Southwest Virginia Population decline 2010-2018.

Pinnacle Wood Products Follies in Wise County

by Lewis Loflin

October 25, 2007 Wise County landed 200 new jobs Wednesday when Pinnacle Wood Products of Virginia opened a plant in the Wise County Industrial Park. Ray Whitt, president of the company, said the region's work force and the support he received from state and local government are primary reasons he located in Wise County.

So say public officials. The case of Pinnacle Wood Products of Virginia is a typical example of corporate socialism. This is a private business in name only as the taxpayers seemed to have provided nearly all the funding. To quote some news releases from www.vaceda.org on this:

Gov. Tim Kaine has announced (2007) Pinnacle Wood Products of Virginia, Inc., will open a products manufacturing operation in Wise County. He says the plant, a $1.4 million investment, will bring 200 new jobs to Southwest Virginia.

Pinnacle Wood Products of Virginia, Inc., established in 2007 by Ray Whitt, the former plant manager at a Bush Industries furniture plant in St. Paul, which closed in 2004, will make custom cabinets, vanities, thermafoil doors and closets for commercial construction companies.

Same stuff Bush made as I understand. To quote a press report,

The Virginia Economic Development Partnership worked with Wise County and the Virginia Coalfield Economic Development Authority (VCEDA) to secure the project for Virginia, according to the press release. The Virginia Tobacco Indemnification and Community Revitalization Commission approved $200,000 in Tobacco Region Opportunity Funds to support the project.

The Virginia Department of Business Assistance will provide training assistance for the plant through the Virginia Jobs Investment Program. The VCEDA Board of Directors approved a $1.2 million loan to the Wise County Industrial Development Authority to purchase equipment and machinery for this start-up operation. The Wise County IDA will lease the equipment to Pinnacle Wood Products of Virginia.

The building they are in is also owned by taxpayers. Their website is at http://pwpofva.com/ and one should ask why are the taxpayers footing this "start up" and not a bank? In no manner is this private enterprise in my view, but corporate socialism.

The 200 jobs and the bank problem are revealed elsewhere. Let's quote another source on this issue:

"The good attitudes of local folks and the quality of their work are what convinced Ray Whitt to start his business, Pinnacle Wood Products, in the Esserville Industrial Park in Wise County, Virginia. Pinnacle has nine employees now, but Whitt hopes to grow the company to 200 employees in two years.

He has received more than a million dollars worth of loans from the Virginia Coalfield Economic Development Authority and Virginia Tobacco Commission, according to the Coalfield Progress. Whitt, a Pike County, Kentucky, native, formerly worked with Bush Industries furniture plant, which closed its southwest Virginia operations in 2004."

He has only nine employees and hopes to have 200 workers some day? Then how can Gov. Kaine claim this "will bring" 200 jobs when the owner isn't even sure himself? And why are the taxpayers even funding another furniture company nearly identical to the failed Bush Industries furniture plant that failed in nearby St.Paul?

Yet it's these very industries that are so vulnerable to China that has caused most of them in the region to shut down. So why are we funding another one with tax dollars and not expect the same result? Blue Ridge Wood Products in Bluefield was another such company VCEDA claimed hundreds of jobs created that went out of business about year after that got funded in 2005.

In addition the building housing Pinnacle Wood Products was supposed to be occupied (I believe) by Southwest Logistics less than two years before. Those 120 new jobs never materialized either. To quote The Roanoke Times July 15, 2004:

Southwest Logistics LLC, a 1-year-old company that does warehousing and dispatch services to clients, will relocate to the Wise County Industrial Park with plans to create 120 new jobs over the next four years.

"This new venture will provide jobs for the area's exceptional work force and allow Southwest Logistics to grow to meet industry demands," said Clinton Vance, its president. The company will move into the former Buster Brown plant, which closed in 2001. The Wise County Industrial Development Authority leased it on a piecemeal basis, Carl Snodgrass, the county's economic development director, said Monday...

This writer isn't suggesting anything illegal on the part of Pinnacle Wood Products of Virginia or any other company or individual, but there is a severe question of the bad judgment of public officials being given a blank check by taxpayers to create jobs that never seem to materialize. Ref. http://appalshop.org/wmmt/comment/reply/56 and Ref. 10/24/2007 Kingsport Times-News. Posted April 14, 2009.

Update April 19, 2010. According to a document obtained under the Freedom of Information Act the Wise County Virginia IDA has released the following statement in regards to Pinnacle Wood Products from Karen Mullins the IDA Attorney:

There were no incentive agreements with Pinnacle. There are presently five (5) employees and the status of the loan from VCEDA to the IDA is past due.

No incentive agreement but the loan is past due??? So much for those 200 new jobs.

See Three Decades of Job Losses in Southwest Virginia

Note that minimum wage in 1970 was $1.60 adjusted for inflation is $10.46 in 2018. That is what I call adjusted minimum wage. Assuming one even gets 40 per week that's for 52 weeks that equals $21,756. Per capita income in Bristol Virginia 2018 is $21,589. It is similar to this across the whole region.

Third world? Some have called us the China of America minus jobs.

Just a few of hundreds of plant closings see Smyth County the China of America loses jobs.

Update September 3, 2019. Based on data from Dr. Steb Hipple economist at East Tennessee State University (retired), his data goes to the 3rd. quarter of 2016. The level of job losses is Tri-Cities is staggering, worse than what even I thought.

(The Tri-Cities Consolidated Statistical Area is composed of the Kingsport/Bristol MSA and the Johnson City MSA.).

The Bristol TN-VA, Kingsport, and Johnson City Urbanized Area Labor Market lost thousands of jobs shrinking the labor force that shrank the unemployment rates. The above table shows a decline of labor force by almost 18,000. But it gets worse.

Includes: Johnson City, TN, Carter County, Unicoi County, Washington County.
All workers BLS:
2016 78,140 workers, Median hourly wage $14.47, Annual $40,140
2018 77,020 workers, Median hourly wage $15.38, Annual $42,740
Labor force fell 1120 jobs in 2 years.

Kingsport-Bristol-Bristol, TN-VA MSA includes: Bristol city, VA, Hawkins County, TN, Scott County, VA, Sullivan County, TN, Washington County, VA.

All workers BLS:
2016: 118,470, Median hourly wage $15.27, Annual $41,050
2018: 116,150, Median hourly wage $16.50, Annual $43,480
Labor force fell 2,320 in in 2 years.

That's not the worst of it still. For Tri-Cities the total labor force is 193,170. The labor force shrank by 3,440 jobs in 2 years - during a so-called boom. In 2009 the labor force was 247,965, minus 193,170 equals a staggering loss of 54,795 less people are working in 2019 than in 2009!.

I can't believe this myself. Anyone working here knows it is bad. That could be explained by high poverty and disability rates, and large numbers of retirees leaving the labor force. I don't know because a lot of data is hidden from the public. But makes sense when we look at the national labor force declines.