Mayor Elliott Shearer realized how bad things were when his dental patients started acting strangely. "I'd tell people who'd been coming to me for years that they needed a bridge or a crown and they'd say 'Well, I don't believe I'll do that right now.' And then I noticed a third of my patients were canceling or rescheduling appointments."
Shearer's patients have not found a new dentist. They are victims of the recession that has finally hit this isolated and staunchly Republican city of 67,000 perched in the foothills of the Blue Ridge Mountains 180 miles southwest of Washington. Although better known as the hometown and headquarters of television evangelist Jerry Falwell, Lynchburg has also long been regarded as a Southern Middletown because of its highly diversified economy and an unemployment rate that even in hard times usually runs well below the state and national average.
Since December the bread-and-butter industries in and around this meat-and-potatoes town--General Electric, the Lynchburg Foundry, Babcock & Wilcox, Burlington Industries and the Craddock-Terry Shoe Corp.--have laid off an estimated 6,740 workers. The talk across the white linen tablecloths at the exclusive Piedmont Club and the Formica lunch counter at Revco Discount Drug on Main Street is of an unemployment rate that in the last four months has zoomed from 4.6 to 8.4 percent.
Last year, city fathers recall, Hershey Foods decided against building a new $86 million candy plant here, fearing the low unemployment rate would make it difficult to attract 350 workers. These days Hershey would have no trouble finding people eager to make "Reese's Pieces."
"In my 25 years in business I haven't seen things this bad," said Donald J. Meyers, a vice president and general manager of General Electric, Lynchburg's second largest employer, which recently laid off 183 people.
"Let me put it this way," says Shearer, who estimates his once-thriving dental practice is off by 25 percent. "When B & W Babcock & Wilcox , the Foundry and GE have got troubles, we've all got troubles."
Record losses by the automobile industry, continued high interest rates, a devastated homebuilding industry, tight money and sluggish consumer spending have triggered layoffs nationally and in this usually prosperous outpost where nearly 200 small factories and branches of major corporations produce shoes, paper products, medical supplies and electronics.
Despite the talk about "digging in" and "hunkering down" the guarded public optimism here is frequently overshadowed by glum private expressions of doubt. "We think things are going to get better," said John White, executive director of the Homebuilders Association of Central Virginia. "We would just like to have some idea of how long it's going to take."
Hardest hit is the Lynchburg Foundry, which makes metal castings used by Ford and Chrysler. The two automakers recently reported record losses and the Foundry recently laid off an entire shift, some 250 workers including those who had accumulated more than a decade of seniority. The Foundry is now operating at 60 percent capacity.
General Electric has been similarly affected by the slump in automobile sales. Lynchburg is the headquarters of the company's world-wide mobile communications division that makes two-way car radios.
Until recently that's what Sheila Lewis did. A 21-year-old single mother of three Lewis illustrates the domino effect layoffs have had here. Before she was laid off several weeks ago by General Electric, Lewis was earning $7.50 per hour as a radio assembler on the night shift.
Lewis says that without a job all the money she receives in food stamps, unemployment and welfare will go to buy food and pay the $230 monthly rent and utilities on her two-bedroom apartment. No job also means she has no money to pay the $600 she owes several retail stores. That includes $279 she still owes Schewel Furniture for the orange-and-brown plaid living room set she bought on credit and already has refinanced once.
"They can't get money until you get it," said Lewis, who says she intends to pay her bills as soon as she finds another job.
Lewis' inability to pay Schewel's means that furniture store owner Bert Schewel will add another uncollected bill to his burgeoning list of delinquent accounts. "We're breaking our credit rules, taking partial payments," said Schewel, whose chain of furniture stores was established by his grandfather in 1897. "What options do I have? I've got to carry most of these people."
Because he is worried about his cash flow, Schewel is trying to keep his inventories to a minimum. That's why he's not ordering much merchandise from Thomasville Furniture in nearby Appomattox, which last week laid off 65 workers. Because of high interest rates he's not borrowing money, to the dismay of bankers such as David D. Armistead.
