National Gypsum doubling plant size

October 28, 1994|By Timothy J. Mullaney | Timothy J. Mullaney,Sun Staff Writer

If one announcement of a big manufacturing plant expansion is good news, is three or four a trend? That's the question Maryland business and economic leaders are trying to answer after a week in which the state's long-shrinking manufacturing sector has seen a wave of good news.

Yesterday, National Gypsum Co. announced a $55 million expansion that will add a second production line at its wallboard factory in Southeast Baltimore.

That follows last week's groundbreaking for a $38.5 million W.R. Grace & Co. chemical plant at Curtis Bay, and the decision earlier this week by FMC Corp. of Chicago to spend $88 million to expand a Baltimore herbicide factory.

National Gypsum said its expansion will more than double its plant capacity, but will add few jobs to the 108 already there. FMC said its expansion will add 50 jobs, the same number Grace said its new factory will create.

Is the news good? Of course. But, say economists and business leaders, it's not too good.

"These individual decisions, it is purely serendipity that these are occurring in such proximity," said Champe C. McCulloch, president of the Maryland Business Council, the parent of the state Chamber of Commerce. "There is not some fundamental groundswell going through the Baltimore manufacturing community."

That's one way to look at it. Michael A. Conte, director of regional economic studies at the University of Baltimore, prefers another.

The last decade has been terrible for manufacturing employment, in Maryland as across the nation, as manufacturers learn to do more with fewer people, he said. The recent raft of announcements isn't going to mean a job boom, he agrees, but he says keeping manufacturing jobs stable in the face of long-term pressures is a pretty good result for now.

"We have been losing manufacturing throughout the 1980s," even before the state's slow recovery from the early 1990s recession became a central issue in this year's gubernatorial race, he said. "We have been losing 2 percent a year. . . . I think this is tremendous news. We're battling against losses. Anything where we hold steady is good news."

In 1993, Maryland actually added 102 jobs in manufacturing of nondurable goods, Mr. Conte said, a result he called "great." Of course, the state also lost 4,000 of its 99,000 jobs in durable-goods manufacturing, he said.

From this month through next September, Mr. Conte expects Maryland to lose 1.09 percent of its manufacturing jobs -- better than recent years despite high-profile problems like those of London Fog Corp., which closed its Hancock and Williamsport raincoat plants this month and temporarily shut down its Baltimore operation.

He said one key reason manufacturing has stabilized has been the Schaefer administration's commitment to upgrading the Port Baltimore, such as the construction of the Seagirt Marine Terminal, which opened in 1990.

The companies that are expanding in Baltimore downplayed any connection between their decisions and a broad uptick in manufacturing.

"There is a normal increase in demand for wallboard because of increases in population and household formation," said Allan Cecil, investor relations spokesman for National Gypsum, which is based in Charlotte, N.C. That long-term trend is independent of short-term economic cycles, he said. "To maintain your market share, you have to add capacity."

"We have high-tech capacity at Baltimore," said Jeffrey H. Jacoby, a spokesman for FMC. "We have a high-quality work force and work area. We have all those things in place."

FMC's expansion is scheduled to begin operating by mid-1996, plant manager John L. Sanderson said. National Gypsum will open its expansion by 1997, and Grace is aiming for late 1995.

James R. Hyde, president of Grace's Baltimore-based Grace Davison division, said business for the petroleum refining chemicals the company will make at the new plant isn't very cyclical. Instead, he said, the plant is being built to supply what Grace sees as likely long-term growth in markets such as South America.

While FMC and National Gypsum said they received no city or state incentives to expand in Baltimore, Mr. Hyde said Grace chose Baltimore partly because of intervention from the state Department of Economic and Employment Development. DEED is helping the company arrange its environmental permits more quickly than is usually possible.

"That was a major factor," said Mr. Hyde, who said Florida-based TC Grace considered four states.

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