Southwest Virginia Population decline 2010-2018.

Virginia Tobacco Commission and the Nautilus Fiasco

Compiled by Lewis Loflin

Update 2014: Another is taking over the facility promising this time 200 new jobs and getting $15 million in corporate welfare. Will it work this time?

See No It's Not 250 New Jobs in Grayson County Virginia

In the saga of stupidity at the Virginia Tobacco Commission, taxpayers got a real workout with Nautilus, Inc. First the Tobacco Commission gave away $150,000 plus in 2008 promising 60 new jobs; by 2009 Nautilus went away. Then the taxpayers had to pony up another $250,000 in tobacco grants plus a $1.9 million "loan" to get something called Med-Fit Systems, Inc. to buy and try to keep it open.

There is no guarantee any of the jobs will ever materialize and the Tobacco Commission is notorious for not reclaiming funds even when they put conditions on those funds. Good going Senator Wampler on this newest "investment."

The end result is the community is worse off than before. Below is the record as I've compiled it so far. I have requested documentation on the terms of that $1.9 million loan. Posted April 20, 2010. Strongly note nothing illegal transpired here by any party involved. This is how business is conducted at the Tobacco Commission.

Based on information from public officials under the FOIA note the following:

The $50,000 Governors opportunity grant fund has been repaid in full in 2010.

The $1.9 million "loan" was made for purchase of the building. They didn't indicate who owned the building. I assume the building isn't for sale as indicated by Loopnet.com

Grayson County company staying put

From www.wdbj7.com February 19, 2010

To quote:

A company that almost had to shut down after 30 years of business in Grayson County is staying put. Workout equipment manufacturer Nautilus is being bought out by Med-Fit Systems, but will keep the Nautilus name. With the deal though, about 50 of the 170 employees at the Independence plant will be laid off. Med-Fit Systems says it hopes some of those layoffs will be temporary.

And:

Nautilus plant in Grayson Co. sold

WSLS News Staff February 19, 2010 (extract)

GRAYSON CO. - The Nautilus plant in Grayson County has been sold. Med-Fit Systems bought the plant, which is in Independence. The Grayson County Board of Supervisors helped support a nearly two-million dollar loan to keep the plant in the town, to save jobs. The area has a 12% unemployment rate...

The leadership of Grayson County committed itself to assisting the retention of the Nautilus operations by supporting a low-interest loan in the amount of $1.9 million through the Virginia Small Business Financing Authority for the purchase of the main manufacturing campus. It secured $250,000 in TROF grants from the Virginia Tobacco Indemnification Commission and provided various forms of technical and professional support...

Med-Fit Systems, Inc. is a twenty-three year old physical therapy and senior care products provider. Located in Southern California, Med-Fit Systems focus has been on enhancing quality-of-life through fitness programs and therapy equipment, while helping clinics and facilities reduce costs and drive revenue. They have over 1,000 Nautilus installations in the rehab, senior and athletic training markets.

Building is now listed for sale:

http://www.loopnet.com/Listing/15961971/607-W-Main-St-Independence-VA/
Nautilus, Inc. Distribution Center
607 W Main St, Independence, VA 24348

Highlights: 82,400 sq ft of distribution/warehouse space 2,600 sq ft of office space

Description: Building currently in use as a distribution center for Nautilus. Building has 5 truck bays and 1 overhead door. 85,000 total square feet with 82,400 dedicated to warehouse/manufacturing space. Just off Rt. 58 in town of Independence. 25 miles to Interstate 77 which gives access to Interstate 81.

Distribution center? I thought this was a manufacturing facility.

December 18, 2008 www.governor.virginia.gov (804) 545-5806

GOVERNOR ANNOUNCES 60 JOBS FOR GRAYSON COUNTY

Nautilus, Inc. to invest $1.7 million to expand manufacturing

RICHMOND - Governor Timothy M. Kaine today announced that fitness company Nautilus, Inc. will invest $1.7 million to expand in Grayson County. The company, which will expand its manufacturing operation to add a cardio exercise equipment line, will create 60 jobs. Virginia successfully competed with Oregon and China for the project...

The Virginia Economic Development Partnership worked with Grayson County and Virginia's aCorridor to secure the project for Virginia. Governor Kaine approved $50,000 from the Governor's Opportunity Fund to assist Grayson County with the project. The Virginia Tobacco Indemnification and Community Revitalization Commission approved $100,000 in Tobacco Region Opportunity Funds for the project. The Virginia Department of Business Assistance will provide training assistance through the Virginia Jobs Investment Program...

William Wampler, member of the Virginia Tobacco Commission and Virginia State Senator said, "Of the many investments made by the Tobacco Commission, none are more meaningful than those made in companies like Nautilus which bring jobs and capital to southwestern Virginia communities. The Commission is pleased to make $100,000 available to ensure the success of this valuable corporate citizen."

Posted for April 20, 2010:

See Three Decades of Job Losses in Southwest Virginia

Note that minimum wage in 1970 was $1.60 adjusted for inflation is $10.46 in 2018. That is what I call adjusted minimum wage. Assuming one even gets 40 per week that's for 52 weeks that equals $21,756. Per capita income in Bristol Virginia 2018 is $21,589. It is similar to this across the whole region.

Third world? Some have called us the China of America minus jobs.

Just a few of hundreds of plant closings see Smyth County the China of America loses jobs.

Update September 3, 2019. Based on data from Dr. Steb Hipple economist at East Tennessee State University (retired), his data goes to the 3rd. quarter of 2016. The level of job losses is Tri-Cities is staggering, worse than what even I thought.

(The Tri-Cities Consolidated Statistical Area is composed of the Kingsport/Bristol MSA and the Johnson City MSA.).

The Bristol TN-VA, Kingsport, and Johnson City Urbanized Area Labor Market lost thousands of jobs shrinking the labor force that shrank the unemployment rates. The above table shows a decline of labor force by almost 18,000. But it gets worse.

Includes: Johnson City, TN, Carter County, Unicoi County, Washington County.
All workers BLS:
2016 78,140 workers, Median hourly wage $14.47, Annual $40,140
2018 77,020 workers, Median hourly wage $15.38, Annual $42,740
Labor force fell 1120 jobs in 2 years.

Kingsport-Bristol-Bristol, TN-VA MSA includes: Bristol city, VA, Hawkins County, TN, Scott County, VA, Sullivan County, TN, Washington County, VA.

All workers BLS:
2016: 118,470, Median hourly wage $15.27, Annual $41,050
2018: 116,150, Median hourly wage $16.50, Annual $43,480
Labor force fell 2,320 in 2 years.

That's not the worst of it still. For Tri-Cities the total labor force is 193,170. The labor force shrank by 3,440 jobs in 2 years - during a so-called boom. In 2009 the labor force was 247,965, minus 193,170 equals a staggering loss of 54,795 less people are working in 2019 than in 2009!.

I can't believe this myself. Anyone working here knows it is bad. That could be explained by high poverty and disability rates, and large numbers of retirees leaving the labor force. I don't know because a lot of data is hidden from the public. But makes sense when we look at the national labor force declines.