"Business has slowed down right much," said Armistead, senior vice president of Central Fidelity Bank, the largest in central Virginia. "We need some good loans."
This recession has already proved to be more severe than 1975, largely because it is more pervasive. "In 1975 we had a decent auto market and a good agricultural market," said George T. Stewart, the cigar-puffing chairman of the board of First Colony Life, a major insurance company based here.
The sluggish economy and poor retail sales have hurt the 95-year-old Craddock-Terry Shoe Corp. Because orders were down by 20 percent, the company shut down its plant for the last two weeks in February, temporarily laying off all 250 workers.
This city's largest employer is Babcock & Wilcox, which manufactures nuclear reactors, the construction of which has been virtually halted since Three Mile Island. The company recently laid off 70 of its 3,700 employes as part of what was officially described as a "reorganization."
New residential construction has ground to a near halt. Figures compiled by the Homebuilders Association show that in January building permits were $1.4 million, down from $4.6 million a year ago.
Builders are hoping that a proposed $19 million federally sponsored hotel and convention center to be located in this city's bleak downtown will help shore up the economy and create new jobs. But for now "business is terrible, just terrible," said Sam Meeks, vice president of Taylor Bros., Inc., one of this area's largest building supply companies. "This thing has a tremendous ripple effect, from your builders to your subcontractors to carpet and appliance stores."
The recession has also affected the Dutch Treat, a lunch counter and bar that is a favorite hangout of construction workers. "I could count what we did today on 10 fingers," said Ed Abbott, Dutch Treat's gravelly voiced owner ticking off the two breakfasts, two hamburgers and four hot dogs and a few beers that earned him a total of $40 one day last week.
"This is worse than I've ever seen it," said Abbott, who says he earns nearly $300 on a good day. "Nobody has any money around here. If this keeps up for two more months I'm going to have to close down. I've been here nine years and I hate to go out."
There are other signs of economic distress. At noon the streets in Lynchburg's shabby, hilly downtown are so deserted it is possible to park in front of most stores. Some merchants at Lynchburg's biggest attraction, the year-old, 83-store River Ridge Mall on the edge of town, say sales are off, despite signs proclaiming huge markdowns.
For the first time ever the local United Way drive fell tens of thousands of dollars short of its goal. One day recently the local newspaper, The News and Daily Advance, carried only 15 classified ads, four of which were for jobs elsewhere. Social service officials say reported cases of child abuse and applications for food stamps have increased dramatically as a result of the layoffs.
Disposable income is down and so are fast food sales at the three Arby's restaurants here. "People are doing more cooking at home," said franchise owner Sherwin Cook, who says sales are off by 10 percent. "What you also see is people not ordering things like apple pies and french fries, just sticking to the sandwich and drink."
Some businesses are apparently untouched by the recession, among them First Colony Life, which recently announced record profits and has been acquired by the Ethyl Corp of Richmond. William R. Chambers, president of C.B. Fleet Co., makers of Fleet Enemas and Summer's Eve Disposable Douche, says so far 1982 sales are 20 percent higher than last year. "We feel to some extent these two things are recession proof," Chambers said.
There have apparently been no layoffs at the enterprises of Jerry Falwell, whose Old-Time Gospel Hour, Moral Majority and Liberty Baptist College employ 1,200 people, making the fundamentalist preacher one of the city's biggest employers.
Even Falwell, whose religious empire has grown explosively during the last five years, reflects the city's hard times. Although his enterprises raised $71 million last year, $23 million more than the city budget, there is currently no construction under way at his Liberty Baptist College.
"We're watching our expansion," said Falwell aide Nelson Keener. "People still have to sacrifice to give and I think they'll keep doing it."
Many here view the economy with a more jaundiced eye. "Until recently there's been sort of a guarded optimism that President Reagan is doing the right thing," said building supplier Meeks. I think if Reagan's program works we will have the same effect on the country as Franklin Delano Roosevelt. If it fails, he will have had the same effect as [Herbert] Hoover."