Harry & David's Bankruptcy Rocks Medford, Oregon

In good years, FedEx (FDX) landed DC-8 cargo planes at the airport in Medford, Ore., to haul away Royal Riviera pears, Moose Munch caramel popcorn, and fruit baskets from Harry & David. The planes would start arriving before the December holidays, when the company shipped most of its products, says Bill Hoke, Medford's deputy city manager. Hoke doesn't recall seeing any of the cargo planes last year. Sales at Harry & David, controlled by New York buyout firm Wasserstein & Co., began to slump in 2008 as people cut back on gifts during the recession. The company, whose orchards have been a Medford fixture for more than a century, filed for bankruptcy protection on Mar. 28 after failing to make interest payments on about $200 million of debt.

Hoke and other residents of Medford are now wondering what will become of the region's largest seasonal employer. Each fall, Harry & David hires 6,000 workers to help its permanent staff of 2,000 pick, pack, and ship fruit around the world. "They pay on the lower end of the scale, but a lot of people depend on that second job," Hoke says. People return year after year to jobs at the company, he says, squeezing in shifts around regular jobs or helping a main breadwinner stockpile cash for the holidays.