Hometown Pride Turns to Bitterness
Wyatt Waters never owned a scrap of WorldCom Inc. stock or set foot in its hulking headquarters with the big black gate and big black windows a mile down the road.
He was unimpressed at first when the telecommunications giant relocated to his little town, saying the only thing Clinton got out of it was a firetruck with a ladder. But like so many others in Mississippi, Waters, a watercolor artist, became a believer.
WorldCom turned into the state’s Cinderella story, a home-grown venture born on the back of a napkin that grew to knock out corporate heavyweights and become Mississippi’s first--and only--Fortune 500 company.
“We were rooting for WorldCom because it made us all look good,” Waters said Thursday as he reached for a homemade pickle in his downtown gallery. “Now, I guess, we feel let down.”
As details emerge of a massive accounting scandal at the nation’s No. 2 long-distance provider and WorldCom’s stock price searches for zero, Mississippians brace for hundreds of job cuts and something even harder to swallow: lost pride.
Its founder, Bernard J. Ebbers, had been lionized as a Ted Turner-like hero, an irreverent executive known for daring mergers, cowboy boots and shooting the breeze at local truck stops.
Folks in Clinton, a suburb of Jackson, used to look forward to seeing the tall, bearded man--once worth a billion dollars--chatting under the oaks at the local college, stooping beneath the striped awnings of the postcard downtown and teaching Bible class on Sundays.
Now there’s a certain bitterness. Especially among shareholders.
“A lot of us held on to the stock because we believed in Bernie,” said Margie Smith, a longtime investor and Jackson-area resident.
And that’s just it. Mississippi is not crammed with rich people or stockbroker types. For many investors, WorldCom felt safe because they had mingled with the executives running it. Ebbers, who lives in nearby Brookhaven, has declined interviews. He resigned as chief executive in April after it was disclosed that he owed WorldCom more than $400 million for loans he took to cover bad stock bets.
Clinton and WorldCom might seem an incongruous pair. WorldCom was one of the top-performing stocks of the 1990s, going from 81 cents to $64. Mississippi remains one of the poorest states: 49th in household income, 49th in money spent on education and 50th in homes with phones.
It was a basketball scholarship that brought the 6-foot-4-inch, Canadian-born Ebbers to Mississippi College, a small Baptist school in Clinton, in 1967.
After completing school, he became a coach. Then, in 1983, at a coffee shop in Hattiesburg, about 100 miles southeast of Jackson, Ebbers and three friends hatched an idea for a long-distance phone company.
Ebbers jotted details down on a napkin. According to local lore, the name, Long Distance Discount Service, was supplied by a waitress.
The company moved to Jackson a few years later. As it grew, so did the area’s commercial profile.
“He put us on the map,” said Jehu Brabham, a Clinton alderman. “I don’t think there’s any doubt that the success of WorldCom helped us attract important industries, like the new Nissan plant.”
Many people are hoping the plant, opening next year near Jackson and expected eventually to employ 5,300 people, will soak up some of the jobs shed from WorldCom, which announced this week that it would slash 17,000 jobs.
In 1998, Ebbers moved the WorldCom headquarters from Jackson to Clinton. The bedroom community of 23,000 is part small town, part homogenized suburb, with strip malls and an interstate slicing through it. The impressive WorldCom headquarters sits behind a Pizza Hut.
Ebbers contributed generously to the community, donating millions to Mississippi College and shoring up local art museums.
By 1999, he was worth $1.3 billion. He was the richest man Mississippi had ever known.
But the empire began to crumble in July 2000, when a proposed giant merger with Sprint failed. WorldCom is the most widely held stock here, said financial advisor Arthur Finkelberg. And many local investors had become so attached that despite a sinking share price and clear warning signs, they held on.
“We thought Wall Street was picking on Mississippi,” said Clinton shopkeeper Lyda Gilmore.
When Ebbers resigned, it was clear the company was in trouble. Now most people accept the possibility WorldCom could disappear.
“It won’t kill the local economy,” said Sherry Vance of the Mississippi Development Authority, the state’s economic development agency.
Clinton is not a one-horse town, and the Baptist college, a car parts factory and the Nissan plant will be healthy employers, she said.
Waters, whose paintings favor sherbet-tinted sunsets, said the presence of WorldCom didn’t spur the rapid development many in Clinton had predicted.
“This place looks exactly the same,” he said, looking out his gallery windows at the copper lampposts and quiet cobblestone streets.
At WorldCom headquarters Thursday, the death dance had begun. News crews stuck cameras between the bars of the black fence, trying to grab a shot of the four-story building. About 1,700 people work here, substantially fewer than at WorldCom’s other major offices in Dallas, Tulsa, Okla., and Arlington, Va.
One Clinton resident showed up with two children and a camera.
“I don’t want them to lose faith in corporate America,” he said, then snapped a photo and drove away.
During the lunchtime rush at Hudgey’s, a packed diner, there were no WorldCom employees to be found.
“I remember when all those folks would come strutting in here thinking they were hot stuff, their name tags sticking out on their chests,” said tile setter Justin Burgess. “I guess I shouldn’t say this, but where are they now?”
