Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, February 27, 1993 TAG: 9302270093
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: By DAVID M. POOLE STAFF WRITER
DATELINE: MARIETTA, OHIO LENGTH: Long
LOWER ROANOKE VALLEY WAGES LURING OHIO FACTORY
THE ROANOKE VALLEY will come out ahead, for a change, if a pipe fabricator relocates. But it would mean the loss of 110 jobs in a small city in Ohio.
There was a time when everyone in this Ohio River town knew somebody who worked at Dravo.
The company fabricated metal pipe for electrical power plants that were coming on line to meet the nation's insatiable demand for energy.
The company's growth seemed magical. Payroll swelled to 500. The company's unionized welders were among the best-paid workers in this city of 15,000.
"You would have thought it would last forever," said Jerry Devol, a local historian who worked in the Dravo engineering department.
But the company's days in Marietta appear numbered.
Dravo - now known as Connex Pipe Systems - saw its fortunes decline in the early 1980s as energy conservation and global economics all but killed the demand for new power-generation plants in the United States, its primary market.
A British company that acquired Connex two years ago says the operation no longer can survive paying union welders $17.47 an hour.
Connex is looking south - toward the Roanoke Valley in Virginia - where non-union wages are at least 30 percent lower than the going rate in Ohio.
"Unless something unexpected happens, we are likely to move and likely to move to Roanoke," said Chris Fleetwood, chief executive officer of Whessoe Plc., the parent company of Connex.
This weekend, Connex is bringing 25 administrative employees to Roanoke to acquaint them with the area and to view an industrial building at Troutville.
The company is believed to be looking at property once used by RIB Detention to manufacture prison equipment. The building now houses Detention Equipment, a smaller company in the same business.
A possible Connex relocation has been welcomed by the Roanoke Valley, which has lost hundreds of jobs in recent months and faces the loss of even more with bank mergers and the closing of the Sears Telecatalog Center and industries such as Gardner-Denver.
The Connex deal underscores an economic reality of the '90s: Jobs are mobile, and corporations shift operations to communities with the lowest labor costs.
The loser in the Connex move would be Marietta, which has priced itself out of the global economy after 43 years of producing some of the highest-quality fabricated pipe in the world.
Mayor Joe Matthews is sorry to see Connex leave, but he doesn't blame members of the Plumbers and Pipefitters Local 168 for rejecting a 30 percent cut in pay.
"Enough is enough," said Matthews, a retired firefighter and card-carrying union man. "You can take only so many concessions."
The departure of Connex and the loss of 110 jobs would ripple through the storefront shops in downtown Marietta, where the tallest structure is the clock tower at the Washington County Courthouse.
The Connex relocation would be far from a death blow to Marietta's economy, which includes several petrochemical plants, a regional dairy and a laboratory equipment company. In fact, Connex is no longer counted among the area's top 10 employers.
The loss is seen here as more symbolic - a wake-up call to the harsh truth that Marietta is competing in a global economy beyond its control. It's a wake-up call the Roanoke Valley has heard in recent months, too.
When rumors about Connex's departure began to spread earlier this month, Marietta officials met with Gilbert Gardner, a native who had worked his way up through the ranks to become president of the company.
City officials say Gardner, while sympathetic, made it clear that decisions were being made half a world away in Darlington, England.
"I'm really sorry we didn't get to do the face-to-face pitch to the people calling the shots," said Michael "Moon" Mullen, the city's community development director.
"They don't even see the human element. If we had local ownership - even stateside ownership - we could make the case that there are other intangibles, the human element."
Mayor Matthews is frustrated that companies pit region against region - union workers in Ohio against nonunion workers in Virginia.
"That's the thing I don't like. They're playing both ends against the middle."
Conditions contributing to Connex's departure are similar to the circumstances that brought the company to Marietta after World War II.
Connex, then called Dravo, moved here in part to escape the high wages of industrial Pittsburgh.
The company set up shop in two idle factory buildings that each stretched the length of a football field.
Connex was positioned for the postwar economic bonanza in which local power companies would scramble to bring more and more plants on line.
Dravo expanded to meet demand for its fabricated pipe. It became a market leader for high quality fabrication that could meet the exacting standards of nuclear power plants. Orders stretched 10 years into the future and experts were calling for an ever-increasing demand for electricity.
The company enjoyed higher sales; and welders, represented by the union, became among the highest-paid workers in the area.
"Not too many years ago I would have bought stock in the company," said Devol, a high school language teacher who worked part time in the company's engineering office. "It was the greatest thing I have ever seen."
Things began to slide in the 1970s. Electric companies began canceling orders for new power plants because of energy conservation and the demise of some of their largest customers, manufacturing plants. The Three Mile Island nuclear accident led to a freeze on new orders for nuclear power plants.
In 1988, the company was sold in a leveraged buyout to company executives, who in turn sold it to Whessoe, the British company, for $8.8 million.
Whessoe asked for wage concessions - a cut from $17.47 an hour to $12.71 an hour - in contract talks with Local 168.
Local 168 members rejected the offer this month, saying they could not make more concessions after having agreed to a $3.85-an-hour cut in 1984.
Connex then announced it was considering closing plants in Marietta and Pineville, N.C., south of Charlotte, and moving - possibly to Roanoke.
Randy Ward, business manager for Local 168, said he believes Connex had made up its mind to move and only went through the negotiating process to make the union a scapegoat.
Local 168 members say they feel no loyalty to Connex.
"I don't know if anyone has weepy tears over this," said Larry Albrecht, a Connex welder for 27 years.
"I'm not bitter about anything. The British bought it, they paid for it, they have the right to move it if they want to."
Jim Brown, who has worked in the Connex shop for 19 years, said he was more interested in maintaining his middle-class standard of living than in saving Connex.
In fact, Brown said he probably could make more money elsewhere, though he would have to travel up to an hour for welding jobs and might go through periods of having no work.
If Local 168 had agreed to the concessions, it would run the risk of driving down the prevailing wages of all welders in the area, Brown said.
"It was a choice of saving this little one thing [Connex] or saving everything," he said. "We'll just let Connex go."
Staff writer George Kegley contributed to this story.