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The Kelly story ends

October 07, 1998

In 1987, the Goodyear Tire & Rubber Company stopped manufacturing its Kelly-Springfield brand in Cumberland, idling 1,000 workers. With a $13 million state loan, officials of the Queen City kept about 700 white-collar management jobs there, but the last 400 of those will be gone by September of 1999, according to an announcement released Monday.

Goodyear was forced to cut back on its operations in the late 1980s after a failed venture with an oil-exploration company left it vulnerable to a corporate raider. According to a December 1986 New Republic article by James K. Glassman, now an investment columnist for The Washington Post, Goodyear paid Sir James Goldsmith $93 million to end his takeover attempt. After the fight, Goodyear had to slim down its operations, and though the Kelly brand was retained, the manufacturing plant in Cumberland wasn't.

It wasn't for lack of a fight. Former workers at Kelly put together a $26 million financing package in an attempt to restart the plant as an employee-owned company producing bias-ply tires (as opposed to radials.) But after the Maryland Industrial Development Financing Authority rejected a $5 million loan guarantee, the idea went nowhere.

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In 1994, U.S. Sen. Paul Sarbanes' office obtained a $528,000 grant to convert the factory into the Riverside Industrial Park. Since then a new $7 million YMCA has been built there, county offices and the government vehicle garage have been relocated there as have some private firms like the Biederlak Blanket Company, Overhead Door and others.

The lesson here - and one that's applicable to any local jurisdiction - is that while the high wages of a corporate giant are certainly welcome, whether its jobs stay depends on factors beyond a local government's control. For stability's sake, it might be better to seek out those small and mid-sized firms whose ties to the area won't be severed by a decision made in a corporate headquarters hundreds of miles away.

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