Middle Age Waistline

Friday, September 03, 2004

Our Little Town

I live in Kingsport, Tennessee. It is on the edge of dying.

Of the communities in our area, it is led politically by people with a startling lack of vision and a resolute inability to provide anything of interest to progressive, farsighted businesses. People here don't just resist change; they belive that change is the work of Satan.

Gets so you'd love to hear some good news. I heard some just yesterday! Yesterday I heard from the ONLY business in Kingsport reporting a banner year and near-record profits.

Our Rotary club was addressed by an executive from BAE systems, which is a British company that operates Holston Army Ammunition Plant. We're not supposed to talk about it, but they make C5 explosives, among other things. One of the speaker's PowerPoint charts showed that the tonnage of explosives had been projected to be less than one this past year but, due to Iraq and Afghanistan, it exceeded ten tons. It caused the parent company to scramble to upgrade the physical plant and actually hire some staff (after having laid off many; the headcount is now only about 15% less then when they took over).

So war has been good to us. If it were not for war, we would not have even this little bit of good news....

o Kingsport Press was taken over by a Canadian company, its assets reduced, employees laid off, and operations virtually shut down.

o Willamette Paper took over a local paper mill and, to their credit, recapitalized a badly faded plant and are doing well - after a round of layoffs.

o The largest employer in town, Eastman Chemical, recently sold off an operating division [located elsewhere] and posted record profits. So, I'm waiting for them to take all that profit and rehabilitate and revitalize its decaying physical plant. I know they will; I know they won't open operations in Mexico or China or India and shut down the local operation which once provided work for 25,000 and now sustains 11,000 [CORRECTION: 7,500] of my neighbors. They won't do that, even if it means increased long-term profitability due to incredibly lower costs per labor hour. In fact, I'm so sure of it, I will hold my breath until they sink some serious bucks into Kingsport...

If you don't hear from me, would you send someone over to resuscitate?

Anyway, back to the good news. The explosives maker said that before this recent recapitalization, every single bit of their explosives they made had been shoveled by hand. That absolutely staggered me. I can see this plant out of the window I'm sitting next to right now. Until 4 years ago, workers shoveled extremely high velocity explosives, as much as ten tons' worth, entirely by hand, about six Chicago blocks from where I write this.

Makes ya think.

Those stoker guys were probably among the first ones laid off. Hugely to their credit, there were no incidents of worker violence. Here in East Tennessee, violence is not caused by a rebellious attitude toward your employer, I guess. We get domestic violence, we get vehicular death, we get fights in bars...but nobody around here goes postal, it seems. People here are respectful and righteous. I admire that a lot.

If Eastman announces that they are opening a new facility in a foreign land, and shutting this one down, causing over ten thousand people to lose their jobs (in addition to the ten thousand plus that dribbled away since the 1960s), there will be no protests, no riots, no trouble at all except maybe a few people getting drunk and beating their spouses and children.

That's the way people here are. It reminds me so much of the song that ended Robert Altman's film, "Nashville."

If only we could figure out how to become irresistable to successful, progressive businesses. If we could, I can tell you there are some first-rate, committed people ready to work. Could almost guarantee that they won't shoot you.

3 Comments:

  • At Fri Sep 03, 02:13:00 PM PDT, Anonymous Anonymous said…

    Spooky - here's what was in the Kingsport paper today. Note references to Kingsport and Eastman's 7500 employees there:

    "Eastman building $100 million PET plant in South Carolina"
    Friday, September 03, 2004

    By SHARON CASKEY HAYES
    Times-News

    KINGSPORT - After several years of downsizing operations and employees, Eastman Chemical Co. announced Thursday it is ready to grow once more and is focused on several product opportunities to boost the company's bottom line.

    Speaking at Eastman Investors Day in New York, Eastman Chairman and Chief Executive Officer Brian Ferguson said the company is focusing on a strategy to build on its strengths in polyester, acetyl and organic chemistry technologies.

    As part of its new focus, the company announced it has discovered breakthrough technology to produce PET for plastic packaging and plans to invest $100 million in a new PET plant and supporting infrastructure at Eastman's Voridian Division in Columbia, S.C.

    Ferguson said the new IntegRex technology will allow the company to produce PET more efficiently to meet growing demand.

    Allan Rothwell, Eastman executive vice president and president of the company's Voridian Division, said the new technology "gives Eastman a competitive advantage in a growing global market with sustainable returns above the cost of capital."

    "Our goal is to help our customers grow by providing them with a reliable supply of competitively priced PET with consistent quality and delivery," Rothwell said. "With our long history in the PET business and heritage process innovation, it's only fitting that it is Eastman who is introducing what is truly a step-change technology."

    The new Columbia plant will produce 350,000 metric tons of PET a year using the new IntegRex technology. Construction is expected to begin in January 2005 and be completed by the fourth quarter of 2006.

    Between 800 and 1,000 contract jobs are expected to be created during construction in Columbia, while the project will bring about 50 permanent jobs to the city.

    On Thursday afternoon, Ferguson told the Times-News that Eastman's new strategy will eventually bring more jobs to Kingsport.

    "It's going to mean very good things for Kingsport ultimately," Ferguson said.

    He said Eastman's strategy includes eight to 10 growth platforms, which are supported by parts of the company all over the world.

    "And Kingsport is a very key part of that support. Some of the growth platforms have a Kingsport special kind of a future to them, but we're not willing to talk about them in detail right now. It's going to be a combination of professional and other jobs that we would bring in, but I don't have a number for you," Ferguson said.

    "At the end of the day, this is about growing the company, and growing the company means we need more people, and Kingsport is still 50 percent of our population, and it's a big chunk of the chemistries that we practice," Ferguson said.

    Eastman employs about 7,500 in Kingsport.

    Ferguson said the announcement of Eastman's new corporate strategy represents an end to the company's downsizing and a new beginning for growth.

    "We're starting the process of growing again after we've gone through all the painful bits of restructuring and improving our earnings," Ferguson said.

    Eastman has cut about 20 percent of its work force just this year, reducing head count from 15,000 in January to 12,000 today.

    On Thursday, Ferguson said Eastman is seeing positive results from its restructuring efforts.

    "Our operating foundation is stronger as a result of our restructuring actions and financial discipline," Ferguson said. "Our focus now will be building on this foundation and extending Eastman's expertise and know-how to market segments that offer the greatest growth potential and where we can differentiate ourselves from competitors."

     
  • At Sat Sep 04, 07:14:00 AM PDT, Anonymous Anonymous said…

    Free trade does mean that some low-wage workers in the Third World* will gain a comparative advantage over high-wage workers in the United States. The result is that hundreds of millions of people overseas who were formerly at edge of subsistence are propelled into prosperity. Seen in this light, globalization, by helping the least advantaged people on the planet, does more to achieve the principle of distributive justice that all the foreign-aid programs ever devised. Wage competition is a bad thing only if "our" workers somehow matter more, as human beings, than people in India or China. Meanwhile, efficiency gains from shifting work to the Third World* result in lower-priced goods and services for all - including those of "us" who earn less.

    Jeffrey Friendman
    Barnard College
    New York City

    ---

    * such as South Carolina

     
  • At Sat Sep 04, 07:21:00 AM PDT, Anonymous Anonymous said…

    "And Kingsport is a very key part of that support. Some of the growth platforms have a Kingsport special kind of a future to them, but we're not willing to talk about them in detail right now. It's going to be a combination of professional and other jobs that we would bring in, but I don't have a number for you," Ferguson said.

    Hah.

    Why the need for secrecy? Sounds like arrivaderci Kingsport to me...

     

Post a Comment

<< Home