Turning a corner?
WEIRTON — Last winter, Tom Yourd hung around his house, searched classifieds, logged on to Monster.com and grabbed any job listing he could find.
It was the first time in his adult life he was out of work.
“Things are really rough out there for the job market for 56-year-old engineers,” he said.
In November, Yourd’s employer of 31 years — Weirton Steel — laid him off. When Yourd began work at the decades-old steel operation in the early 1970s, the company had about 12,000 workers. Only about 2,000 punched the clock by late 2003.
There was a time not too long ago when Yourd thought Weirton Steel would be his only employer, as it was for many of his relatives and generations of families in Northern Panhandle mills. In the months before he lost his job, Yourd realized his future, and the company’s, was uncertain.
There were more than 25,000 manufacturing jobs in Brooke, Hancock, Marshall and Ohio counties in 1980. In 2003, there were a little more than 11,000, according to the state Bureau of Employment Programs.
More than 8,000 of the losses came in Hancock County, where Weirton’s operation still spans both sides of Main Street in Weirton for about six city blocks.
The state numbers tell only part of the story. Wheeling-Pittsburgh Steel Corp. — which has cut its work force of more than 8,000 to about 3,000 — also has operations in Ohio and Pennsylvania that aren’t recorded in West Virginia’s figures. In the narrow Northern Panhandle, people often cross state lines to get to work.
“Everybody’s realized that you can’t rely on one business anymore,” Yourd said last week. “This whole valley relied on Weirton and Wheeling-Pitt.”
Since he was 19, Chris Backel has worked in the Weirton mills. It was the family path blazed by his great-grandfather in the 1930s and continued by his grandfather, who retired in the 1970s, and his father, who retired in the 1990s.
Backel, now a division manager at the plant, rarely regrets his decision to work in the mill.
“But last May 19,” he said, “there were probably some regrets.”
On May 19, 2003, Weirton Steel Corp., the nation’s sixth largest integrated steelmaker, filed for Chapter 11 bankruptcy protection. The company racked up more than $700 million in debt thanks to the import crisis that started in the late 1990s. The future for Weirton’s 3,600 workers — down from more than 14,000 in the late 1970s — looked bleak.
Not that the past quarter century was easy. In that time, the Northern Panhandle saw:
s A 21 percent decline in population and number of jobs;
s Wages that fell below, or further below, national averages (see chart);
s More than 14,000 lost manufacturing jobs.
“We’ve gone for a long period of probably 20 years with losing jobs and lost population,” said Don Rigby, director of the Regional Economic Development Partnership, which represents Marshall, Ohio and Wetzel counties. “I described it for a long time as running up a down escalator.”
However, among panhandle officials and workers, there’s a sense that the worst is over — that while the job losses of the past were difficult, they’re basically done.
Almost a year to the day after Weirton filed for bankruptcy, International Steel Group Inc. bought the company for $253 million. ISG is the largest domestic steel company, and like it did at other bankrupt companies it bought during its meteoric two-year rise, it cut about 1,000 jobs at Weirton, including half of the mill’s 400 management employees.
When it was bankrupt, Weirton cut health care benefits and life insurance for retirees. Through a variety of mechanisms, including a Voluntary Employee Benefit Association and the Pension Benefit Guarantee Corp., those benefits have been restored to varying levels.
And current workers take on more and varied responsibilities. Longer shifts have become part of life at Weirton, where pay is now based on performance.
“We used to have three chiefs for every five Indians,” Backel said. “We don’t need that anymore. The guys are wearing more hats.”
On July 19, company officials announced that newly named ISG Weirton would restart a second blast furnace later this month and recall about 50 workers, upping the plant’s workforce to 1,900. The news came sooner than expected, and the company plans to eventually employ 2,100 at the Weirton mill.
“It’s kind of like the Sears store in the mall,” said Bill McKenzie, who grew up in the Northern Panhandle and recently became the plant’s general manager. “You need to have some sort of anchor for an area.”
Wheeling-Pitt, meanwhile, emerged from bankruptcy last year thanks to a $250 million federally guaranteed loan from the Royal Bank of Canada. Last summer, union workers overwhelmingly approved the company’s five-year contract offer.
At the time, Steelworkers President Leo Gerard called the first opportunity in 20 years to put the company “on solid, long-term financial footing.” The workforce’s operations were cut by way of buyout offers to 650 workers and cuts to 250 management positions.
More than $110 million of the $250 million loan will go toward building the largest electric arc furnace in the world in Mingo Junction, Ohio. An electric arc furnace is a stainless steel furnace where scrap steel is used as charge material to produce raw steel.
“We’re extremely fortunate,” Rigby said. “We still have two steel mills. If you look at the nation, and what’s happened at other places, that’s really mind-boggling.”
Gambling on tourism
Yourd’s home phone rang in late January. On the other end was Weirton’s human resources director, the man whose name was on the layoff notice Yourd read at his desk at Weirton late last year.
The director asked: Did Yourd want to interview for a job at Mountaineer Racetrack & Gaming Resort?
“I said I would absolutely be interested. I was elated to get the call,” said Yourd, who’s now worked at Mountaineer for four months. “I’d driven past the place so many times and I never would have thought Mountaineer needed an engineer.”
Mountaineer, a sprawling complex built around a racetrack, is only about a 30-minute drive from Weirton on W.Va. 2 along the Ohio River. With about 1,700 employees at Mountaineer and 3,600 backside workers such as jockeys and trainers — up from 342 and 1,200 backside workers just 10 years ago — the park has partially filled the void of lost steel jobs in the area. Some employees are seasonal, but others work full time and receive health benefits.
