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 Photo by Bill Wagner Mark Leinonen prepares paper rolls for shipping last month at Norpac in Longview. |
Manufacturing Optimism
Wednesday, May 4, 2005 11:59 PM PDT
By Pat Forgey
Printable version
E-mail this articleA national recession led by a decline in manufacturing jobs has waned, and that may mean an eventual turnaround in manufacturing-dependent Cowlitz County as well.
The local economy is more dependent upon manufacturing jobs than anywhere else in the state, according to the 2000 U.S. Census, with one in every five local jobs based on manufacturing. That's the highest in the state and twice the statewide average. The numbers are similar in Oregon's Columbia County.
Much of those local jobs are on the Longview waterfront, at Longview Fibre Co. and Weyerhaeuser Co., each with more than 1,000 employees. That makes them the largest industries in town, but they provide fewer jobs than they once did.
Now, some economic development officials are saying that the manufacturing recession is finally lifting locally and statewide.
Over the last year, Washington has added more than 6,000 durable goods manufacturing jobs through March, including 1,100 in wood products. In Cowlitz County, which lost thousands of manufacturing jobs in recent years, manufacturing jobs have increased by 100, according to state figures.
The Port of Longview just finished a rail line into its industrial park, and port leaders remain confident it will bring new businesses and family-wage jobs to the community.
"We're seeing a flurry of activity we haven't seen in some time," said Ken O'Hollaren, the port's executive director, explaining that the quality of the inquiries the port is getting from perspective employers is more promising than in years.
Local governments have invested tens of millions of dollars in business and industrial parks, but they've seen little return so far. The port has been marketing its industrial land for some time, but the rail corridor wasn't finished until earlier this year. The city of Longview has been marketing its Mint Farm Industrial Park for years with mixed results, and a planned second phase is on the back burner.
Prospects may be turning around.
Ohio-based Flexible Foam Products is now converting an former Mint Farm steel pipe factory into a new polyurethane foam manufacturing plant could employ up to 100 workers with a year.
City Manager Bob Gregory thinks more jobs are on the way to the Mint Farm. Mirant Power is talking with potential buyers for its mothballed power plant there, which could lead to its completion, he said.
Gregory said companies are inquiring about other sites there as well, including a company big enough that phase two would have developed, he said.
A few years ago, when Lowe's Companies Inc. expressed interest in building a distribution center at the Mint Farm, the city welcomed it with open arms. That project fizzled, though, and now Gregory says that's not what the city wants anyway.
"We're ... going after industrial manufacturing jobs," he said. "It provides a higher wage job, and higher capital investment per acre, meaning it generates more revenue for the city."
Manufacturing expansion is the best way to boost the economy, said Scott Bailey, regional economist for the Washington Employment Security Department. He is co-author of a recent study on manufacturing in Washington State.
"The reason manufacturing jobs are important is that they support so many other jobs," he said. "Even though manufacturing employment will certainly decline as a percent of overall employment , they remain important."
According to the Association of Western Pulp and Paper Workers union, jobs in Longview pay an average wage of $20 to 22 an hour, though some specialized skills can pay in the high $20s, along with a valuable benefits package.
New investment - and fewer jobs
The challenge facing the Mint Farm, the Port of Longview, and industrial parks in Kalama, Kelso, Woodland and Clatskanie is clear. The Lower Columbia region staked its future on manufacturing just as manufacturing went into a steep decline, for several reasons.
For example, Weyerhaeuser officials say its plants along the Columbia River in Longview make more product -- pulp, paper and wood products -- than they did in the 1970s, but with fewer than half the 4,800 employees they had then.
"It's called productivity, and its also called offshore production," Bailey said.
Some jobs are going overseas, where cheap labor, lax pollution and safety regulations and weak labor laws are drawing new plants, said Bailey and others.
A bigger problem locally may be efficiency, however.
Employment at Longview Fibre has been declining for years even as production increased. Employment has shrunk from 3,900 in the mid-1990s to 3,200 at the end of 2004, though some of those reductions have come from company plants elsewhere.
At Fibre and elsewhere, tens of millions of dollars invested in new, automated equipment have enabled manufacturers to produce more with less.
"When you get the new equipment, usually people get laid off," said Bob Geissler, a former Fibre millwright who is now a union official.
Fibre CEO Rick Wollenberg said he's expecting the growing U.S. economy to grow in 2005, and that will a boost for Fibre, which makes boxes for consumer products. Still, there could be more job cuts coming as Fibre tries to lower its costs to remain competitive and return struggling divisions to profitability.
"We continue to reduce staffing where and when appropriate," Wollenberg said in the company's annual report, released earlier this year.
Local pulp mills have made significant improvements in the last few years. Weyerhaeuser spent $50 million rebuilding the main boiler at its Longview mill just to keep it running. The Georgia-Pacific mill at Wauna spent $200 million to make better Brawny paper towels.
Similar efforts in Oregon
The Port of St. Helens considered many possible economic development options, and then they, too, hitched their hopes to manufacturing. It may be paying off
Portland General Electric is building a power plant at the port's Clatskanie-area property at Port Westward. It will add 17 jobs to the 67 already there.
The Port of Kalama has landed several small manufacturers, and is confident enough in their strategy they've turned away tenants who they fear wouldn't be a good fit for their Kalama River Industrial Park, Cawley said.
The Kalama River Industrial Park is for light industry, and Cawley said the port is not seeking what it considers "smokestack" industries there. It might refer them elsewhere, however, including to the port's North Port Marine Industrial Park, Cawley said.
"The county is still in a good position in terms of industrial land and transportation linkages," said Bailey, the employment security economist who monitors Cowlitz County.
Official job projections in the states of Oregon, Washington, and in the nation as a whole show an increase in manufacturing jobs, though that growth will lag other sectors.
Cowlitz County, Bailey said, "has a good shot at capturing some new manufacturing jobs."
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