While acknowledging the body blow that the coronavirus pandemic has dealt to Greater Cleveland's economy, U.S. Commerce Secretary Wilbur Ross acknowledged the mettle of local businesses and their employees this week.
"I know that your companies and your workers are resilient and strong and have always overcome adversity," Ross said during a Monday afternoon virtual program on June 15 arranged by the Greater Cleveland Partnership. "This time will be no different, and Cleveland will come back blazing once the lockdowns are lifted."
Speaking to approximately 50 business owners and representatives, Ross said that the region's industrial backbone and ongoing appeal to manufacturers will better position the state to rebound. He also expressed hope that money will flow into Ohio's 320 Opportunity Zones, geographies that offer tax benefits to investors in funds focused on real estate or businesses.
But Ross noted a stark reality: The Cleveland-Elyria-Mentor area's unemployment rate in April, at 23.1%, was the third highest in the nation among major markets. Only Las Vegas and Detroit fared worse.
He speculated that May jobless figures, set for release late this week, will look better.
Representatives of two sizable local employers walked a similar bright-and-bleak line in remarks during the event. Lubrizol Corp., a specialty chemicals manufacturer based in Wickliffe, has been able to avoid layoffs despite a dramatic drop in customer demand and stay-at-home orders affecting half of its employees.
Beth Grove, who heads up public affairs for Lubrizol, said the company has been able to boost production of personal-care products, including hand sanitizer, by about 1 billion bottles a month. But that growth hasn't offset pandemic-induced declines in other areas, she told Ross.
Grove suggested that the federal government should broaden eligibility for an employee retention tax credit so that companies like Lubrizol, which employs 8,800 people worldwide and hasn't had to shut down its facilities, would qualify. The credit was part of the Coronavirus Aid, Relief and Economic Security package, or CARES, signed into law in March.
Vanessa Whiting, president of Cleveland-based A.E.S. Management Corp., said she's been able to keep drive-thrus at her 16 Popeyes restaurants' open — and 500 employees on the job — thanks in part to a loan from the Small Business Administration's Paycheck Protection Program.
"The good news is we have seen sales rebounding," she told Ross. "The average ticket is higher than pre-COVID. We have not rebounded in terms of customer count, however. So there are fewer customers, but they are buying more. We are hopeful, and I'm planning to reopen our lobbies for carryout in the coming weeks."
Whiting, a GCP board member who also sits on Gov. Mike DeWine's business recovery advisory board, voiced concern about the challenges that smaller employers are facing.
"Those of us in the franchise, quick-service business, we were able to pivot," she said. "Some of the micro, small businesses are really hurting, particularly in minority communities."
While detailing the Trump administration's efforts to shore up the economy, Ross said that Cleveland-area organizations are among the applicants seeking funds through a $1.5 billion Economic Development Administration grant program that also was part of the CARES package.
"You should receive some good news in coming days," he added.
Those applicants include MAGNET, the Manufacturing Advocacy and Growth Network, which teamed up with Cuyahoga County and business groups to seek $630,000 to help small to mid-size companies explore collaborative robotics and other technologies. Their goal is to put employers in a better position to train workers and bring jobs back from overseas. The partners are waiting for a response to their application, which involves a local match of about $170,000.
Ethan Karp, MAGNET's CEO, listened in on the conversation with Ross.
"I don't know whether he was referring to our application," Karp said during a phone conversation afterward. "I hope so. It would be a win for the community."
Ross's comments were largely upbeat. But toward the end of his prepared remarks, he took a moment to sound the alarm about Cleveland's lackluster participation in the decennial census.
As of Monday afternoon, Clevelanders' response rate was 46.5%. The statewide response rate was 66.1%, and the national response rate was 61.4%.
"That's really dangerous," Ross said, asking employers to encourage their workers to respond. "So much depends on having a total count, a complete count, including the allocation of billions of dollars in federal funds and representation in Congress. … An undercount will cost your city funding every year for the next 10 years."
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US Commerce Secretary: 'Cleveland will come back blazing once the lockdowns are lifted' - Crain's Cleveland Business
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