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Job gains could exceed loss here

January 24, 2009|By ARNOLD PLATOU

WASHINGTON COUNTY -- Fujicolor Processing. Statton Furniture Manufacturing. Teleflex Marine. Sun Chemical. West Marine. Volvo Powertrain. Citi. Rayloc. And others.

Through closings, layoffs or transfers, all contributed to job losses in Washington County in 2008.

But it might be surprising to learn that more jobs were gained here in the past year than were lost, at least at major employers.

According to records kept by the Hagerstown-Washington County Economic Development Commission, plans were announced here last year to create a total of 1,184 jobs.

That's 129 more than the 1,055 that were lost, the EDC said.

And a few more jobs might be on the way soon.

EDC Executive Director Timothy Troxell said a company has agreed to lease the rest of the large warehousing building near Hagerstown that Kellogg Co. moved into this past summer.

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Troxell declined to identify the new company or say how many it will employ. But, he said, it needs the more than 300,000 square feet Kellogg isn't using, plus 60,000 that will have to be added by late this year.

And, Troxell said, he's working with a prospect "that definitely is looking very good." He declined to identify the kind of business, but said its "project costs will be high, but the number of new jobs will not be as significant."

Still, the economy is tight.

"That's all we're seeing right now," Troxell said of hot business prospects.

"I will say our prospect activity level is lower than it was at this time last year," he said. "I think companies are waiting to see what the new (Obama) administration brings to this economy."

Some trends

In 2000, the EDC began doing an annual report on "significant business activity," tracking company announcements of, say, layoffs or expansions that are planned.

The report doesn't follow up to see, for example, how many people actually were idled or hired. And, Troxell said, it doesn't include some kinds of businesses, such as restaurants, that it ordinarily wouldn't try to recruit to the area.

Nonetheless, it does show some trends.

One is job gains have exceeded job losses every year except in 2001. In that year, 629 jobs were created, but 1,011 were lost, according to the records.

The biggest losses came when Citicorp moved a technology division down South, costing the area 350 jobs, and when 295 jobs were lost at the TruServ hardware and lawn equipment distribution center where Home Depot's center is now, Troxell said.

The previous year -- 2000 -- was the reverse. While just 213 jobs were lost, announcements came of 4,036 new jobs, including a total of 1,600 projected at such stores as Wal-Mart and Home Depot as plans for the Centre at Hagerstown were unveiled.

The margin between job losses and gains did not come close again until 2006, when 600 were to be idled at Volvo's manufacturing plant and nearly 200 others at Roadway Express' freight terminal near Funkstown, Troxell said.

Projects go forward

The EDC's latest business activity report shows $207 million in investments for new buildings, expansions and equipment were announced here last year.

Troxell said $50 million of that was to be at Volvo's plant, but those plans have been delayed until the truck market improves.

"But they still intend to do that here in Hagerstown when the market comes back," he said.

Still, major projects did go forward, he said.

For example, FedEx Freight is building a new terminal at the intersection of Interstate 70 and Md. 63 and FedEx Ground is expanding its shipping terminal in Hopewell Valley. Together, those projects are to cost $68 million, according to EDC records.

And what of Washington County Hospital's ongoing construction in the Robinwood area of its $267 million hospital?

That's important, too, though it wasn't counted in any of the EDC's yearly reports, Troxell said. When the project was announced in 2000, the total expense wasn't projected, so now, the sizable investment will have to be included as a "footnote" somewhere, he said.

'Still open for business'

Still, with companies investing so much money here now, why was last year's job gain so slim?

Troxell said he thinks there are two reasons.

"One is that, obviously, companies are trying to be as technologically efficient as they can and are investing more money into equipment than they are into hiring people," he said. "They're utilizing technology instead of just throwing manpower into it."

For instance, Troxell said, Volvo has spent several million dollars making its research and development area here more efficient, but it employs only a few dozen people there.

"They're highly specialized and trained people, but not as many people," he said.

The second reason why there aren't as many jobs being created is because of a change in the kinds of companies the EDC is trying to bring here, Troxell said.

"Beginning of last year, we were at 4 percent unemployment," he said. "Everybody said, 'We want higher-paying jobs, we want higher-paying jobs.'"

So, Troxell said, the EDC has started targeting companies in such job areas as aerospace and biotech. Such companies are likely to invest a lot more money in job sites, but not be as labor-intensive, he said.

"They, typically, aren't your companies that are going to be bringing 400 people with them," Troxell said. "They, typically, are going to be bringing in smaller numbers.

"Now, back when the unemployment rate was much higher than 4 percent, we were out attracting warehouse distribution jobs and they brought with them a lot of employment.

"We're still open for business for warehouse distribution contacts. We're more than happy to help them, but we're not out aggressively seeking those types of jobs for our community."

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