Northwest companies weather Great Recession

The corporate Northwest came through the Great Recession and its aftermath in better shape than anyone could have hoped.

Except for Washington Mutual, it suffered no major bankruptcies. Nor was it a victim of much of the consolidation that has snatched important headquarters out of so many regions. The loss of Safeco's independence and the radical downsizing of Northwest icon Weyerhaeuser were baked in the cake before the collapse.

As remarkable is Alaska Airline's performance, which landed it in the latest No. 1 spot of the Best of the Northwest. This in an industry that has suffered ongoing bankruptcy reorganizations, mergers and the damage of high oil prices.

So the diverse, powerful corporate base of the Northwest remains strong. We continue to attract world talent and capital formation, no small accomplishment compared with many regions facing intense global competition.

We've got iconic world companies, such as Amazon.com, Starbucks, Microsoft and Nike. We've got a universe of smaller public companies that are leaders or highly competitive in their niches.

And, sure, we've got plenty that struggle, mess up, rebound, frustrate investors. But at least they're still here.

And a striking number actually produce valuable goods and services for a global market, as opposed to gambling with credit-default swaps.

If you have a real job with one of these companies, or are a major shareholder in many of them, you are on the fortunate side of the two-track economy that is apparently the new normal.

Strong companies entered the recession with little debt, a key determinant of life or death in the financial panic and high leverage that marked this downturn.

They were poised for a rebound not seen at a similar point during the Great Depression.

This time, gross domestic product recovered to its pre-recession levels. Corporate profits after taxes hit a record $1.67 trillion in the first quarter of 2012 after a trough of $644 billion in the third quarter of 2008.

The greatest damage has been to small businesses, government, the social compact and especially the jobless, which are not directly represented in the Best of the Northwest.

With U.S. unemployment at 8.2 percent in May, Washington's jobless rate stood at 8.3 percent and Oregon's at 8.4 percent. Idaho unemployment was 7.7 percent in April, the most recent data reported. It will take years for this to heal. For many people, times will never be as good as they once were, however well larger public corporations are doing. But without the corporate ecosystem here, especially in the Puget Sound region, most people would be doing far worse.

Now the question becomes how these companies navigate the next risky wave of this benighted business cycle?

The World Bank warned last week, "The world economy is once again in a precarious situation," and "volatility and uncertainty are here to stay."

Recession in Europe and the eurozone crisis are foremost among the present troubles. Starbucks executives told an investor presentation last week that it is struggling "more than expected" in Europe and the situation is likely to get worse.

Beyond the European business that Northwest companies are losing is the contagion of the crisis, which already is being felt with a slowdown in China, our most important trading partner. Growth has lately decelerated in the United States, too, where the median family wealth plunged 40 percent from 2007 to 2010.

Beyond this, 200 million people are unemployed on this crowded planet. Poverty is rising. Environmental damage continues, not least with human-caused climate change. The threat of social upheaval as a result is great, International Monetary Fund chief Christine Lagarde warned last week, in calling for more sustainable growth.

Wall Street will demand growth of any sort. As for our public companies, the only certainty is that the Best of the Northwest will be different next year. I just hope it's not smaller.

You may reach Jon Talton at jtalton@seattletimes.com. On Twitter @jontalton.