Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 24, 1993 TAG: 9301260036
SECTION: ECONOMY PAGE: EC-15 EDITION: METRO
SOURCE: DANIEL HOWES STAFF WRITER
DATELINE: LENGTH: Long
'92 MOVED VALLEY INTO REAL WORLD
Lest some folks still think Roanoke exists apart from the bustling, sometimes brutal, global economy, 1992 should have finally convinced them otherwise.Companies closed, idling hundreds. Elsewhere, work forces were trimmed and vacancies went unfilled. The struggle to reopen a treasured downtown hotel continued, complicated by a wary investment and lending climate. A bank thought to be as much a part of Roanoke as its pristine mountains surrendered itself to a North Carolina financial powerhouse.
So what about '93?
No one - neither the bosses who hire and fire, nor the economic developers always chasing new business - knows for sure.
Carilion Health System President Thomas Robertson forsees changes coming in how his company and others like it do business. "I think you'll see fewer dollars spent on health care in the next three to four years," he says.
Already, Carilion - Roanoke's largest employer - is starting to see slight reductions in the use of its hospital services, in part an indication of increasing vigilance by health insurers determined to contain costs. And how President Clinton tackles the health-care reform debate will determine the direction companies like Carilion take in the future.
The next year may prove crucial.
The sale in March of Dominion Bankshares Corp. to First Union Corp. of Charlotte, N.C., has the economy-minded elites worrying about yet another loss of white-collar managers - the kind of jobs most difficult to replace in an environment where downsizing is king.
Lawrence Davidson's company, Davidsons, makes its money dressing the white-collar men who own and run Roanoke businesses. How they fare determines, in part, how Davidsons fares; lost jobs can mean lost sales.
"The effect of the Dominion merger was cranked into our strategies years ago," Davidson says. "That was going to come; it was a question of when. I don't know what kind of effect it's going to have. It's going to have some."
White-collar workers do more than buy homes and cars and drive consumer spending with their midrange salaries. They help lead community groups and churches; some coach soccer or help with Scout troops. They contribute to the United Way and Mill Mountain Theatre; they volunteer to make calls for Renew Roanoke, the campaign for reopening Hotel Roanoke.
"The executive-type jobs are very difficult to bring to a community this size," says Elizabeth Doughty, executive director of the Roanoke Valley Economic Development Partnership. "I'm not overly optimistic that we can. The things that happened in '92 . . . are not unique to this community. I don't think we're automatically immune to all the forces that affect other regions of the community."
First Union's acquisition of Dominion is "a psychological blow to our sense of security," she said. "It's very similar to what happened to the railroad after the merger" more than a decade ago.
But Doughty and others who try to encourage industrial development here see some bright spots on the horizon:
Norfolk Southern Corp. is looking to locate its new national customer service center - and 400 jobs, most of them new - in either Roanoke or Atlanta. Planners expect a decision anytime, and think Roanoke still has a good shot at the latest railroad prize.
First Union is thought to be considering a redeployment of employees that could bring as many as 500 additional jobs to the valley. That would partially offset the already announced loss of nearly 1,300 jobs systemwide, 850 in Roanoke.
Industrial prospect activity has risen sharply in recent months, especially since the November election. Most prospects have come from the manufacturing sector, signaling likely difficulties in replacing lost white-collar workers.
"It's been encouraging," says Tim Gubala, Roanoke County's director of economic development. "And it's accelerated since the first of the year."
Brian Wishneff, Gubala's Roanoke counterpart, agrees: "I'm much more optimistic than I was two, three weeks ago because there are some prospects on the horizon." Characteristically, no one is talking about who might decide to locate in the valley - or when.
"Manufacturing, distribution . . . you see more of those kinds of [development] projects" than opportunities for midlevel, white-collar managers, Wishneff says.
But for all the talk of - and hoping for - new industrial prospects, it's the expansion or reduction of homegrown companies that determine the economic health of Roanoke and communities like it.
"The irony is that in the last two year - '91 and '92 - Roanoke led the state in job growth," Wishneff says. "And here, as it's bottoming out, we get our own problems."
Wishneff worries about increasing vacancies in downtown office space once First Union's acquisition of Dominion is completed in the next few months. Already, the Colonial Arms building on South Jefferson Street, the former Coreast offices on Church Avenue and the old Woods Rogers & Hazlegrove headquarters on Franklin Road stand vacant, monuments to the recession and Roanoke's own office building boomlet.
Before announcing its sale to First Union, Dominion said it intended to continue using office space in the current headquarters building even after selected departments and senior management moved into the new Dominion Tower.