011 will be more of the same, with little reporting of facts or investigations into what really happened by the myopic media and the salacious pundits who spend more time getting a good seat at the game than they do actually writing about what is happening in our country.

Just the facts, will tell you this depression will continue for at least another 5 years and more likely another decade. Please report the truth so that we may understand and plan, not sugar coated fairy tales to disguise the corruption and fraud that is preying on our nation.

Orlando CPA

January 1st, 2011
8:31 pm

Wow, that’s just difficult to accept. Let’s hope 2011 is better.

http://www.orlando-altamonte-florida–irs-tax-​cpa.com