Friday, November 21, 2008
Editorial: Shenandoah jitters
The Roanoke insurer's planned merger sounds like it'd make good business sense. Let's hope it's not bad for the valley.
From the RoundTable blog
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The effects of the subprime mortgage meltdown just keep reverberating. Roanokers learned Wednesday that Shenandoah Life, one of the city's home-grown business successes -- established, 1914 -- is in merger talks with a larger Indiana insurance company.
Shenandoah posted a $61.5 million loss so far this year thanks to its investment in tanking mortgage-finance giants Fannie Mae and Freddie Mac. Indiana-based OneAmerica Financial Partners promises Shenandoah a cash infusion if the merger plan is realized.
In terms of financial strength, OneAmerica has an "excellent" rating to Shenandoah Life's "good." And credit rating company A.M. Best had marked Shenandoah's outlook "negative" until news of the possible merger prompted an upgrade to "developing implications."
Surely a healthy company that is able to grow, but no longer calls Roanoke its corporate home, would be better for the region than a hometown operation that slips into decline because it cannot or will not adapt to tumultuous changes in the economy.
Should the merger clear all the hurdles ahead, Shenandoah -- Virginia's second largest life insurer -- expects it will keep its name, its Roanoke headquarters, its 280 employees. All gain, no pain, the scenario goes.
Maybe so. Roanoke is eager for good economic news, even if it grows out of bad, and yet ... .
Since Norfolk & Western Railway's 1982 merger with Southern shifted the corporate headquarters of a combined NS to Norfolk, Roanoke has grown uncomfortably accustomed to seeing thriving hometown corporations swallowed up, the cream of their jobs sopped up by distant national offices.
A new out-of-town leadership team at Advance Auto Parts has been enough to create jitters that the Roanoke Valley eventually might lose the headquarters of its only Fortune 500 company, founded in the valley in 1932.
Last year, Advance Auto CEO Darren Jackson, a former executive of Minnesota-based Best Buy, opened what he called a regional corporate office there and started recruiting former Best Buy executives, even as he promised that the auto parts retailer would keep corporate headquarters in Roanoke.
This year, he moved about 40 jobs from Roanoke to Minnesota, part of a strategy to improve sales.
A small percentage of the 1,600 people the company employs in the Roanoke Valley was affected, and Jackson reassured city officials that the valley will remain home base. Still, who can help but wonder if the region's seeing a phased withdrawal of corporate leadership, whatever the headquarters' address?
Similarly, Shenandoah's merger plan, the company says, will enable it to grow. We wish it good health, right here in Roanoke.
