A difficult time’
More than 150 file cabinets fill the back room of the Habitat for Humanity’s ReStore in Charleston. The bland-colored containers are a little worn, and some of them bear labels such as, “polyester grade ethylene glycol” and “liquid-liquid-separation.”
A few of the cabinets — on sale for $20 to $40 apiece — bear a name familiar to the Kanawha Valley: Union Carbide.
About two-thirds of the office supplies in the room — including desks, chairs, shelves and binders — came from the chemical company, gone since its merger with Dow in 2001, store workers said. Dow actually helped fund the Charleston store with a $500,000 grant.
“After the merger, we had way more stuff than we needed,” said Allan Fowler, Dow vice president of West Virginia operations. Between 300 and 400 of the chemical company’s file cabinets were donated, Dow officials said.
Of the 2,409 Union Carbide workers in the Kanawha Valley in 2001, about half are gone. Today, there are slightly more than 1,200 employees in Dow’s facilities in the South Charleston area, and more cuts are on the way, Fowler said. About two-dozen workers were laid off earlier this year.
“It’s definitely a difficult time,” said Fowler, who became Dow’s West Virginia president in June 2003. “The rest of the country, as well as the state, have a changing landscape for the chemical industry.”
Dow and the chemical industry aren’t the only things changing. In 1980, there were more than 36,000 manufacturing jobs in Cabell, Jackson, Kanawha, Mason, Putnam and Wayne counties, according to the state Bureau of Employment Programs.
In 2003, there were 16,029. In 1980, there were 16,160 manufacturing jobs in Kanawha County alone, down to 5,573 today.
“What’s happening certainly isn’t anything good,” said Jon McKinney, manager of the Flexsys chemical plant in Nitro that is in the process of closing. “Is it a crisis? Well, it’s close.”
Chemical jobs lost
The Flexsys plant dates back almost 90 years when a munitions facility opened along the Kanawha River in 1917. After it closed in World War I, the facility was sectioned off and what is now Flexsys was born.
Still, workers were surprised a decade ago when they unearthed an active grenade in one of the plant’s control rooms (The grenade was turned over to and detonated by the State Police).
Last week, a few supervisors stood in the control room that only months before was busy with activity. Now the supervisors’ main tasks are to keep things up and show equipment to prospective buyers. Equipment that can’t be sold will be scrapped.
During the plant’s peak in the 1970s, about 900 people worked at the rubber-processing facility, which didn’t bear the name Flexsys until the mid-1990s. Last year, only about 200 people worked at the plant.
About that time, company officials announced the plant would close. About 80 workers are dismantling the plant, but more and more of them will lose their jobs until the 62-acre facility is a ground-level field by June 2005.
Some employees had worked at the plant for a quarter-century. Now, McKinney and other plant leaders must conduct monthly exit interviews with outgoing employees, the most recent round coming on May 28.
“One of the guys joked that he’d studied all night long for the interview,” McKinney said. “People are handling it exceptionally well, looking into the future.”
To the south of Flexsys along the river is the old Great Lakes Chemical Corp. facility, which closed in 2002, leaving dozens of people without jobs.
Numbers aren’t available for the chemical jobs lost in the six-county area in the past two decades. But since 2001, the total in Cabell, Jackson, Kanawha, Mason and Putnam counties shrank 34 percent from 5,600 to 4,190 in 2003, largely because of lost Carbide jobs.
McKinney, who will have to look for another job next year when the closure is complete, sometimes speaks about the chemical industry at luncheons. Citing numbers from the U.S. Department of Commerce, he shows that the state had more than 26,000 chemical industry workers in 1970. It had less than 16,000 in 2001.
This year, with losses at Flexsys, DuPont and others, the state has shed 500 chemical jobs, McKinney said.
McKinney’s numbers show that the number of chemical employees in the state is only a few thousand higher than the number of workers Union Carbide employed at its peak.
Dow’s Fowler said he didn’t have an exact figure, but he believed that at one point there were between 10,000 and 12,000 Carbiders in West Virginia.
“Speaking strictly from a petrol-chemical standpoint, I would say the situation in West Virginia is a little more dire,” Fowler said. “But it’s a significant problem for the entire country.”
Natural gas, which unlike oil is traded regionally, is more expensive in the United States than in expanding markets around the world. The cost in the United States is 150 percent higher than in China or Europe, and 600 percent higher than in the Middle East, Fowler said.
That was particularly tough for Flexsys, which saw prices for its rubber-processing chemicals decline 40 percent since the late 1990s. The plant’s co-owner, Solutia, was accused of a price-fixing scheme last year that an economist said could have helped saturate the market.
Job cuts at Dow are not done. The company has set out to slash 3,000 jobs by the end of 2004, which would whittle the company’s employees to about 43,000 globally. The past two years were two of the leanest in Fowler’s three decades with Dow, he said.
Fowler and McKinney tempered their statements by pointing to the work of groups such as the Chemical Alliance Zone and the recently formed Mid-Atlantic Technology, Research and Innovation Center. Fowler also mentioned the development of the South Charleston Technology Park.
