Redmond and Prineville, Oregon
Central Oregon as a whole had struggled since the fall of Big Timber. We visited two more towns in the region: Redmond, which is emerging as an aerospace center, and Prineville, which has cast its lot with the distinctively modern industry of running data centers.
The Redmond story is again one about the incidental effects of personal decisions. When the Klapmeier brothers were working in a barn in Wisconsin to design what ultimately became the very successful Cirrus airplane, their West Coast counterpart, contemporary, and competitor was a man named Lance Neibauer. Neibauer, who when I met him in the 1990s had thick, dark hair and a wide mustache of the kind sometimes called a pornstache, was designing a plane that was meant to be a Ferrari or an Alfa Romeo, in relationship to the Audi or BMW the Klapmeiers were trying to provide. That is, the midwestern brothers were trying to create a product that would be safe, comfortable, and nicely finished. Lance Neibauer, on the West Coast, with a company named after himself called Lancair (pronounced lance-air), wanted to build a plane that was fast.
The first Lancair models came to market at about the same time the first Cirruses did. For a combination of reasons—luck; the appeal of the Cirrus parachute; the more-cramped test-pilot-style cockpit of the much faster Lancair; and, if not exactly luck again, good fortune, when the Chinese government decided to invest in Cirrus—the Klapmeiers’ company made its way through the financial crises of 2001 and 2008 much better than Lancair did. Neibauer’s company became a subsidiary of Cessna; its models were renamed the Columbia; and it stayed in business with a production rate roughly one-tenth that of Cirrus.
But much as the Klapmeiers’ decision to move to Duluth became the basis for an aerospace complex there, and Jack and Laura Dangermond’s decision to move from Cambridge back to Redlands transformed their hometown, so the partial success of Lancair helped make Redmond, the original base of the company, the site for further start-ups. Engineers and designers in Redmond already had experience with aircraft; the necessary machinery was on hand in local workshops; and people in the industry were familiar with Redmond, from their calls on Lancair during its most ambitious era.
As a result, by the time of our visit a cluster of small aviation companies had developed near Redmond’s airport—including Stratos Aircraft, which employed several dozen designers and engineers working on the Stratos 714, a “very light personal jet” that would fill a then-tempting niche in the travel market. Corporate jets, from Gulfstream or Hawker or Cessna, were fast but cost tens of millions of dollars. Small personal planes, like the Cirrus, were much less expensive—but much slower and more exposed to the vagaries of weather (because jets can fly above most bad weather, while most propeller planes have to chug along at lower altitudes, right through it). A very small jet—essentially like our Cirrus, but pressurized (so it could fly high) and with a jet engine (so it could fly far and fast)—would be in the middle. Cirrus was also working hard on exactly such a project, with the Vision Jet, which Chinese financing allowed it to build, and which it introduced in 2015. “We think we’ll be successful here,” Carsten Sundin, who is originally from Norway and is now Stratos’s chief technology officer, told me. “We think we can go 50 percent faster and 50 percent further than the competitive airplanes.”
Private aviation is a notoriously risky market, not just for pilots and passengers but for entrepreneurs as well. Sundin told me that the company believed it could be sustainably profitable by selling twenty-five planes per year, which would mean capturing about 10 percent of the relevant world market. The interesting aspect to me was why this company, along with suppliers and other related firms, ended up where it was.
“Lancair and its descendants are connected in one way or another with all the aerospace activity around here,” Sundin said. He himself, after starting out in Norway and spending his grade school years in Malaysia, had come to the United States in high school, as an exchange student to Roswell, New Mexico, and learned to fly there. His interest in aviation brought him up to Redmond, to meet with Lance Neibauer. He ended up liking the area and leapt at the chance to join Stratos when it started in 2008.
On my way out of Redmond, after touring the facility and sitting in a mock-up of the new plane, I saw a bumper sticker that concisely summed up the “locational theory” I had heard from the likes of Dino Vendetti and Carsten Sundin. VENI. VIDI. VELCRO, the sticker said. I came. I saw. I stuck.
