Boom to Bust in El Dorado

Posted by: Phil Mintz on June 23

The Midwest’s farms and factories are being hit hard by the recession. BusinessWeek recently asked students in the business journalism program at the University of Missouri School of Journalism to see how communities in the region have been affected by the downturn. Here is another of their reports.


By Beth Carpenter and Sarah Orscheln

The city is nicknamed “Arkansas’ Original Boomtown,” but El Dorado’s boom has turned to bust over the last few decades. This city of 20,000, just north of the Louisiana border, is supported by manufacturing companies like Chemtura, Pilgrim’s Pride and Murphy Oil .

But like many other American cities that rely on manufacturing, El Dorado has seen jobs disappear over the last five years. Its residents can tick them off—an automotive parts company shuttered its El Dorado plant in 2006, taking 400 jobs, a timber company closed its doors last year. The region’s biggest employer—chicken-processing company Pilgrim’s Pride, operating in Chapter 11 bankruptcy—closed its El Dorado plant on May 8. More than 800 jobs were lost, following 600 jobs lost in Pilgrim’s first wave of layoffs last September.

“We hear there is going to be a recession, but—we elect not to participate,” shouts a roadside sign in capital letters on one of the routes leading into town. Yet many of the buildings seen in El Dorado’s outer limits are closed, and gas stations sit idle with their windows knocked out. El Dorado had 10.7% unemployment as of February, well above the state unemployment rate of 6.7% in February.

Still, Richard Mason sees this as an opportunity. Mason, a lifelong El Dorado resident, and his wife, Vertis, own many of the properties in El Dorado’s revamped downtown square, and Mason himself planted trees around the square’s edges. They have a vision of a new, more stable El Dorado, whose economy is based around a more educated work force.

Indeed, Claiborne Deming, the former CEO of Murphy Oil and a relative of the original Murphy founders, proposed to the board that the company, a Fortune 500 company based in El Dorado, endow a $50 million trust to be used for college scholarship for graduates of El Dorado High School. The program, based on a similar plan in Kalamazoo, Mich., went into effect in 2007.

Following up on local enthusiasm for the plan, El Dorado citizens then voted for a sales tax increase that will bring in an estimated $35 million in receipts over the next 30 years. That money is being used on projects like the new convention center going up in town.

Mason, Deming, and other longtime residents hope that the scholarship program, called the El Dorado Promise, will help pull in “the kind of families who want their children to go to college,” and so far, it seems to be working: Enrollment at El Dorado schools is finally swinging up, with a 4% increase in the school district since the announcement of the scholarship.

This May, a new crop of graduates left El Dorado High School, and 95% of them plan to go on to post-secondary education. The 2007 graduates are now finishing their second year of college, and 67% have continued their education, well over the Arkansas state average. “It’s not a silver bullet,” Friar Gregory A. Pilcher, priest at the local parish, says; but for more than a few young people, it’s a light at the end of the tunnel.