Obama and the business of Hampton Roads

Now that the nation knows who the next president will be, we can ask more basic questions, such as what does it mean to me and my job or my business.

In Hampton Roads, where federal spending is important to the economy, a new administration's decisions, particularly in defense, will be closely watched, for example.

The Pilot's Business team asked local business people about what they hope for and expect from President-elect Barack Obama.

Tom Epley, president and chief executive officer of Marine Hydraulics International Inc., a Norfolk-based ship repair company

 The outcome of Tuesday's election probably will not bring major changes for Hampton Roads' ship maintenance and repair industry, at least in the short term, Epley said.

Both political parties have expressed support for the Navy's goal of building a 313-ship fleet, he said. "And where you have 313 ships, you will always have the need for maintenance and repair."

However, if the new administration decides to cut back on the military's maritime operations, that could affect the repair business, he said. The long-term result, he added, is "anybody's guess."

- Kathy Adams

David Moore, owner of Two Men and a Truck, Virginia Beach

"I believe that you're going to have a certain amount of people, they're not going to go to work and they want the government to hand them everything. But maybe some people need an inspiration to go on. I think this president is going to be inspirational to a lot of people. Nothing against President Bush, but people want a change. They're not happy with the way things are going."

- Philip Walzer

Susan Milhoan, president and chief executive of the Retail Alliance, the trade group for Hampton Roads merchants based in Norfolk

"The outcome of the election isn't as important as the delivery of promises made during the campaign," Milhoan said, referring to the candidates' pledges to remedy the nation's economic woes. "That'll get housing starts back up. That'll get jobs created."

The specific individual in the White House matters less than the steps taken to improve the economic outlook and consumer confidence, particularly going into the holiday shopping season, she said. "Retailers are just anxious."

- Carolyn Shapiro

Warren Harris, economic development director for Virginia Beach

"I still think it all comes down to access to the credit markets," Harris said. "Without the ability to get dollars flowing in the hands of businesses, it still remains that question mark of can people expand their businesses or do they need to retrench."

Harris said he thinks businesses will have more confidence now that the election has been decided, and that confidence could lead to more expansion.

"Locally, that translates to new jobs being created," he said. "I'm hoping the comfort level out there will rise."

- Josh Brown

Michael Mares, special member of Witt Mares, a Newport News-based accounting firm

During his campaign, Obama proposed several tax-code changes, including increases in the rates on capital gains and dividends.

"I think tax policy will be a big deal," partly because of the need to fund Social Security and Medicare, Mares said.

Having picked up more seats in the House of Representatives, the Democrats will be better able to get their measures through the Ways and Means Committee, the House's tax-writing committee, he said. However, the shape of Obama's tax proposals will depend partly on who is tapped to be the next Treasury secretary, he said.

- Tom Shean

Stephen Ballard, chief executive officer of S.B. Ballard Construction Co. in Virginia Beach

Construction companies in the region will be hurt if military spending is reined in, Ballard said.

"If spending goes down, then it's kind of like losing a carrier. The reason why we build shopping centers and build schools is because military people are here and they go shopping, and their kids go to school."

Military spending on construction projects in the past few years has buoyed the region's general contracting firms. During the past four years, the military has awarded more than $1.1 billion in contracts for construction projects in Hampton Roads.

Ballard said general contractors may have to cut their work force if military spending goes down.

"For a company like us, we might have to go from 400 people to 300 people to make it through," he said. "Currently, we have enough workload to put us through September of next year."

- Josh Brown

Joe Dorto, president and chief executive officer of Virginia International Terminals Inc., the Norfolk-based operating company for the Virginia Port Authority

The Obama administration could be good for the port, Dorto said.

"I think Obama is going to be good in terms of international business. I think he's going to travel around the world, and I think the U.S. is going to have at least a chance to have a good, clean reputation with other nations. And I think that will be good for trade."

However, he'll have to recognize that supporting business will be essential to stabilizing the economy and generating the tax revenue necessary to pay for his social programs, he said.

"The way to stimulate the economy is to be good for business. If he can govern from the middle and look at all sides, I think we've got a good chance to get back on track."

- Kathy Adams

David F. Host,  president of T. Parker Host Inc., a Norfolk-based ship agency

It is likely to take a year or two before the Obama administration will start to implement programs that could affect the maritime industry in the long run, Host said. But there is some concern in the industry that federal grants, programs and subsidies may be cut because of the struggling economy, he said.

The economic crisis and credit crunch are major challenges to the shipping industry, impeding customers' ability to obtain credit, reducing cargo shipments and shipping rates, and curtailing companies' plans to build new vessels, he said.

"I'm a little bit concerned," Host said. "It's not going to be the end of the world; it's not going to be the end of shipping. But I think there's going to be some belt-tightening; you're going to see some ship owners go out of business."

Obama's popularity overseas may help business relations, he said.

"It's a good thing because all the Europeans and other nations were basically supporting Obama, so maybe it'll unify the globe a little bit better."