Fowler is not the direct supervisor of all Dow employees in West Virginia, but he is for some, and when they lose their jobs, he’s in charge of breaking the news.
“We tell them that restructuring is going on, which they already know. It’s very difficult for the industry,” he said. “But I don’t want to ever be able to say I’m good at telling people they’ve lost their jobs.”
Manufacturing and service
In 1987, Brian Wedge began working for what is now M&G Polymers in Apple Grove. By the mid-1990s, the plant’s employment swelled to about 700 people, about half of Mason County’s manufacturing work force at the time.
By this summer, only about 100 people will work at M&G making plastics for such things as microwave dinner trays and 2-liter pop bottles. Union employees have worked at M&G without a new labor contract for more than six months.
“It’s tough to see that happen to your friends,” Wedge said. “I don’t like to see when people with 30 years’ experience lose their jobs.”
By the end of 2003, there were only 606 people working in manufacturing jobs in Mason County, a 57 percent decline from 1995 and a 53 percent drop from 1980, according to the Bureau of Employment Programs. In 2000, 180 Mason County workers lost their jobs when American Alloys declared bankruptcy, and this year, the Akzo Nobel chemical plant trimmed about 25 percent of its 170-employee operation.
Wedge, born and raised in Mason County, has two young children.
“You don’t know, you wonder what the future will be for them,” Wedge said.
As manufacturing jobs dwindled, service-sector jobs — which traditionally don’t pay as well or offer comparable benefits to manufacturing — grew across the country.
The federal government began charting employment differently after 2001, making comparing 2002 and 2003 data with previous years difficult. However, between 1980 and 2001, the service sector in Cabell, Jackson, Mason, Kanawha, Putnam and Wayne counties grew 37 percent.
Mason County saw 16 percent growth. The way manufacturing jobs are charted didn’t change much between 1980 and 2003, making comparisons of those numbers easier.
In 2001, manufacturing constituted 11 percent of West Virginia’s work force under the old Standard Industrial Code and the new North American Industry Classification System.
Nationwide, the service industry also grew as the number of people working in manufacturing declined.
In 1980, 19.3 million Americans worked in manufacturing, compared with 14.3 million in 2003, according to the U.S. Bureau of Labor Statistics. That’s a 35 percent decline. Conversely, 49.7 million Americans worked in private sector service jobs in 1980. That rose 74 percent in the next 23 years to 86.8 million.
But Mike Hicks, an economics professor at Marshall University, said manufacturing jobs, and job losses, could have hurt West Virginia more than other states.
“The reason people like manufacturing is that it takes relatively low education levels and trains the people at a task where they can get a good living wage,” Hicks said. “And you, as an individual worker, will contribute a lot to the manufacturing process.”
The opposite is true in the service sector, and West Virginia’s lower than average educational levels might make the switch to service jobs worse for the state.
About 75 percent of state residents ages 25 or older graduated from high school, compared with 80.4 percent nationally, according to the 2000 U.S. Census. Nearly one-fourth of the nation’s residents 25 or older had a bachelor’s degree, compared with less than 15 percent of West Virginians.
“There is typically less on-the-job training in the service sector than in manufacturing,” said Tom Witt, director of West Virginia University’s Bureau of Economic Research. “And many of [the manufacturing] jobs were unionized and the people were probably able to negotiate a good compensation package and fringe benefits.”
The flip side is higher productivity
West Virginia factory workers, though, are known as being as productive, or more so, than national averages. Hicks said that’s because the workers who get the state’s factory jobs are usually the cream of the crop.
The best example of that might be in Putnam County.
In 1996, Toyota manufacturing announced it would open a plant in Buffalo that would employ 300 people. The facility was set to open in 1998, and as it was being built, the company said it would increase the projected number of employees to 600.
By this year, that number was 1,000, and the plant announced in April that another 50 jobs would be added after an 184,000-square-foot, $80 million addition is complete in 2006.
Last year, Troy, Mich.-based Harbour and Associates recognized West Virginia’s transmission and engine facility as the top-ranked four- and six-cylinder engine plant in the nation. Established in 1989, the Harbour Report measures assembly, stamping and powertrain productivity performances for all North American automotive manufacturers. The plant is also the most productive of Toyota’s North American facilities.
Sen. Jay Rockefeller, D-W.Va., is widely credited as the person most responsible for bringing Toyota to West Virginia. Rockefeller and former Gov. Gaston Caperton set up a state office in Nagoya, Japan, in the late 1980s, and Rockefeller spent years developing relationships with Japanese business leaders.
“A different and heretofore unknown in West Virginia has dedicated to doing business here,” Rockefeller said. “That carries a lot of weight and ... encourages people to take West Virginia seriously.”
Rockefeller, citing data compiled by workers at the state Development Office, said the average U.S. auto industry worker’s wage didn’t increase between 2001 and 2003, compared with an 8 percent increase for West Virginia auto workers.