Tamara Pettit, a spokeswoman for Mountaineer, said she wasn’t sure how many former Mountaineer employees worked at Weirton. But it’s a significant number, she said
“I know there are a lot of them because I’ve worked with them,” she said, noting that she spent eight years working in the steel mill’s management before coming to Mountaineer in 2000. “I get a tremendous amount of calls from the union saying ‘can you help this guy? Can you help that guy?’ The calls are expressing concern over their union members losing employment.”
In 1997, Sherry Straka was told she could either be laid off from the steel mill after 29 years or take early retirement. Today, she works in Mountaineer’s human resources department.
“I think the people at Weirton were very lucky to have Mountaineer here,” she said. “Otherwise, a lot of them would have had to leave the area.”
Besides Mountaineer, the Wheeling Island Gaming & Resort Center employs about 1,000 people, according to the Regional Economic Development Partnership. And another new large employer opening in the region has its eyes on tourism dollars.
A Cabela’s outdoor retail store in Dallas Pike, just outside Wheeling, is set to open on Aug. 12. The 188,000-square-foot store’s structure is complete, and workers inside are busy hanging taxidermy and stocking shelves. The other stores are among the top tourist destinations in their states. Officials involved with the West Virginia project expect 5 million people to visit the store in its first year.
Inside the store is a large indoor mountain, a stream that eventually will have live fish and dioramas, which in Dallas Pike depicts the African plain. The West Virginia store will also have something similar to the 57,000-gallon aquarium at the store in Hamburg, Pa.
West Virginia officials, largely through tax-increment financing and state grants, gave the Nebraska-based company an incentive-laden deal to open outside Wheeling. The price tag could eventually hit $127.5 million, according to the state Development Office.
Dave Satterfield, director of that office, said earlier this year that the project would bring about 2,700 jobs to the area. Cabela’s would bring 390 retail jobs and 800 at a nearby distribution center, according to the Development Office.
The distribution center, across the Ft. Henry Park from the retail store, opened Monday. A 500,000-square-foot addition is planned for next spring, which will nearly double the distribution center’s size.
“Everybody’s excited,” said Ohio County Commissioner David Sims. “Everybody can see the store, and the distribution center’s so huge. It seems like everywhere I go, somebody says, ‘Hey, my brother-in-law or my cousin got a job up there.’”
‘Good jobs in a good area’
Decades-old pictures cover the walls in the old four-story red building that once housed the Wheeling Stamping Co. on Main Street.
One reads, “Stampers on the Job: 156 years of service.” Below are photos showing “Stella Baker, 44 yrs.” and “Charles Calissie, 40 yrs.,” among others.
Those pictures fill a building that today, after millions in renovations, looks like something out of a downtown Seattle Web company, with exposed pipes, open-air, catwalk-style hallways and lots of glass.
In 2002, helped by between $8 million and $10 million in city and state funds, Orrick Herrington & Sutcliffe opened its global operations center in the converted warehouse.
About 110 workers provide back-end service support to the law firm, which is based in San Francisco. Will Turani, director of the center and a Northern Panhandle native, said Orrick hopes to eventually employ 250 in Wheeling.
“This is not your typical mill or retail operation,” said Turani, as he walked through the building where long ago Crest’s first collapsible toothpaste tube was made. “These are good jobs in a good area that definitely needs it.”
Orrick wanted 73 employees when it opened the Wheeling office two years ago. Six thousand people applied, Turani said.
The jobs at Orrick are service jobs, a type often maligned because they usually don’t provide the high wages or benefits like traditional manufacturing jobs. But Turani, and other economic development officials in the area, point to Orrick as an example of how West Virginia can succeed as fewer and fewer jobs remain at traditional Rust Belt employers. The jobs at Orrick, Turani said, are professional service jobs.
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, private sector service jobs increased 74 percent in that time to 86.8 million.
Service jobs in the Northern Panhandle grew by about 20 percent from 1980 to 2001, according to state figures. The biggest increase came in Brooke County, where service jobs increased 55 percent to more than 7,000 workers in a county with only about 25,000 residents.
Service jobs often don’t provide high wages or benefits of traditional manufacturing jobs. But not all service jobs are at Burger King and Wal-Mart. The key to bringing higher-paying service jobs to an area is providing an educated work force, said Mike Hicks, an economics professor at Marshall University.
But in 2000, no Northern Panhandle county could boast a college graduation rate for residents who were 25 years or older that matched the national average of 24.4 percent. Only Ohio County was close, with 23.1 percent graduating from college. None of the other counties cracked 13.5 percent.
“You’re only looking at those who work here,” Rigby said. “In the entire Panhandle, we have always had great graduation rates. Our problem [is] having a job for those people when they graduate.”
Not surprisingly, the average per-capita income in Ohio County in 2002 was by far the highest in the Northern Panhandle. It was far ahead of the state average and was only about $1,700 lower than the national average. Average pay in Ohio County grew 208 percent, a slightly higher rate than the national average and much higher than Brooke, Hancock and Marshall counties.
Prospects following in Orrick’s footsteps have contacted Rigby, though none have set up shop. But Rigby and Turani said Orrick’s success will be something the area, and maybe the state, can build on.
“It’s a linchpin for marketing,” Turani said. “If it can happen in Wheeling, why can’t it happen in Charleston? Why can’t it happen in Huntington?”
To contact staff writer Paul Wilson, use e-mail or call 348-5179.