Phony New Jobs in Smyth County Virginia
by Lewis Loflin
Update: Kennametal plant to close in Southwest Virginia, more than 80 jobs impacted. SMYTH COUNTY, VA (WJHL) – News Channel 11 confirmed a plant in Southwest Virginia will be closing and will result in more than 80 job cuts. May 26, 2016. Declining sales in the coal business are being blamed for the closure of Kennametal in Smyth County.
Just as of 1988-2002 in the "China of America":"A Town Traded Away" www.latimes.com
CHILHOWIE, Va. — People in this pocket of Appalachia aren't sure what it’s like to work in a Mexican garment factory or an Asian furniture plant. But they know how it feels to be globalized.
For years, manufacturers flocked to Chilhowie and neighboring communities because of their abundant supply of loyal, low-cost workers.
"This was the China of Virginia," said Mike Hopkins, who supervises production at a local wood products mill.
Then, in a sudden turn of the global screw, plants began shutting down and moving out. Since 1988, Smyth County has lost 10 big factories employing 2,075 workers. Five of the plants and 1,430 of the jobs were in little Chilhowie, population 1,827...
Woodgrain Millwork announces the rehiring of 17 workers in Marion, Virginia. They started in 1996 with around 30 workers and now employs 140. This is touted as being related to the forestry industry which is puzzling - the State has spent millions trying diversify the local economy away from mineral extraction (coal) and timber. Instead this company is being paid $100,000 to do just the opposite of other efforts.
These are really not overall new jobs. This is a pathetic rehiring of workers laid off from identical jobs at Merillat that closed January 2013. See Smith County Loses Another 300 Jobs at Merillat. These are rehires not really new jobs.
Another furniture company came to Smyth County in November 21, 2013. Liaoyang Ningfeng Woodenware Co., Ltd. a Chinese company announced 125 "new" jobs when they largely rehired workers from Merillat. To quote a press release from the Gov. Bob McDonnell on the generous corporate welfare package:
The Virginia Economic Development Partnership worked with Smyth County and Virginia's aCorridor to secure the project for Virginia. Governor McDonnell approved a $250,000 grant from the Governor's Opportunity Fund to assist Smyth County with the project.
The Virginia Tobacco Indemnification and Community Revitalization Commission approved $450,000 in Tobacco Region Opportunity Funds for the project. The company is eligible to receive benefits from the Virginia Enterprise Zone Program, administered by the Virginia Department of Housing and Community Development.
Through its Virginia Jobs Investment Program, the Virginia Department of Business Assistance will provide funding and services to support the company's recruitment and training activities.
The value of the above handouts is about equal to the $2.1 million from the company. Even both of the rehires combined if the jobs are ever delivered still doesn't come close to the 300 jobs lost at Merillat. This is a very unstable industry easy to relocate or shut down.
Update 2017: I told you so. The 125 new workers for the Chinese company never materialized. They got the money and ran. To quote The Roanoke Times Mar 7, 2016:
Darrell McCready passes time driving plastic golf balls inside an empty factory that was expected to house production lines tended by 125 workers making more than $15 an hour. "I'm the only one here," said McCready, the caretaker for the factory in Smyth County where former Gov. Bob McDonnell 26 months ago announced a Chinese company's plans to produce furniture. The project got an infusion of $1 million in taxpayer money. None of the promised production jobs have been filled, with six months remaining until the company must begin to repay grants. The company received $250,000 from the Governor's Opportunity Fund, $300,000 from Smyth County and $450,000 from the state tobacco commission.
Another Chinese furniture manufacturing project, this one promising 300 jobs, already has been declared dead and has saddled Danville with a $1 million debt...
As for the fraud and corruption-ridden Tobacco Commission:
Tobacco commission puts locality on hook
One month before Gov. Terry McAuliffe announced the Lindenburg project, Danville was cleaning up after another failed Chinese-led business venture.
GOK International in 2012 outlined plans to invest $12.5 million and hire 300 people to manufacture office, hotel and institutional furniture in Pittsylvania County. The Tobacco Region Revitalization Commission approved a grant of $1 million to defray the cost, according to commission records.
By fall 2014, the commission wanted its money back, the records show...the tobacco commission requires local governments to repay unearned corporate grants — Danville, in the case of GOK.
