Phil Tulkoff’s family has owned a Baltimore condiment company for more than 90 years, and he’s uneasy. Not because business at Tulkoff Food Products is bad — he lived through that this spring — but because it is suddenly good.
“I don’t know what to expect,” said Tulkoff, the company’s president, who employs about 100 workers. “I watch the news and think it has to go down again.”
After a slump in April and May prompted a shutdown of three of four production lines at his factory near the Port of Baltimore, demand roared back in June as restaurants and retailers hungered for products like minced garlic, horseradish and cocktail sauce, which are among Tulkoff Food’s most popular offerings.
Tulkoff is grateful for the rebound, but his apprehension is shared by thousands of other business owners: While sales have returned to healthy levels, the surge in coronavirus cases in many parts of the country threatens the comeback.
Indeed, the economy’s uncertain trajectory is reflected in recent employment data. On one hand, the Labor Department reported that payrolls grew by 4.8 million in June, including a gain of more than 2 million in the hard-hit leisure and hospitality sector, which includes bars and restaurants.
Yet on Thursday, the government reported that new claims for state unemployment insurance topped 1 million for the 17th week in a row.
So even as millions go back to work, millions of others are newly unemployed, threatening both their personal finances — particularly with a $600 weekly federal supplement to unemployment insurance about to expire — and their ability to help drive the economy’s recovery.
The situation at Tulkoff Food Products is especially perilous because half of the company’s orders come from restaurants and bars, a sector that collapsed in March as the coronavirus pandemic spread and stay-at-home orders went into effect.
After a gradual reopening, indoor dining in many parts of California, including Los Angeles and San Francisco, was newly banned this month. In Texas and Florida, bars have been shuttered after initially reopening and attracting hordes of quarantine-weary patrons. Tulkoff hasn’t seen any effect from these moves, but he knows from the wave of shutdowns in March how rapidly things can change.
“The downturn came on so quickly, it was like someone pulling the plug from a bathtub,” he said.
Rather than lay workers off, Tulkoff took advantage of a Maryland program that allowed him to cut employee schedules to four days a week, with the state picking up the cost of the fifth day. He also received a loan of just over $1 million from the federal Paycheck Protection Program. The paycheck protection loan was a welcome cushion, but Tulkoff intends to return the money because the rebound has made it unnecessary.
Tulkoff shut the company’s California plant in May, eliminating 34 jobs. Much of that output will be taken over by a new plant that is getting up to speed in Cincinnati. At the main factory in Baltimore, roughly 60 hourly employees are working 40 hours per week, plus overtime. The company is looking to fill five more slots, which start at $12 per hour.
“It’s been a roller coaster,” said Buddy Dietz, the chief operating officer. “It’s hard for us to tell whether it’s for real or not.”
An engineer by training, Tulkoff, 59, grew up in Baltimore and graduated from Bucknell University in Pennsylvania, but didn’t join the family firm initially, instead working on the space shuttle program at NASA. He has two children in their 20s.
As chief executive for the last 15 years, Tulkoff has run the company conservatively, averse to debt or risky new product lines. For now, the company is solidly profitable. But he finds himself worrying about the resurgence of the virus. “It keeps me up at night,” he said. “It’s my biggest nightmare to see all that equipment idle again.”