Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 24, 1993 TAG: 9301260386
SECTION: NEW RIVER VALLEY ECONOMY PAGE: 2 EDITION: NEW RIVER VALLEY
SOURCE: MICHAEL STOWE STAFF WRITER
DATELINE: LENGTH: Long
ARSENAL MASKS IMPROVEMENT
The year has gotten off to a rocky start, but manufacturing and economic development officials are hopeful that the New River Valley's economy will rebound in 1993.Already, 730 workers have been laid off from the Radford Army Ammunition Plant and arsenal officials said it looks like another 300 jobs could be eliminated before the end of the year.
That's a couple of tough blows for an area that already has an unemployment rate hovering around 10 percent.
The brighter side of the picture is that, despite the cutback in defense jobs, the overall economy appears to be improving, according to several manufacturers around the valley - some of which already have started hiring more workers.
With the arsenal layoffs, the year ahead will be tough for many families as they try to make the transition into new jobs unless a new company moves in and hires more than 500 workers.
Many will take advantage of a federal job-retraining program and return to school, a few will find other jobs and some will leave the area to look for work.
"The arsenal layoffs will hurt our economy because people will have less money to spend," said Brad Denardo, executive vice president for the National Bank of Blacksburg. "However, that's not necessarily reflective of our economy. It may not be easy, but we'll survive."
Hiawatha Nicely, vice president of operations for Magnox Inc. in Pulaski, said the ammunition plant is paying the price of peace, not necessarily suffering from the recession.
At the same time as these layoffs, other local companies have started to expand and hire new workers, and a few new companies have moved into the New River Valley. Those are signs of an improving economy, Nicely said.
"I don't think we have the capacity today to absorb all the lost arsenal jobs, but over time I think we will," he said. The arsenal has laid off more than 1,300 workers since last January.
"I don't think it's nearly as gloomy as it was at this time last year. Now, it seems like there's at least some light at the end of the tunnel," Nicely said.
Magnox will complete construction of a new $10 million production line in June, and Nicely said he expects the company to hire 15 more workers.
Production also recently started at the $30 million BBA Friction Materials brake-parts factory in the Pulaski Corporate Center.
BBA has about 20 people on the payroll, mostly from the New River Valley. Lloyd Broadstreet, director of operations, said he expects employment levels to reach about 50 by year's end and 120 to 150 within two years.
There also will be some jobs created at the new Cross Creek Apparel facility in Floyd County. The factory, located in the former Pannill Knitting Co. building, opened in October with 25 workers.
Plant Manager Jeff Copeland said production is going well and the company gradually will increase employment to about 250 workers. At capacity, the plant will produce more than 250,000 shirts a year.
"We expect 1993 to be a real good year for us," Copeland said.
The same is true at Corning Inc.'s plant in Christiansburg. This month Plant Manager Bob Hoover announced a $12 million expansion that will create 30 jobs.
Thirty jobs here and there won't reduce the unemployment rate greatly, but every little bit helps, said Don Moore, executive director of the Montgomery Regional Economic Development Commission.
"The vitality of some of our companies is great," he said. "We also have several strong prospects that are thinking about locating here."
Al Bowman, president of Poly-Scientific in Blacksburg, said his plant will hire about 20 workers when Poly-Scientific closes a plant in Delaware County, Pa., and moves some of its operations here.
"It's a small gain for this area, but a big loss for that community," he said. The Pennsylvania factory employs 225 workers.
In addition to hiring new workers, Bowman said, a few employees will transfer from Pennsylvania.
Any job gain is quite a turnaround for the Blacksburg company that makes security systems, fiber-optic gadgets and slip rings for military and commercial markets. In 1991, Poly-Scientific laid off more than 170 workers.
Bowman said Poly-Scientific expects to see a slight increase in production.
He evaluated the area's economic status this way: "If your neighbor loses his job, it's a recession; if you lose your job, then it's a depression."
And while some companies aren't predicting job gains in 1993, they also don't foresee layoffs.
"We're not seeing it as a banner year for sales, but our employment levels will probably stay about the same," said Al Guarino, plant manager of the Woolverine Co. in Blacksburg.
Pam Shiflet, human resources manager for Hoechst-Celanese, said the Giles County plant has weathered the recession fairly unscathed because much of the company's synthetic fibers are sold overseas.
"We are guardedly optimistic about the year ahead," she said. "In the short run we don't see any increase or decrease in our employment."
Officials also are optimistic that the local economy will get a jump-start from the $613 million in state bonds approved by voters in November, which will fund more than $60 million in construction projects at local colleges.
Economists had estimated that the construction in higher education, parks, recreation and mental health would bring about 3,600 jobs statewide over the next five years.
Southwest Virginia, which will get $120 million from the referendum, probably will get as many as 700 jobs over the next five years, said Larry Hincker, a spokesman for Virginia Tech.
The new jobs will be spread across the state, "but they will stimulate the economy. . . . The money will create activity and get things done here," said Tom Johnson, a professor of agricultural economics at Tech.
But even though the economic forecast for the New River Valley isn't all gloom and doom, the loss of 700 jobs certainly means the area's unemployment rate will remain among the highest in the state.
Jill Barr, economic development director for Radford, said she thinks the jobless rate will begin to drop in 12 to 14 months.
"The arsenal jobs won't be replaced immediately," she said. "I see this year as being a mirror of 1992 - nothing much changing - but eventually something has to give and the situation will improve."
A lot of unemployed workers sure hope so.
Staff Writer Madelyn Rosenberg contributed information for this story.