Ark. continues to lose manufacturing jobs
BYLINE: By JON GAMBRELL, Associated Press Writer
DATELINE: LITTLE ROCK
It's the same story across the nation, but Arkansas may have a rougher time of it. Automation, cheaper foreign labor and market pressures have pushed manufacturing jobs out of Arkansas and other states.
And the wave of losses only got bigger in Arkansas during the last week, as two plywood mills and a television plant shed more than a thousand state workers. Now, as state officials try to retrain laid-off workers and attract new employers, the losses affect families and will eat into the state's strong tax base.
State economic analyst John Shelnutt believes the numbers will get worse as the nationwide slowdown hits Arkansas a little bit harder.
"It's a lot of stories rolled into one," said Shelnutt, administrator of economic analysis and tax research for the state Department of Finance and Administration. "The layoffs we've seen in the news in the last three or four months up to today have not been tallied yet."
Across Arkansas, state estimates show the manufacturing industry employed 195,500 people out of a total non-farm work force of 1.2 million in October. That's down 4,600 manufacturing jobs from October a year ago.
Some of those losses came as food processors eliminated jobs, Shelnutt said. A decision by Whirlpool Corp. to cut 1,640 positions at its plant at Fort Smith also is starting to show up in the statistics, he said. As in other states, most of Arkansas' manufacturing job losses came as foreign countries offered cheaper labor, he said.
"It's the painful transition from lower paying manufacturing jobs to the world economy," said Mitch Chandler, a spokesman for the Arkansas Department of Economic Development. "We compete with India, Mexico and China, not just Mississippi."
The large-scale layoffs within the last week caught Shelnutt's eye. Weyerhaeuser Co. shuttered its Mountain Pine veneer and plywood mill, immediately eliminating 340 jobs. Georgia-Pacific Corp. laid off about 300 employees from its Crossett plywood mill. And on Monday, Sanyo Manufacturing Corp. announced it would eliminate a third of its workforce at its Forrest City plant, costing about 300 workers their jobs.
Shelnutt said these closures come from aging plants and equipment and shifts in consumer demands. As the nation's housing market falters, the demand for wood falls, he said. With Sanyo, company officials attributed the Forrest City layoffs to consumer demand shifting away from the cathode ray television the plant produces to flat panel televisions.
The layoffs some immediate, others to take place in coming months will begin to affect state tax collections. While steady job growth in other sectors and rising wages are expected to buoy state revenues to an estimated $843 million surplus by the end of the fiscal year, Shelnutt warns that the state may begin to lose its economic momentum.
To regain it as more workers leave the production line for unemployment, state officials are trying to offer education opportunities to put them back to work.
Gov.-elect Mike Beebe has called for the creation of a $50 million fund to attract new businesses to the state and help existing businesses expand. Beebe, who succeeds Gov. Mike Huckabee in January, said funding could come from the state's General Improvement Fund.
Educating both students and workers into the future remains a priority for the state, Chandler said. He said the state also must draw in high-tech companies to fill the gaps left as mill towns and manufacturing plants lose jobs.
"They're not just jobs, they are families," Chandler said. "That's why it's really important for us in the state. In the long term, we can educate ourselves into a better position economically."