Hagerstown turnaround

Volvo plans layoffs, but now the thriving area can shrug it off

November 02, 2006|By Jamie Smith Hopkins | Jamie Smith Hopkins,Sun reporter

HAGERSTOWN -- It's never good news when one of the best employers in town prepares to cut about 600 jobs. But in an odd way, the grim announcement at Volvo's manufacturing plant here is a sign of how far this Western Maryland community has come.

A generation ago, the reductions -- a third of the plant's work force -- would have been a devastating blow for an economy that depended heavily on a few large manufacturers. Now, officials think Hagerstown and the surrounding county of about 142,000 people can shrug it off, even if most other employers can't match Volvo's pay rates.

Hagerstown's interconnecting interstates have attracted hundreds of distribution jobs, with new employers that include FedEx Ground and Tractor Supply Co. Several thousand people work at two credit card processing firms. A Columbia real estate company is embarking on a project to redevelop a nearby closed Army base into a complex with 4,500 jobs. And hundreds if not thousands of new residents are barely touched by local economic trends because they moved west for cheaper homes and commute to Baltimore or Washington.

The unemployment rate in the Hagerstown area, which topped 9 percent 15 years ago, is averaging 4.2 percent this year -- better than the nation as a whole. Employers added 4,600 jobs in the past five years, according to federal numbers.

That is why cuts at the plant, which makes engines for Mack and Volvo trucks and transmissions for Macks, probably won't ripple dangerously into the county as previous rounds of layoffs have.

`More diversified'

"We are much more diversified than we were 15 or 20 years ago," said Tim Troxell, executive director of the Hagerstown-Washington County Economic Development Commission. "This would have really hurt the town back then."

The worst part of the reduction is not the number of jobs at stake, particularly because some of the cuts are expected to come from retirements.

It's pay.

The Volvo Powertrain North America jobs are among the best in the area for wages and benefits, drawing employees from Pennsylvania and West Virginia as well as more local communities. At $22 an hour on average, the wages are good for workers without college degrees. Even Hampton Wedlock Jr.'s children with degrees cannot beat his salary as a Volvo millwright.

"It was a blessing that I was able to get a job at Mack," said Wedlock, 51, who went to work at the plant shortly before his previous employer, a local aerospace manufacturer, closed up. (Many in town refer to the plant as Mack, its name before it was bought by the Swedish AB Volvo in 2001.)

Manufacturing jobs, long the road to the middle class for blue-collar workers, are increasingly scarce here and across the country. Nearly one in four jobs in Washington County were part of that sector in 1986. Now, it's one in seven. Bill Turner, 70, who joined Mack in 1962, soon after it opened, remembers when up to 4,700 people worked there in its heyday. The plant employs just under 1,800 today.

Josh Moats, 26, who lives in nearby Boonsboro, took a job as a Volvo technician last year even though he knew cuts were looming. It was too good an opportunity. Now he's facing the layoffs with resignation -- he doesn't know where he'll work -- and is crossing his fingers that he gets called back.

"I'd love to retire from this place when I'm 70," he said.

The company warned Hagerstown workers several years ago that federal emissions standards that kick in Jan. 1 would force layoffs. Customers who would normally have replaced trucks next year rushed to get in orders for the current, cheaper model. The company had to entice aging workers to delay retirement and hire new workers, all the while knowing that orders for its Volvo and Mack trucks would inevitably drop. The regulations will add $7,000 to $8,000 to the cost of the trucks.

Even without the new pollution standards, "the truck business is very cyclical," said Jim McNamara, a spokesman for Volvo Powertrain North America in Greensboro, N.C. "People who work in this type of job understand that there are ups and downs."

Volvo gave Hagerstown workers the bad news Friday, and the week before announced that it was cutting 450 workers at its truck assembly plant in Macungie, Pa.

UAW, the union that represents most workers at the Hagerstown plant, said the cuts will come from retirements as well as layoffs. Some will be so-called "voluntary" layoffs, in which workers with seniority agree to leave for several months, said Dave Perkins, president of Local 171 in Hagerstown.

Though the company considers its involuntary layoffs permanent, the union is optimistic. Volvo has invested $150 million in the plant over the past few years.

"We feel many of our people will probably be called back," said Perkins, who has been laid off and rehired five times since the plant took him on 33 years ago. "I suspect everyone will be recalled."

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