Md. factories on the edge Hit by recession, face an uncertain future

February 24, 1991|By Kim Clark

In the 12 years he has worked for the Berlin Metals plant, which cuts sheets of steel to size for cans, Tony Forte has never seen the Quad Street plant so lean.

The plant was humming along with 80 employees last year when demand started to plummet. Today, Mr. Forte oversees a skeleton crew of 14 and fights rumors that the plant will close soon.

But the plant manager concedes that "we can't afford to lose much more."

Economists and manufacturing executives around the state say the recession is pushing Maryland's already troubled industrial sector -- which employs one in 10 working Marylanders -- into a precarious position.

The economic downturn, often mistakenly viewed as a white-collar recession, is hitting blue-collar workers hardest, unemployment statistics show.

More than 8,000 Maryland factory jobs disappeared from December of 1989 to December 1990 alone, while the number of jobs in the finance, real estate and insurance rose by more than 500 in the same period.

Most economists predict that Maryland will lose thousands morfactory jobs before the recession is over, and there is growing concern that the state, like Berlin Metals, cannot afford to lose much more in a sector viewed as the backbone of its economy.

When Maryland loses a manufacturing job, it loses one of the highest-paying jobs in the state. Factory workers, on average, earn twice what workers in retail stores earn, for example.

And when factory workers get laid off, everyone from store clerks to bankers suffers. A recent state study found that every manufacturing job creates as many as four other jobs throughout the economy -- twice the ripple effect of service jobs.

Maryland's manufacturing sector has been retrenching for decades. The debate now emerging is whether the paring has made the sector lean and hardy, or dangerously weak.

In Maryland, an industrial giant in the 1950s, manufacturin businesses shrank even during the go-go years of the 1980s.

The number of manufacturing jobs nationwide today is about the same as in 1972, but manufacturing employment in Maryland has fallen by 45,000 jobs, or about 18 percent, during that period.

It isn't just local plant workers who have suffered disproportionately. The importance of the industrial businesses themselves has faded.

Output of the nation's factories has rebounded in recent years and now makes up nearly one-fourth of the country's total production, according to a report recently released by the Department of Commerce. But the economic importance of Maryland's heavy industries has been declining for two decades, state officials say. Factories in the state now make up less than 11 percent of the state's economy.

The reason Maryland's factories weakened while factories in other states rebounded in the 1980s was that the state's economy was heavy in industries hit hardest by previous recessions, economists say.

With 17,000 workers, Bethlehem Steel Corp., for example, was the state's largest industrial employer in 1980. But after losing hundreds of millions of dollars in the early 1980s, Bethlehem slashed the work force at its Sparrows Point steelyard by nearly 10,000 and now has only 7,400 employees there.

"There is this perception that Baltimore is a blue-collar city," said Stanley Duobinis, a regional economist for the WEFA group in Bala Cynwyd, Pa. But the companies that defined the image of the state's industrial heart "have really been beaten up in the last decade," he said.

Hit harder than the rest of the nation in past recessions, and recovering slower in past booms, Maryland's industrial sector is once again falling faster than that of the rest of the nation, Mr. Duobinis said.

Federal unemployment statistics for December, the latest published for the state, show that Maryland's overall unemployment rate has surpassed the national average and that factory layoffs have cut a third deeper here than they have across the nation.

While the number of factory workers nationwide slipped from 19.3 million to 18.7 in 1990, a decline of 3 percent, Maryland's manufacturing work force dropped 3.9 percent.

"There is no question the decline of [Maryland's manufacturing] sector is going to be aggravated" by this recession, Mr. Duobinis said.

The reason for the dim outlook for Maryland during this downturn?

Ironically, while the basic industries such as steel suffered through the 1980s, local factories involved with the construction, automotive and defense industries boomed. And by the time recession hit in late 1990, Maryland had again developed an unusually heavy concentration of factories in fields especially vulnerable to the downturn.

Westinghouse, for example, thrived during the defense-spending spree of the 1980s. It took over from Bethlehem as the state's top industrial employer as its local work force rose from 14,00 in 1981 to 17,000 last year.

"We were one of the companies keeping the sector up," said Aris Melisseratos, a Westinghouse vice president.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.