Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, February 22, 1991 TAG: 9102220125
SECTION: BUSINESS PAGE: B4 EDITION: METRO
SOURCE: GEORGE KEGLEY BUSINESS EDITOR
DATELINE: LENGTH: Medium
Earl Smith told the Regional Partnership's annual meeting that his Southfield, Mich. company is so impressed with the Roanoke Valley that "if we can get our act together, we'll be back" with plans for a new plant making another product.
The company earlier this month said the economy's impacts on its operations had forced an indefinite hold on its plans to construct a brake plant at Glenvar.
Smith said he has never seen "as marked a deterioration of automotive sales" as the decline stemming from the recession and the Persian Gulf crisis.
The Roanoke Valley is "the perfect place" for the company's brake plant, he said. But contracts the company has with customers and Allied-Signal's capital spending cuts require that the brake operation be available at an existing plant much sooner than the original plan for full production in Roanoke in 1994.
Smith, Allied-Signal's vice president for program management, said the company must select a plant for the disc brake production by April 1.
Within six months or "a little longer," Allied-Signal intends to develop a new plan for use of its Roanoke County location, he said.
"We're not the least bit interested in giving up this outstanding site," Smith said. "We'll watch the economic indicators and try to influence our corporate planners. . . . If we can, we will" come here, he added.
Fortunately, Allied-Signal Automotive has other needs for plants making such products as master cylinders and hydraulic boosters, "requiring the same state-of-the-art upgrading" and the same size - 300 employees and 275,000 square feet - as the disc brake plant, he said.
And if that doesn't work, the company's aerospace and engineering groups may need the location. But Smith said hasn't yet told other Allied-Signal divisions about the Roanoke site.
The brake plant could have brought an investment of $250 million in three years with only a modest return on investment, Smith said. This would have been all right in better times, but not in a recession, he added.
Much of the pressure to stop grading and construction at the site comes from a slump in car sales, down 35 percent last year, he said. But Smith said he expects a return to former car-sale levels by the fourth quarter of this year.
Smith warned this would be the worst time for Roanoke Valley to back off on economic development activities.
Myron Apple, Allied-Signal's manager for the brake plant construction, said he will be working with Smith and other company executives on the next plan for use of the county site.
Despite the economic downturn, James Young, partnership vice president, said the regional development organization had its most productive year in 1990, with eight companies announcing locations or expansions, for a combined investment of $109 million and a potential of 1,900 new jobs.
The partnership's inquiries from expanding companies grew to 446 last year from 250 in 1989 and its prospect list increased from 24 to 32, according to its annual report.
"We are all being battered by the economy," Young said. But he called 1991 "our window of opportunity."
At a time when funding is tight and government support gets only half of the job done, the business community "must help put Roanoke Valley on the map," he said. "We must continue the momentum we have built."
by CNB