City officials thinking positive despite new business closings

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Published: March 25,2002

VICKSBURG — Positive thinking may be rare when layoffs abound, but that was just the reaction of Vicksburg Mayor Laurence Leyens when Exide Technologies, K-Mart and Vicksburg Chemical announced they would be closing.

“It’s kind of a strange response,” admitted Leyens. “When you have layoffs, how could a mayor be positive about it? But if you look at a basic economic model, we have an expanding economy and very, very low unemployment. That creates an issue in terms of supply and demand, but I do not expect to see any adverse scenarios.”

Leyens said he hated to see the businesses go, but said, “The fact that three announced in a short window of time is just a coincidence and it’s disappointing but we don’t really have control over the outcome of those.”

Leyens said he is optimistic about the future for several reasons.

“We have one of the lowest unemployment levels in the state. Right now we’re at 4.01%, which is virtually no unemployment if you look at an unemployment scale,” he said. “In the next 90 days we have 675 new jobs coming in with the Ceres (industrial park) complex. Our economy is expanding rapidly right now. In fact our sales tax revenue is above last year’s, whereas the rest of the state or a lot of the state is seeing a reduction in sales tax revenue.”

There is one problem in Vicksburg, though: housing, Leyens said.

“We had a job fair up in Greenville and had over 100 qualified applicants apply for jobs here in Vicksburg but we don’t have any houses to put them in,” he said. “We have more jobs than we have people living here who are able to serve.”

New jobs will offset loss of existing ones

Jimmy Heidel, executive director of the Vicksburg Chamber of Commerce, said not all of the businesses might be doomed to close — Vicksburg Chemical is in Chapter 11 reorganization and will not shutdown anytime soon, and Heidel and others are trying to change the minds of Exide company officials to keep that Vicksburg plant open.

Exide media contact Joel Weiden, with Gavin Anderson & Company, said nothing of ongoing talks between company and Vicksburg officials. In a news release dated March 7, however, Craig H. Muhlhauser, president and CEO of Exide, said the decision to close the company’s Jackson and Vicksburg facilities was not an easy one. Muhlhauser said the closures were part of the company’s “ongoing restructuring efforts and will result in reduced costs, improving quality and responsiveness in support of our customers.”

More than 200 employees in Jackson and Vicksburg will be affected by the scheduled shutdowns, which will be effective May 10.

“We feel deeply for employees affected by this action,” Muhlhauser said in the statement.

Even if all three businesses do close, Heidel said there are many jobs coming into the city that will more than likely offset jobs lost at Vicksburg Chemical, K-Mart and Exide.

“We have two new Nissan suppliers coming in,” Heidel said. “And there are eight or nine expansions with existing industry. That means over 1,000 new jobs in this community this year. Things are not as grim as everyone thinks they are when you lose something like that.”

In fact, things are going so well in Vicksburg these days that the the city issued $17.5 million in bonds for infrastructure work. The outlet mall is expanding, which will add approximately 200 new jobs. Nissan supplier Calsonic will create 400 new jobs when it opens, and Yorozu Automotive Mississippi Inc. will hire 125 upon the opening of its new Vicksburg plant. In addition, Anderson Tully, Rouse Rubber Industries Inc., Ergon Inc. and Hebeler Corporation are looking into expanding their Vicksburg operations.

“We’ve got some good prospects, too,” Heidel said. “There are additional Tier 1 and Tier 2 Nissan suppliers looking at us. And we have an unannounced industry that’s coming in. They’ve purchased the land but haven’t told us when they want to make the announcement.”

Dan Hobbs, operations manager of Hebeler Corporation in Vicksburg, which currently employs a little more than 100, believes that Vicksburg is still a vibrant business community despite the businesses that have announced they would be closing.

“There’s no question that all of us watch the financial and business markets closely to see if there’s going to be any negative effect on our particular businesses,” Hobbs said. “We perceive that there could be some softness at some point in time but we have not encountered it yet. We’re actually ramping up production a bit now.”

Hebeler manufactures large fabricated pressure vessels, piping systems and tanks primarily for the power generation industry. The company, headquartered in Tonawanda, N.Y., has been able to effectively respond to changing economic conditions through its inventory control and management processes.

Hilton Dyar, dean of the Hinds Community College Vicksburg-Warren County Branch, said Vicksburg has been fortunate.

“Things are not looking too terribly bad,” Dyar said. “Jimmy Heidel has been a great asset. Our chamber and economic development authority are very knowledgeable and active. In terms of that I think we have a bright future of keeping industry and bringing in new industry.”

Hinds’ branch has been used as a recruiting tool for bringing new companies into the Vicksburg area.

Although the closings of all three businesses will definitely have an affect on Vicksburg at least in the short term, Lenore Barkley, executive director of the Vicksburg Convention and Visitors Bureau, said they would probably not affect tourism.

“With those closing there are paychecks that won’t be in the local economy anymore,” Barkley admitted. “If our phone and mail inquiries are any indication, which generally they are, it looks like we’ll have a pretty good spring. I’ve been here long enough that I can feel if the phone is ringing or not. With a number of things going on I anticipate that our hotels will at least be close to full and restaurants and attractions busy. Most of our attractions were up just a touch in January and February.”

Rosalie Theobald, Vicksburg’s Main Street director, said she has not noticed business closings affecting tourism in downtown either. After Christmas she noticed business had slowed down, but a Mardi Gras parade in February drew between 5,000 and 6,000 people to the area.

“After that it just seems like we went right into Spring Pilgrimage,” Theobald said. “Buses started coming in. Riverfest is coming up in April. It seems like we have one thing after another going on. I can definitely say tourism is picking up.”

She added that most visitors to the area appear to be from such nearby cities as Dallas and Atlanta.

“Maybe 9/11 had some effect in that more people are driving now and taking more regional trips,” she guessed.

Regardless of whether or not tourism is up or down or K-Mart, Exide and Vicksburg Chemical stay or leave, Heidel said the city’s diverse economy will keep it up and running.

“I don’t think any community in the state can compare,” he said. “With tourism, the Corps of Engineers and the Waterways Experiment Station, a strong industrial and retail base, when you get hit in one area you just about can absorb it in another.”

Contact MBJ staff writer Elizabeth Kirkland at ekirkland@msbusiness.com.


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