The Golden Triangle has been the poster child for manufacturing success in Mississippi in recent years with the establishment of the $880-million SeverStal steel mill (originally called Severcorr) and $400-million PACCAR engine plant in Columbus, and projects such as Eurocopter and Aurora Flight Services in Starkville.
While manufacturing in the Golden Triangle area has not been immune to the effects of the recession, most manufacturers are weathering the storm, and economic development officials are taking the opportunity to upgrade their infrastructure to prepare for better times ahead.
“Most of the manufacturers are holding their own, although many are in a mode of doing small layoffs or reducing hours,” said Columbus-Lowndes Development Link (CLEDA) CEO Joe Max Higgins Jr. “We have some that are letting people take vacation days or days off without pay. One is paying their workers to go to United Way or another community charity and volunteering time. That is a very sweet deal.”
With the decline in construction, demand for steel is down. At SeverStal, the slowdown has meant workers are logging fewer hours. Higgins said during slow times, SeverStal workers might average 40 hours a week.
“Normally they worked more than 40 hours per week,” Higgins said.
Although CLEDA has seen a decrease in prospect activity for new projects, there are three $100-million projects currently being considered.
“We have several projects we are working, all of them coming in at this bad time,” Higgins said. “Some of them we expect to make decisions on in 30, 60 or 90 days even with the bad economic news. Several projects are related to the steel mill. A couple of others are related to PACCAR.”
Right now he feels fairly confident about $100 million of those projects will happen fairly soon, and probably another $100 million are likely by the end of year. Another $100 million worth of development might never happen.
Current industry expansion projects are underway, beefing up local employment and retail sales. SeverStal is doing a $500-million expansion, and Stark Aerospace’s $30-million unmanned aerial vehicle plant is approximately 65 percent complete.
Right across the street from that, CLEDA is just finishing up a 100,000-square-foot spec building. Higgins said before the economy tanked, CLEDA planned to build six of the shell buildings that can help an industry get a quick start on an expansion.
“We are still going to build those, but not as quickly as we once thought,” Higgins said. “We are already having active conversations with several companies that have expressed interest in the first one, which is our first spec building in 10 years. The plan is as soon as one is leased or sold, we roll the money into the next one.”
The largest layoff locally has been at Holcim, a cement manufacturing company that has been in Columbus for 25 years. There has been a worldwide glut of cement because of less new construction. Holcim laid off 113 people and plans to mothball the plant for three years.
Columbus, like the rest of the country, is seeing higher unemployment rates these days. But, Higgins said that can be somewhat misleading because the area has not only grown its civilian labor force by as much as 1,000 per year, but has also attracted new residents looking for jobs. If 1,000 people move to the area, and 750 get jobs, that is still a net gain of 750 new paychecks going into the local economy.
“I, for one, think it is okay unemployment is going up as long as the number employed is also going up,” Higgins said.
CLEDA is working hard to help existing industry through these challenging times. Charleigh D. Ford Jr., who worked in economic development for 38 years — including 20 years as head of CLEDA— before retiring, has been brought back to work with existing industries. Each week he visits three to four existing industries to go over their concerns, and how CLEDA can be of help.
“Charleigh knows every one of the existing industries,” Higgins said. “He is an icon. He has the temperament and personality to work well with industry.”
CLEDA is also taking the slowdown as an opportunity to make significant upgrades to existing infrastructure. New water lines are being laid, and a project is planned to double the sewer plant capacity.
“When the economy does turn around, we will have more developable product ready to go again,” Higgins said. “Our county supervisors are supporting us in these slow times and providing the funds needed to do that.”
Contact MBJ contributing writer Becky Gillette at firstname.lastname@example.org.