Deputy Director Ned Stephenson said the tobacco commission doesn't go after the company because it "chooses to shift the investment risk to the entity that stands to gain from the investment, the locality."
Danville, which has an annual general fund budget of $102 million, has paid the commission $500,000 and agreed to pay $500,000 more in each of 2016 and 2017, according to commission records...
Hands out hundreds of millions of dollars and never checks job status what happens to the money.
- Virginia Tobacco Commission Scandals 2014
- More on Phil Puckett and the Virginia Tobacco Commission Scandal
- Virginia Tobacco Commission Waste and Pork Update for 2009-14
More on Woodgrain Millwork
Additional job losses in wood related industry in Smyth County:
2002 Virginia House Furniture in Marion 334 layoffs;
2002 American of Martinsville Furniture in Marion 430 layoffs;
2001 Lea Industries Furniture in Marion 170 layoffs.
The company website is at www.woodgrain.com.
On November 6, 2014 Woodgrain Millwork fired 200 employees in Prineville, Oregon. To quote, "It's becoming a fatal pattern for the timber industry. The latest cutback at Woodgrain Millwork will have a big impact on the city and Crook County, where it's been the third-largest employer, with over 200 jobs."
Source: www.ktvz.com. Yup, another good corporate citizen.
On the bad side we lost another 230 good manufacturing jobs in nearby Bristol at Ball Corp. in May. I hope this company will last. Ref. BHC April 19, 2016.
To quote the Smyth County Comprehensive Plan May 2013:
Total employment in the county decreased by 12.8 percent over the six-year period from 13,404 persons in 2003 to 11,683 persons in 2009. These numbers show the dramatic impact of the global and national recession which brought employment decreases especially in 2009. The most apparent change in employment over the period is the continued decline in manufacturing industry with the percentage of persons employed in manufacturing falling from 31.8% in 2003 to 27.8 % in 2009.
This decline is due to the downsizing of employment, especially with manufacturing companies that have direct ties to the home building industry, such as kitchen cabinets, stair components, and other. Employment also decreased in construction and decreased slightly in wholesale and retail trades.
But government and Burger King saw gains:
On the other hand, the, health care, accommodations and food service, and public administration sectors increased employment and also their proportional share of the employment in the county. Health care and social assistance employment represents over 20 percent of the employment, and over five percent of the jobs in Smyth County are considered public administration.
Additional jobs losses in mainly Smyth County.
1998 Tultex Apparel Chilhowie 200 jobs;
1999 Kerns Bakery East Bristol 180 jobs;
1999 PCS Phosphate Saltville 50 jobs;
1999 Buster Brown Apparel 300 jobs;
2000 McBee Systems check printing Damascus 65 jobs;
2000 GreenSeed Abingdon 10 jobs;
2000 Svedala Industries Mining Machinnary Saltville 25 jobs;
2000 US Gypsum Saltville 200 jobs;
2001 Natilie Knitting Chilhowie 350 jobs;
2001-2008 Electrolux Vacuum Cleaners 550-600 jobs**;
2002 Spring Ford Knitting Chilhowie 120 jobs;
2002 Dana Corporation auto parts Marion 200 jobs*;
2002 Virginia Glove Glade Spring 45 jobs;
2002 Bristol Brass Copper Bristol 65
That's almost 3000 jobs in three years all directly casualties of NAFTA. Thank you Bill Clinton and Congressional Republicans.
* DANA fired 270 workers in Bristol. See DANA Automotive Fires Bristol Workers Heads for Mexico.
** Electrolux fired 550 workers in Bristol and ended up collecting a colossal corporate welfare package from Tennessee.
Former Bristol Employer Gets $188 Million in Tennessee Corporate Welfare
The antics of Electrolux Corporation is an example of the rampant corruption of Republican Corporatism I've ever seen. They are literally paying companies to fire and downsize American workers with our tax dollars.
One critic put this deal in perspective when it closed just its Canadian operation:
So Electrolux was able to get rid of 60 workers, cut the wages of the jobs they kept by more than $4 per hour, get a more central distribution location, and a free factory courtesy of state and local governments in Tennessee.
The state also agreed NOT to sue to get the money back if Electrolux closed or failed to deliver!
Read the whole sorry story: Obscene Electrolux-Tennessee Incentive Deal Puts State at Risk by Lewis Loflin
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