Leaping technology, lagging smokestacks

Changes: A fast-moving marketplace leaves traditional definitions in the dust.


January 23, 2000|By Kristine Henry | Kristine Henry,Sun Staff

The outlook for manufacturing in Maryland is: A) bleak; B) bright; C) both of the above. The answer is C).

For traditional smokestack industries -- steel mills, apparel factories, machinery plants and the like -- the forecast is for a slight dip in the number of jobs this year.

But if technology companies that have manufacturing components are included, then the picture brightens. Many state officials see a booming sector and job growth in technology-related manufacturing for 2000.

The marketplace is changing so rapidly it's getting harder to define what manufacturing is.

Although traditional manufacturing jobs have increased slightly over the past few years, they have declined 14 percent over the past decade, from 207,000 in 1989 to 178,000 by 1998.

Decline expected

"Manufacturing in general is not a hot employment area, and I don't know if it will ever be a hot employment area in the future," said Mark Vitner, who follows Maryland for First Union Corp. of Charlotte, N.C.

Analysts generally expect the number of jobs -- considered especially valuable to the economy because of their relatively high wages -- in the sector to decline about 1 percent this year. According to the state Department of Labor, Licensing and Regulation, the average weekly pay for a manufacturing worker was $802 in 1998. That compares to $345 a week for retail workers, $662 for construction workers and $874 for those in finance, insurance and real estate.

Officials at the state's largest manufacturer, Northrop Grumman Corp., said the number of jobs in its manufacturing segment is expected to remain stable this year, barring any unforeseen cuts in the company's programs. Northrop employs about 7,500 in Maryland -- down from 18,000 in 1990 -- although a majority of the current employees are in the technology and engineering segment. A spokesman for the company said many of the jobs are intertwined and it is difficult to quantify the percentage of workers in manufacturing.

Shrinking steel

Bethlehem Steel Corp., one of the Baltimore area's largest employers in manufacturing, will go from about 5,200 workers in 1997 to 4,000 this year because of a cost-reduction agreement with the United Steelworkers of America. The deal allowed Bethlehem to invest hundreds of millions of dollars in a new cold-sheet mill at Sparrows Point.

The mill, scheduled to begin production later this year, ensures the plant will stay open for at least another decade. But it's a far cry from the late 1950s, when the Sparrows Point plant employed more than 30,000 workers.

"When it comes to Maryland's economy, manufacturing seems to be weakening more than anything else, but it may have bottomed out," said Robert Sweet, managing director and chief economist at Allied Investment Advisors. "What everybody's watching in manufacturing is the GM facility. That's still up in the air."

Uncertain future

General Motors Corp.'s threatened van-assembly plant in Baltimore employs about 2,500 people. In November, GM granted the 64-year-old plant another extension -- this time through at least fall 2003 -- but beyond that, the plant's future is unclear. GM also said it would cut back from two shifts to one because of declining demand for the Chevy Astros and GMC Safaris the plant has been producing since 1984.

Any workers laid off will have first priority for jobs at GM's new Allison Transmission plant, now under construction in White Marsh and the state's first new heavy manufacturing facility in nearly 30 years -- but that plant will employ only about 375 workers.

Bright spot

But the future of manufacturing may be in technology rather than cars and steel.

"The real bright spot is anything related to technology -- the Internet, computers and telecommunications," said Paul Engle, a manufacturing consultant with the Baltimore office of Grant Thornton LLP, an accounting and management consulting business. "They have all been a tremendous boon to Maryland's economy."

Fiber optics firm Ciena Corp., for example, has been hiring for several years. About 400 of its 900 employees in Maryland are involved in manufacturing the company's products, said Mark S. Cummings, senior vice president of operations -- and those workers are in demand.

As of last month Ciena was trying to fill 20 entry-level positions in its optical assembly operation. The company also needed about 20 senior technicians -- jobs that are harder to fill and often require recruiting from other states. Though Cummings classifies Ciena as a telecommunications company, Vernon Thompson, assistant secretary for regional development at the state's Department of Business and Economic Development, does not.

"Ciena is a manufacturer, in my opinion. They are making stuff; if you make stuff, you're a manufacturer," he said. "Right now, across the board, the manufacturing companies that we come into contact with are all experiencing a fairly good increase in sales, a 12-percent average, and increased employment of 7 percent."

Apparel is hurting

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.