Toyota wasn’t the first auto company to come to the state. What is now Mayflower Vehicle Systems in South Charleston employs more than 700 people at a car-stamping facility that opened in 1989.
Five other auto-parts facilities opened or will open in West Virginia since 1994. The first was NGK Spark Plug Co., of Japan, off Interstate 77 in Pocatalico. The facility employs 200.
Then came KS of West Virginia in Ravenswood (110 employees), Toyota, Diamond Electric in Eleanor (soon to have 125 employees), Nippon Thermostat (soon to have 60 employees) and Sogefi S.p.A. in Prichard (soon to have 148 employees).
New facitilies open even as old ones close
“We don’t have the topography to attract full assembly plants,” said Gerald McDonald, president of the Huntington Area Development Council, which works in Cabell and Wayne counties. “So we focused on the auto-parts sector.”
McDonald said that within a few weeks, another foreign company would announce plans to open in HADCO’s area. He declined to elaborate, but said that four out of five companies scouting the area are from outside the United States.
Two weeks after McDonald began working for HADCO in 1993, the city’s largest manufacturer, Owens-Illinois glass, shut down. The plant, which made glass containers for the pharmaceutical and liquor industries, had been in Huntington for 80 years. It had about 650 employees.
“I remember saying, ‘what am I doing here?’” McDonald said. But the facility that housed the glass manufacturer now has multiple tenants, and McDonald said more people work there today than in 1993.
Still, Cabell County lost more than 6,600, or 57 percent of its manufacturing jobs between 1980 and 2003, according to the Bureau of Employment Programs. Wayne County lost 743 manufacturing jobs or 51 percent.
M&G’s Wedge, among others in organized labor circles, often point to outsourcing as the reason for lost jobs.
“Some of it’s the outsourcing, but I think most of it is productivity improvements around the world,” Hicks said. “We’re not the only ones losing jobs. Manufacturing as a proportion of employment around the world is dropping.”
The role of coal mining
over time in the region
Historically, Cabell, Jackson, Kanawha, Mason, Putnam and Wayne counties have relied less on mining than other parts of the state. Those counties had 7,660 mining employees in 1980, about a fifth as large as the manufacturing sector’s 36,240. Then and now, most of those jobs were in Kanawha and Wayne counties.
By 2003, that number shrank to 2,809, a 63 percent decline. Kanawha County has 2,191 mining employees, down from nearly 7,000 in 1980. Wayne County, though, saw a 94 percent increase in mining jobs from 250 to 484.
State government, West Virginia’s largest single employer, has also grown. As of November, the state had 35,906 employees, up nearly 16 percent from 1997.
Aluminum industry gets by with fewer workers
Twenty-five years ago, 24-year-old Dave Patrick started working as a security guard at Kaiser Aluminum in Ravenswood. At the time, the facility was one of the world’s largest aluminum plants.
Patrick, who had worked for the Charleston Fire Department, was married with one child and another on the way. To make a better salary, he signed on to be a guard at the 62-acre site.
“I forget how many hours we were under the roof, but I had to spend that first night learning so much. The place, it’s like a small city,” said Patrick, who is now the president of United Steelworkers Local 5568, which represents the plant’s workers. “I felt good that I had landed a good-paying job with good benefits. I about doubled my pay.”
He said the quality of his benefits and wages today isn’t as good as it was in 1978. Meanwhile, the plant’s work force shrank from about 4,000 to less than 2,000, he said.
Two companies now operate in the plant: Century Aluminum, which employs 800, about 500 of whom are hourly workers, and Pechiney Rolled Products, which employs 1,000, 700 of whom are hourly. Pechiney is merging with Alcan, one of the world’s two largest aluminum companies.
Late last year, the U.S. Department of Justice ordered Alcan to sell the plant before the merger, saying the acquisition of Pechiney’s brazing sheet operations would violate antitrust laws. Alcan already makes brazing sheet, a high-quality metal used in heating and cooling units for cars and airplanes.
The Justice Department loosened their requirements when Alcan agreed last month to move mills in Fairmont and Oswego, N.Y., into an independent company.
“It’s hard to tell what will happen now,” Patrick said. “It seems like it will be a good thing because [Alcan is] a major aluminum company. What I don’t know is what their plans are.”
Dan Gagnier, Alcan’s senior vice president of corporate and external affairs, called the Ravenswood workers “good people,” and added that there are no “issues with productivity” at the plant.
Kaiser Aluminum opened the facility in 1957, and it’s been said that older U.S. manufacturing facilities can’t compete with newer plants overseas.
Frank Flowers of FMC, a chemical plant that shut down in South Charleston in 2002, told a lunch crowd at a May South Charleston Area Advisory Panel meeting that updating old West Virginia plants are like souped-up Model-Ts competing against 2004 Lexuses.
When asked about that analogy, Gagnier compared the older facilities to a tuned-up Trans-Am from the 1970s.
“It can still give your Lexus a damn good race,” he said, “depending on who’s driving.”
To contact staff writer Paul Wilson, use e-mail or call 348-5179.