- Kathy Adams

James Squires,  executive vice president of finance and chief financial officer of Norfolk Southern Corp., the Norfolk-based railroad

"We, too, feel confident that we can work with the Obama administration and all of its representatives throughout the government and have no concerns there," Squires said during a panel of railroad financial executives in New York on Wednesday.

The executives said they'd be interested in a new investment tax credit for railroads. They also expressed hope that the new administration will recognize railroads' fuel efficiency, the valuable union jobs they provide and the contributions they make to the country's transportation infrastructure.

- Kathy Adams

Michael Barrett, chief executive officer of Runnymede Corp., a Virginia Beach real estate developer

The election gives the country a clear direction, Barrett said, and that will be good for all businesses.

"It certainly is a positive that there is such a mandate for change. Developers in commercial real estate prosper when businesses prosper. People don't expand when their businesses aren't doing well."

Despite the election, Barrett said the country and region still face a challenging 2009. He expects next year to be slow for real estate developers.

"I think you'll see some vacancies go up a bit," he said. "There are a lot of class-A buildings set to come online. But I think we're strong enough locally that the major developers are going to be able to make it through."

- Josh Brown

Jeff Ainslie, president of Ainslie Group, a Virginia Beach-based homebuilder

The election's outcome won't do much to affect home builders, Ainslie said. "But everyone was anxious. I think now that the election is over, that's one worry that people will have off their minds."

Even if consumer confidence picks up, Ainslie said, home loans are still hard to come by.

"The problem we have is 25 percent of our sales this year fell through because they couldn't get financing," he said. "Most of our houses are presold before we start them. We don't do too much spec now."

- Josh Brown

Wayne Wilbanks, managing principal and chief investment officer of Wilbanks, Smith & Thomas, a Norfolk investment advisory firm

Wilbanks said that having the election out of the way is a positive for investors and the economy.

"Change was the big word during the campaign," he said. "People were ready for a forceful leader, whether it was Obama or (Republican nominee John) McCain, who could say, 'I've got a plan' " and then act on it.

The investment community is closely watching Obama's Cabinet appointments, Wilbanks said, and investors want to see a Treasury secretary who understands Wall Street and the capital markets. That's because the foremost tasks for the incoming administration include stabilizing the credit market and spurring bank lending.

Wilbanks said he expects Obama and Congress to craft an economic stimulus plan and put it in place early next year. If devoted to upgrading the nation's infrastructure, the program is likely to generate long-term jobs.

However, the sharp decline in gas prices and the thaw under way in the credit market are likely to have a much greater impact than the next administration's stimulus plan, Wilbanks said.

- Tom Shean

Gary McCollum, senior vice president and general manager of Cox Communications Inc.'s Hampton Roads operations, based in Chesapeake

"It's too early on to make a true assessment right now," McCollum said. "Obviously,

the economy and how we deal with that, that's going to be the No. 1 priority for the Congress and the administration."

Cox recently filed a petition with the Federal Communications Commission, arguing that Hampton Roads has enough competition in the paid-television business to justify the removal of some regulations on its practices and pricing.

The FCC's leadership could change before that process has concluded.

"Clearly the administration is going to make presidential appointments from a regulatory point of view," McCollum said.

- Carolyn Shapiro

Irene Leech, president of the Virginia Citizens Consumer Council and professor of consumer affairs at Virginia Tech

"It's likely to mean consumers are in a better position than we have been for the last eight years," Leech said.

The president can influence legislative measures related to payday lending, financial literacy, funding for the Consumer Product Safety Commission, investment in alternative fuel technology, and telecommunications regulation.

With Obama in office, consumers can expect that legislators will consider their concerns in these issues, Leech said. "It isn't just the interests of business."

- Carolyn Shapiro

Jim Ricketts, director of the Virginia Beach Convention and Visitors Bureau

"There's a lot of positive energy flowing throughout the country. People know who the president's going to be," Ricketts said. "From a confidence level, that helps a lot moving forward."

Obama has expressed his support for the Travel Promotion Act, which would establish a national tourism office, funded by a $10 fee on international visitors whose travel visa requirement is waived. The measure passed the House but never made it through the Senate this year, Ricketts said.

Obama also has spoken about the nation's "deteriorating" air travel system and travelers' growing aversion to flying. "He understands tourism issues," Ricketts said, "and that's a very positive thing."

- Carolyn Shapiro

Lawrence Bibbins, Norfolk resident who was recently laid off as manager of a beauty salon

"I do believe, with the new candidate, it's going to create a lot more opportunities, as far as getting funds for education. History is being made. There's a whole new vibe in the air. People are feeling good. It starts with a mind-set. You can see that across the nation."

Alicia Davis-Wilkins, a substitute teacher from Portsmouth

"The intent is for a global upgrade for citizens, versus just a Wall Street upgrade. I don't think they're going to maintain the tunnel vision. I think he'll have a strategic approach to the economic issues, weighing the costs and benefits of every adjustment.

"It's going to put a different thinking cap on how companies use the work force, domestically versus internationally. I don't think they're going to lose NAFTA; I think they're going to cut it back."

- Philip Walzer