Prineville is by far the hardest hit of these three cities. In its heyday, Prineville had been a very profitable timber center, but like many other cities in the region it had seen that business collapse. The other mainstay of the local economy had been the headquarters of the Les Schwab Tire chain, which had spread to hundreds of locations across the western United States from its founding location in Prineville. A laudatory article about the company in Tire Business magazine in 1995 pointed out that in a city whose population was only five thousand, some six hundred people worked directly for Les Schwab. But in 2008, just as the national economy was in post-crash freefall, the company moved its headquarters to Bend, eliminating hundreds of jobs.
In Prineville I spoke with John Shelk, a leader of the lumber industry in its heyday and now someone trying to imagine a future for the business and his town. When we met he was in his seventies, standing erect and with abundant white hair. We met at the modest offices of Ochoco Lumber, which was founded in the 1930s and of which his family had long been majority owner. In the decades after World War II, the Ochoco mills employed hundreds of foresters, sawyers, and other high-wage workers in its plants. The trees that they cut, barked, and fashioned into timber to ship around the country and the world came from the nearby Deschutes and Ochoco National Forests, which the U.S. Forest Service had opened to commercial lumbering operations in the late 1940s.
The industry collapse that affected the rest of the region affected Ochoco as well. By 2001, its sawmill closed for good. At the time, the mill still employed some 250 people, almost none of whom would ever find logging work again. Too many of the larger trees were gone; the environmental rules and standards had changed; such work as was left was more mechanized, with fewer employees.
“While we were developing our markets, especially in Japan, we assumed that the harvest from the national forests would inevitably decline,” Shelk said. “But we never imagined that it would go immediately to zero,” which was how he viewed the consequences of the new restrictions placed on loggers during the Clinton administration. The Clinton-era plans, he told me, “effectively eliminated commercial timber harvest on these forests, thereby dooming the remaining sawmills in central Oregon.” After World War II, nearly a quarter of Oregon’s entire economy was based on forestry. Now it’s barely 2 percent; this is the Pacific Northwest’s counterpart to the saga of Appalachian coal. In recent years, as a senior statesman of the timber industry, Shelk has worked with environmental and scientific groups, state and federal regulators, and both Republican and Democratic politicians (notably Oregon’s Democratic U.S. senator Ron Wyden) to devise a sustainable-harvest plan to revive at least part of the region’s forest-based economy.
Shelk drove me around the ruins of what had been his family’s factory. Many of the buildings remained only as deserted hulks. Some had been bulldozed into clear lots. On the site of one, a new hospital now stood. “Of everything I see here, that’s the one I feel good about,” he told me.
A mile or two away were the vast warehouse-scale structures that were part of Prineville’s next economic hope. These were data centers for Facebook and Apple, totaling well over $1 billion in investment cost and millions of square feet of space. They were drawn to the region by its low electric-power rates and its steady cooling wind—along with property-tax exemptions. Facebook cast itself as an active member of the community, opening its building for tours and for school-group events. Apple operated behind a wall of secrecy—no tours, no identifying sign or flag outside its buildings, no encouragement for local contractors or employees to say anything in public about their jobs or even where they worked.
We spent a day inside the Facebook site, which is mainly endless corridors of computers and cabling, and looked at Apple’s only from the roadway—and from above, when we flew out of town. Together the firms represented this region’s entry into the highly automated next economy: much greater capital investment than the old tire and timber facilities, comparatively fewer jobs. Building the new data centers creates hundreds of construction jobs in town; operating them requires many fewer people.
Still, it was progress. “We’re celebrating here at the city,” Steve Forrester, the city manager of Prineville, told The Oregonian after Facebook announced another expansion in 2017. The county’s unemployment level had fallen from a catastrophic 20 percent in the late 2000s to around 6.5 percent—much worse than the national average, much better than it had been. “That’s what this is about,” he said.