MOORESVILLE, N.C. - Factories just like the Matsushita plant here made North Carolina an industrial colossus less than a decade ago, the state with the largest percentage of its workers in manufacturing jobs. Surrounded by fountains and landscaped nature trails, that pristine compressor factory seemed to embody the state's economic promise when it opened with fanfare in 1991.
But North Carolina lost 27,800 manufacturing jobs last year - by far the largest such loss in the country - and the trend continued recently when the Matsushita factory's Japanese owners announced that they would close it this month, putting 530 employees out of work. Air-conditioning compressors will instead be made in China and Malaysia, the company said, and stunned workers now contemplate a future of sporadic, lower-paying jobs.
"Look at this place - I thought I would retire here," said Helen Dishman, a 48-year-old line leader for Matsushita, gesturing at the 10-acre factory on its lush 100-acre lot, the town's largest employer last year. "Now I'll be lucky to find something that doesn't even pay as much."
Probably more than any other state, North Carolina has been shaken by a drain of low-wage factory jobs overseas in the last five years.
One by one, the pillars on which the state's economy was built 20 years ago - textiles, furniture, apparel - have begun to fall to foreign competition, and its growing high-tech centers are usually out of the reach of laid-off workers.
The loss of those jobs last year and 30,000 in the previous four years, along with the closing of the factories that provided them, contributed greatly to the tax revenue shortage that forced Gov. Michael F. Easley to declare a fiscal emergency recently in order to close a budget gap of nearly $800 million.
Western North Carolina, though still the nation's furniture capital, lost 2,200 furniture jobs last year as imports rose and plants closed. More than 13,000 textile workers were laid off when big plants shut, three in Greensboro alone, and today there are fewer than half the 400,000 textile and apparel jobs that dominated North Carolina employment in 1980.
Becoming more vulnerable
The erosion of its base has made the state all the more vulnerable as the national economy begins to slow, economists say, and in that sense it may offer an early warning signal to the rest of the country.
"North Carolina has been losing manufacturing jobs for a long time, but up to now it has also been able to create new jobs," said Patrick J. Conway, an economics professor at the University of North Carolina. "What's worrisome about this new downturn is that the new sectors are not able to absorb those losses anymore. People who might have moved to the new jobs before will now have to sit longer and train harder and probably drive farther."
Here in Mooresville, a town of 17,000 half an hour north of Charlotte on Interstate 77, Burlington Industries laid off 600 people in 1999 when it closed a huge denim plant.
In the last few months, the town has also lost a mobile-home factory and a truck-parts supplier.
Even its economic prize - the racing car manufacturing industry, which was recruited here to replace textiles and now employs 1,400 people - is starting to suffer: about 15 of 65 Nascar teams here have shut their doors in the last six months, and many of the others are worried as the slowdown begins to hurt the corporate sponsors whose logos festoon the cars.
As melancholy tourists milled around the area over the last few weeks mourning the death of the racing star Dale Earnhardt, who lived outside Mooresville, many of the team owners expressed concern that the economic slowdown's effect on Nascar could hurt the town. "If the racing industry gets hit like I think it's going to get hit, it will devastate this area," said Don Miller, president of Penske Racing, where a flag drooped at half-staff across the street from the North Carolina Auto Racing Hall of Fame. "Racing is one of the first things the sponsors cut when hard times come. There's two or three more teams that are on the ropes now, and every one of us can see it coming."
Union shops not welcome
The unionized heavy industry of the Upper Midwest never took root in North Carolina. Instead, the state became the South's most industrialized through thousands of low-wage, low-skill jobs like those in textile mills. In some ways, it actually preferred such jobs to those that paid better; in 1990, a group of business leaders told United Airlines not to build a maintenance plant that would have added 5,000 high-paying jobs to the state, because its union shop would not be welcome. The airline instead built in Indianapolis.
North Carolina thrived in the 1980s: as factories in Ohio and Indiana closed, many workers moved South to take nonunion jobs at less than half of what they had been paid. But global competition eventually caught up with the state's manufacturing advantage, and seized it.