Retailers aid flood victims
The worst flooding in the Midwest in 15 years has left communities across several states with a daunting cleanup job. As the waters of the Mississippi River subsided in late June, communities in Illinois, Indiana, Iowa, Kansas, Missouri, Michigan, Nebraska, South Dakota and Wisconsin got about the business of cleaning up their damaged homes. Others, whose homes were destroyed, began making plans to move or rebuild.
It is estimated that the storms displaced more than 38,000 people and caused more than $1.5 billion in damages in Iowa alone. In Cedar Rapids, one of the hardest-hit cities, more than 2,000 homes were destroyed by the flooding, and the sight of damaged furniture and molding carpets along the streets has become commonplace.
“This has been so widespread—the worst natural disaster since Katrina,” said Doug Christener, owner of two True Value Hardware stores in the Cedar Rapids area. “There’s been an increased demand for cleanup supplies, including sump pumps, dehumidifiers, generators, wet/dry vacs, gloves, dust masks and bottled water. We normally sell a dozen rubber gloves in a month—we’ve been selling 200 in a week.”
Christener’s store in downtown Cedar Rapids suffered some damage, but it has still been able to serve as a supply post for the community. When much of the area was without power for several days, Christener was able to provide several homes with generators. He also witnessed a memorable act of generosity when one customer bought a $700 generator and then gave it back to the store to give to a needy citizen. Another bought $300 worth of gloves and cleaning supplies and set up a table across from the cash register to give them out to those less fortunate.
“People were not greedy and would take one pair of gloves and some Clorox. We also had a lot of people who didn’t take anything because they didn’t need it,” Christener said. “It’s been pretty exhausting—both physically and emotionally—but the kindness shown by people has continued to amaze me.”
The True Value distribution center in Mankato, Minn., has sent supplies to flooded areas in southeastern South Dakota, southeastern Minnesota, West Central Wisconsin and northwest Iowa. When news of the flooding broke in mid-June, trucks were filled with supplies and dispersed immediately. The initial needs were sump pumps, wet/dry vacs and extension hoses. After several days the mix shifted to dehumidifiers, mops, buckets and other cleaning supplies.
“Between the emergency orders and balancing orders within True Value, we were able to keep up with the demand,” said Beverly McCulloch, superintendent of the Mankato DC. “As a company, we keep emergency lists of supplies, including what we want to be able to ship right away under different circumstances. Unfortunately, between this, hurricanes and tornadoes, we’ve had a lot of practice at it.”
Going forward, McCulloch anticipates different needs in the affected communities, including rebuilding materials like paint and wallboard compound. “This is not the first flood we’ve needed to be ready for,” she added. “We went through the same thing last year in Wisconsin, but it’s a little bigger area this year.”
Jean Niemi, a spokeswoman for Home Depot, said no Home Depot stores had been damaged by the flooding. She said that demand for items like sump pumps, generators, wet/dry vacs, tarps, buckets and trash bags had been “up and strong,” but that Home Depot has been able to keep its stores stocked.
On June 20, the Chrysler Foundation donated $100,000 in flood relief supplies to the Serve the City Resource Group, which has coordinated volunteers to help unload, organize and distribute cleanup supplies to damaged neighborhoods in Cedar Rapids. The goods were purchased at Home Depot and Wal-Mart stores in the Cedar Rapids area, and Home Depot offered the foundation a 40 percent discount on the materials, which allowed the organization to purchase additional items. Meanwhile, the Wal-Mart staff packed, loaded and coordinated a staging area for items purchased from its store.
After an initial run on mops, buckets and other cleaning supplies, one Home Depot store in Cedar Rapids was seeing increased demand for bug spray, citronella candles and mosquito netting in the latter part of June. The store also saw increased sales of safety masks and other mold control items, which were needed to deal with the contaminated water during cleanup.
“The flood waters went through sewage plants and factories,” said store manager Scott Anderson. “I went down to help clean up, and in some of the buildings the fumes were so bad, my eyes burned. We had some charity foundations coming in and getting masks and giving them away to citizens.”
Anderson said the store was able to keep up with demand by receiving regular deliveries from the local distribution center, although he did need to hire additional workers to help receive and distribute the products. “We’ve been operational 24 hours a day, seven days a week,” he said. “In addition to extending our hours by four or five hours a day, we’ve been supplying contractors. If they need something in the middle of the night, we’ve been there to open up the store and get it to them.”
The flooding has also caused its share of business casualties, including New Hartford Trustworthy hardware store in New Hartford, Iowa. Open since 1931, the store had survived floods in 1947 and 1993, but this one—which deposited 31 inches of water in the main store—proved too much, says third generation manager, Randy Johnson. The store was expected to close its doors right after July 4.
“I’m 52 years old, and this hardware store has been run by a Johnson since it opened in 1931,” he said. “Things weren’t going well before the storms, and this just did us in.”
Honda lawn mowers recalled
American Honda Motor Corp. is recalling about 20,500 Honda Lawn Mowers, according to the Consumer Products Safety Commission.
Arear shield attached to the lawnmower can break off and be thrown at the operator, posing a laceration risk. The company has received one report of this incident, but no injuries have been reported.
The recall includes HRX walk-behind lawn mowers, and the items were sold from Oct. 27, 2007, through June 2008.
Fannie Mae, Freddie Mac woes could lead to Fed takeover
Following a slew of funding problems for government-sponsored mortgage finance companies Fannie Mae and Freddie Mac, the federal government is considering taking over the two organizations, according to a report by the New York Times.
The two mortgage companies, which are government-sponsored entities (GSEs), have had difficulty raising funds in the face of the housing market downturn.
According to the report, a plan is under consideration by the Fed to place Fannie Mae and Freddie Mac into conservatorship, which means losses on home loans under their names would be paid by taxpayers. The newspaper cited individuals briefed with the government’s plan, although the sources also said no action is imminent.
Congress created Fannie Mae during the Great Depression and created Freddie Mac in the 1970s. Later, legislators eased some restrictions on the two organizations to help spur growth, allowing them to cash in on the slew of jumbo mortgages that eventually entered the market. Like many other mortgage companies, the two groups were deeply hurt by fallout in the housing market. But unlike other mortgage companies, Fannie Mae and Freddie Mac collectively hold huge relative chunk of the outstanding mortgages in the United States.
Shares of Fannie Mae and Freddie Mac are expected to slide further today, after plunging throughout the week. If the government were to take over the companies, their stock would be worth “little or nothing,” according to the New York Times.