Ark saw loss of manufacturing jobs, some gains in 2006

On the third day of 2006, ARC Automotive announced it would transfer 300 jobs from a plant it ran in Camden for more than 20 years to operations in Mexico and China.

For Arkansas' manufacturing industry, the year didn't get much better from there.

Economic pressures, consumer demand and cost-saving efforts had companies closing plants and laying off workers throughout the state during much of 2006. But foreign investment, government contracts and local efforts helped bring money to some areas.

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.

Beginning with the ARC Automotive layoffs, the state would see more of its manufacturing jobs disappear, in part due to cheaper labor being available abroad.

Whirlpool Corp. announced plans to cut 1,640 jobs at its Fort Smith refrigerator plant, as it transferred production to Ramos Arizpe, Mexico. That came on top of a Whirlpool decision to shut down a Searcy plant it bought from Maytag, which put another 600 out of work.

In Heber Springs, Bosch Tool Corp. said it will close its factory there by the end of 2007, which will eliminate 400 of the plant's remaining workers. Company officials said would shift production of its circular saws to China.

Changing consumer demands also shuttered plants. Slowing demand for wood led to layoffs in plywood mills. Weyerhaeuser Co. closed its Mountain Pine veneer and plywood mill, immediately eliminating 340 jobs. Georgia-Pacific Corp. laid off about 300 employees from its Crossett plywood mill.

Demand for flat-screen and liquid crystal display televisions caused Sanyo Manufacturing Corp. to lay off 300 employees at its Forrest City plant. That plant's lines were designed only to produce cathode ray televisions.

In Little Rock, clothing manufacturer Levi Strauss & Co. made plans to close its distribution center, eliminating 340 jobs by the end of February 2007.

But not all changes brought immediate layoffs. International Paper Co. entered an agreement to sell its Pine Bluff paper mill to New Zealand-based Carter Holt Harvey in October. Officials said the sale, for an undisclosed sum, would not immediately mean layoffs for the mill's 1,150 workers.

As other manufacturers left the state, Hino Motors Ltd. began production in October at its $235 million plant in Marion. The Toyota Motor Corp. subsidiary's plant started work with 220 employees, and is expected to swell up to 450 people as the factory gets up to speed.

Hino's primary business is trucks, and a company official said in July that Hino could begin building a truck assembly plant near Marion by 2009 if the company meets its goal of selling 10,000 vehicles annually in the United States.

Government and private business contracts helped two large aircraft manufacturers with plants in Arkansas this year. Dassault Falcon Jet Corp. announced a $1.1 billion aircraft contract in September, which will add 200 jobs to its Little Rock National Airport based operation.

Raytheon Aircraft Co. announced plans for a $16.3 million expansion of its aircraft finishing plant at the airport as well. The new work will create 150 full-time jobs. The federal government also awarded Raytheon a $346 million contract to build missiles for U.S. and United Kingdom navies. Its East Camden plant will build some of the missiles.

Alberto-Culver, a hair and skin products company based in Illinois, announced in December it will open a plant in Jonesboro that will employ 400 people. The $60 million new factory will begin production in 2008.

Some communities even took economic development into their own hands when trying to gain back industry. After buying a former American Greetings plant, McCrory residents were able to bring a paper company into town with a promise of 300 new jobs. The town itself has a population of only 1,700.

Despite those gains, officials believe Arkansas can expect to see more of its manufacturing jobs slip away to countries with lower average wages.

"It's the painful transition from lower paying manufacturing jobs to the world economy," Mitch Chandler, a spokesman for the Arkansas Department of Economic Development, said in December. "We compete with India, Mexico and China, not just Mississippi."

Outgoing Gov. Mike Huckabee, however, said that in his final days in office he was working on some "stunning and exciting" business announcements.

With the state facing a projected $843 million surplus, Huckabee said the state has more opportunities to offer incentives to business prospects. But Huckabee urged caution on incentives.

"Arkansas should give incentives, but we shouldn't act like we're so desperate that we would break the bank and obligate and indebt the next generation of Arkansans just to have a groundbreaking," Huckabee said.