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Record number of manufacturing plants close in 2002

By December 2002 Mississippi had seen a record 101 manufacturing plants close, taking 10,198 jobs with them.

It exceeded the previous year’s record of 73 plants with 9,100 jobs and far outweighed the average for the first 20 years that MMA collected such data-about 42 plants and 4,800 jobs per year.

Plants have closed all over the state —from Ackerman to Aberdeen, from Southaven to Shubuta. It’s been a difficult year for most everyone, says Jay Moon, president of the Mississippi Manufacturers Association. But tough as times may be, the plant closures aren’t something the MMA is trying to hide.

“We’re going around and telling people about it because I think it’s important for people to know that we have a trend that’s going on here that we really need to be paying attention to,” Moon said. “I think we have some great manufacturers in the state. Many are strong and growing but some are challenged now and we have to see what we can do collectively to try to help support them however we can.”

Moon blames the loss of so many manufacturers in the state on a variety of reasons — increased foreign competition, increased health care costs, not to mention the poor international and domestic economy.

“The costs just keep escalating, increasing the burden on employers in terms of how profitable they can remain while remaining globally competitive,” Moon said.

The increased costs have led many manufacturers to consolidate, merge and file for bankruptcy protection, which has in turn led to the closing of many manufacturing plants across Mississippi and across the U.S. Other companies have moved to countries where it’s less expensive to operate, such as Mexico and China. And in Mississippi especially, Moon said, that’s scary.

“In this state manufacturing represents a strong part of the economy and has a great impact on the economy,” Moon said. “As manufacturing goes, in many ways so this economy goes.”

And numbers don’t lie. In 2000 234,000 people were actively and directly engaged in the manufacturing industry. This year that number has dropped to 207,000.

“We’ve got to do what we can to stabilize those critical manufacturing plants in the state and find out what we can do to support them and keep them viable and competitive,” Moon said.

In Oxford, where Emerson Appliance Motors closed in November 2002 leaving 529 people without a job, Max Hipp, executive director of the Oxford-Lafayette County Economic Development Foundation, said families are still reeling. Emerson moved its manufacturing of appliance motors primarily to Mexico where operating costs are cheaper.

“Families grew up in that plant for 30 years,” Hipp said.

But, Hipp said, Oxford is lucky. In addition to a recent announcement from Whirlpool that it would be expanding to create 150 to 200 jobs and possibly more, the city is also fortunate to have many regional facilities, including governmental, health and educational ones.

“Fortunately we have a lot of other avenues for people to make money,” Hipp said. In fact, manufacturing only makes up about 9% of actual jobs out of the 22,000 people employed in Oxford.

Other cities and towns throughout Mississippi aren’t as lucky however. In Georgia-Pacific’s Gloster plywood manufacturing facility where production has merely been suspended until market conditions warrant

the facility reopening, people fear what the future could hold.

Gloster mayor and owner of The Grocery Store Bill Adams said he has not noticed the negative effects of GP’sw suspension of business as of yet, but expects he will sooner or later.

“Is it going to affect us?” Adams asked. “Darn right it will. Amazingly though business is good.”

Spencer Robinson, president of the Gloster Chamber of Commerce, like Adams, said after having been down for only a month not many families have been affected by GP’s suspension of operation yet. But, he added, “If it stays down it’s really going to hurt the town.”

Robinson’s greatest concern is for the people of Gloster. Other than logging, there are no big industries in Gloster. The closest cities to Gloster are Natchez, which is 45 miles from Gloster, and McComb, which is about 35 to 40 miles away.

“If Georgia-Pacific doesn’t open back up it’s going to hurt this town, there’s no doubt about that,” Robinson said. “There’s just nothing else here for people to make a living. There are schools but they’re not large. Logging I’d have to say is the biggest business around here. I just hope Georgia-Pacific opens back up. It just kills me that that’s the livelihood of most of these people and most of them live payday to payday.”

Moon said the MMA is making a point to support the state’s manufacturers, and in so doing hopefully keep them from closing.

“We have to make sure we look at every opportunity that we have in front of us to support the manufacturers we have in the state,” Moon said. “Certainly we don’t want to do anything to increase the difficulties they have by adding increased taxes and other costs because that will make it that much more difficult for them to be competitive.

“First do no harm,” Moon said. “That’s the oath doctors take and that should be our first goal.”

Contact MBJ staff writer Elizabeth Kirkland at ekirkland@msbusiness.com or (601) 364-1042.

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