Tom Lowrie is in survival mode.
Over the last two years, business volume at Lowrie’s Landscaping has dropped by 25 percent, he’s been forced to cut staffing by more than half, and remaining employees are clamoring for pay raises he just can’t afford to dole out.
And now, with crews on the road to install supply-heavy landscape projects like retaining walls, waterfalls, and patios, the recent jump pushing gasoline over $4 a gallon is exacerbating the problem.
‘It’s adding fuel to the fire,? Lowrie said in an unintentional but appropriate play on words. ‘It’s hard to tack on surcharges or increase prices to offset gasoline costs because the economy is already making people very price sensitive. I cannot raise my prices.?
To compensate, Lowrie, who’s owned and operated the company since 1979, sold some of his larger trucks and now outsources big deliveries.
Following the lead of Oakland County Executive Brooks Patterson, he’s also shifted to a four-day work week.
‘Right now our prices are considerably less than two years ago, just because of the market,? Lowrie said. ‘It’s just really survival mode at this point, but we will survive. I have a good track record and that will keep me in business.?
But, he said, the competition is stiff.
‘When times are this tough, you lose some loyalty and people tend to go with lower prices of the people who are jumping into the business and don’t have the insurance and overhead I have,? he said. ‘It’s frustrating. They can certainly do it for less, but customers are not getting the service and quality they’d get from me.?
At the Speedway on Dixie Highway in Independence Township last week, Yvette Cadeau stopped to gas up the truck she drives for her job delivering auto parts. Although work-time gas is paid for, personal time in her own car is a different story.
‘I’ve been charging my friends when they want to go some want to go somewhere,? she said. ‘I never used to do that, but I have to now, with the cost of gas.?
Gary Desmaris, also of Independence Township, said summer plans were still intact, but fuel costs were making him more thoughtful in his day-to-day routine.
‘It makes you slow down on how much you use the car,? he said. ‘I’ve been planning errands more efficiently’if I need to make a trip across town, I’ll say ‘Oh, I’ll wait until tomorrow because I have to go over there for something else.?
At a nearby pump with her shiny red Hummer, Bonnie Fields said she’s finding herself fueling up more frequently.
‘Usually I fill it, but now I just do maybe $40 at a time,? she said. ‘I play the game, and just wait. Maybe the price will go down tomorrow.?
Or maybe not.
According to the Energy Information Administration, a division of the U.S. Department of Energy, regular-grade gasoline prices will average $3.78 per gallon this year, a 34.5 percent increase over the 2007 average of $2.81 per gallon.
Gasoline prices are expected to rise to a monthly average price peak of $4.15 per gallon in August.
Diesel fuel retail prices in 2008 and 2009 are projected to average $4.32 per gallon, a 59 percent increase from the $2.88 average in 2007
Diesel fuel prices are projected to remain near $4.71 per gallon over the next few months.
The huge spike in diesel costs have family-owned Smith’s Disposal working to offset the increase.
‘We’re taking a hit right now because we don’t want to increase prices,? said company mechanic Archie Munson. ‘But we still have to pay the higher fuel costs’it’s definitely struggle for a smaller businesses.?
The 25-year-old Springfield Township-based company provides trash pickup and recycling services in Springfield, Independence, Waterford and Brandon townships, as well as portions of Holly, Groveland and Orion.
With about 25 trucks on the road any given day, Munson estimated the company uses roughly 2,000 gallons of diesel fuel per week.
In an effort to compensate, he said, the company worked on eliminating other costs through internal restructuring.
The result: lost jobs.
‘You try not to reduce your workforce,? Munson said. ‘But every now and then you have to have a small reduction in workforce to try to offset rising prices. We don’t want to lose our customer base to the bigger companies.?
Munson said Smith’s Disposal is ‘trying desperately? to avoid an increase in customer cost.
‘We know our customers are feeling the pinch, too,? he said. ‘We don’t want to pass them anything else they don’t need right now.?
Across the area, public agencies are also watching costs rise.
In Independence Township, DPW Director Linda Richardson said gasoline spending has jumped 30 percent this year, while diesel fuel, used almost exclusively by the township’s fire department, is up a whopping 70 percent.
But, she said, nearly all the township’s fuel consumption is necessary for public safety.
‘Right now it’s status quo,? Richardson said, noting as of June 21 the township spent about $11,000 for fuel this month alone. ‘We’re doing what we have to do; we’re not making any changes at this point.?
At the Oakland County Sheriff’s Office, an organization logging some 6.2 million miles on the road each year, significant changes in the works.
An order to leave all but one on-call detective car parked at the substations overnight was issued recently, and a request for bids will also go out in coming months as the OCSO looks into saving money by using a private vendor to service vehicles.
Currently, all sheriff’s patrol vehicles are leased from the Oakland County central garage.
And, as odometers on the department’s Ford Crown Victoria police cruisers reach 80,000 miles, the cars will be replaced with the smaller, less expensive and more fuel efficient Chevy Impala.
While not as popular with deputies, the Impala, with its smaller frame and front wheel drive, averages 20-25 percent higher gas mileage than the Crown Victoria.
‘It still holds up pretty well,? said Oakland County Undersheriff Mike McCabe, noting the Impala currently makes up only 30 percent of the OCSO’s fleet. ‘In the scheme of things, the sheriff is not thrilled with making these changes, but like any private business, we’ve got to watch costs anywhere we can.?
Ultimately, he said, those costs are built into municipal contracts with the sheriff’s office and passed down to the communities it serves.
‘That’s the kicker,? said Lt. Dale LaBair, commander of the OCSO Independence Township substation. ‘Contract increases could be substantial because day-to-day costs, especially fuel and health care insurance, unfortunately kick us like anyone else.?
In tiny Clarkston, with a population of about 1000 residents living within the city’s half-square mile, the pinch is especially painful.
With only two full-time officers, Clarkston’s shrinking revenues and almost non-existent fund balance already had officials grappling with a way to replace aging police vehicles.
‘Fuel prices are killing our budget,? said Police Chief Dale LaCroix. ‘We’re $4,000 or $5,000 over for gas this year because of it and we already upped the budget once.?
And in Springfield Township, only three of the department’s 32 firefighters are full- time employees. The rest are paid at $15 per call, with no allotment for mileage.
‘The majority of our firefighters run all over the township and most of the time they’re out by the expressway and have to leave their cars running because of lights and stuff,? said Fire Chief Charlie Oaks.
‘It’s getting pretty expensive for the paid per call firemen running all the time, and I have heard some of the fireman complaining. Only so many will fit in the truck when they go out, so they’re trying to sit in each other’s laps now to save fuel.?
Come back to The Clarkston News next week for Part II: Alternatives, incentives and other ways to ease your pain at the pump.