The Recession's Six Degrees Of Separation

Barrels of wine at Fetzer Vineyards
Barrels of wine at Fetzer Vineyards, who has lost business due to the recession.

At the Twin Oaks Country Inn in Wilmont, Wis., fewer diners means there's little need to refill the wine shelves.

Their once-popular house wine comes from Fetzer Vineyards in California, where Winery Director Mike Haering admits falling restaurant sales have him over a barrel, reports CBS News correspondent John Blackstone.

But in Fetzer's warehouse unsold cases are already growing into a mountain.

The decline in restaurant sales has been partially offset by people buying wine to drink at home.

"We're down 6 percent of what expected to do for our plans," Haering said. "That's the equivalent of 2.5 million bottles."

Two and a half million fewer bottles sold means less of everything.

"It impacts what glass, what labels we need, how much fruit," Haering said.

So many impacts, it creates two branches in our tree.

The first branch goes to Butch Cameron's fleet of 50 trucks that move wine for Fetzer and other California wineries.

"Our revenues are down 40 percent this year," Cameron said. "For us, that is into the millions."

About $2 million less this year. He's slashed his workforce from 60 to 25.

Miguel Contreres is the only fulltime mechanic left. He'll lose $10,000 in overtime this year.

"I am still nervous because you never know what's going to happen to the economy," Contreres said.

On our other branch there's plenty of nervousness on the wine country spread where Jim Caudill and his wife, Char, live.

"We've been here 8 or 9 years raising horses," said Char Banach.

Jim Caudill is an executive laid off by Fetzer's parent company.

"Didn't expect the notice and it obviously turns your world upside down a little bit," Caudill said. "Obviously, it is not just my job that is disappearing. Half my 401(k) disappeared. My house has gone down in value."

Caudill will say only that his salary was in the six figures, an amount hard to match in this economy.

"The first conversation we had was 'do we want to fight to stay here?' and it doesn't take much to look around and say 'oh yeah, we're going to fight to stay here,'" said Caudill.

"We went - 'Eeeh!' - and put on the brakes all the way around," Banach said.

Putting on the brakes includes dropping plans to enter horse shows that can cost $2,000.

"She is material to go on to the nationals," Banach said patting a horse."But we won't be going."

They'll no longer pay trainer Patti Belanger $400 a month. She's lost so many clients she can barely cover expenses.

"I probably put in the bank about $60 a week," Belanger said.

Teaching kids about horses helps keep her afloat, but she can't spend anything on equipment.

Which takes our financial family tree to Martin Cohen. His patented stirrups retail for about $180 a pair. He expects sales to fall from $250,000 last year to $125,000.

"This year we have to pull back," Cohen said.

A 50 percent pullback, hitting the factory where the stirrups are made - far away in China.

  • John Blackstone
    John Blackstone

    From his base in San Francisco, CBS News correspondent John Blackstone covers breaking stories throughout the West. That often means he is on the scene of wildfires, earthquakes, floods, hurricanes and rumbling volcanoes. He also reports on the high-tech industry in Silicon Valley and on social and economic trends that frequently begin in the West.