Manufacturing jobs make comeback in TN

7:44 AM, Aug 20, 2010   |    comments
Monica Hamby takes a test hoping to land a manufacturing job at SaarGummi in Pulaski./The Tennessean
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By G. Chambers Williams III, The Tennessean

Production lines are gearing back up, and a few more people are going back to work in manufacturing here, traditionally among the best-paying jobs in Tennessee just as the national employment picture dims again.

"We generally have seen gains this year, and while the levels are really low, the pattern is at least one of growth," said University of Tennessee economist Bill Fox.

A 2 percent increase in factory jobs statewide this year has largely been driven by a recovering auto sector, which provides the bulk of Tennessee's manufacturing work. The growth is particularly strong among small auto-parts suppliers, whose fortunes fell over the past two years as big automakers struggled with poor sales.

"Detroit getting back on its feet is good for Tennessee," said David Penn, an economist at Middle Tennessee State University. "Our auto suppliers produce not only for plants in the state, but for other states as well."

Tennessee's jobless rate was 9.8 percent for July, the state Labor Department said on Thursday. That's the lowest unemployment rate in almost a year and a half.

Tennessee's data were much brighter than a companion national report showing that first-time unemployment claims in the U.S. rose last week to 500,000 - a level worse than economists had expected.

"The recovery is clearly slowing," said Paul Ashworth, an economist at Capital Economics.

In Tennessee, though, the jobless rate has edged lower for several months and finally reached single digits. Still, some companies are holding off on permanent hires for now, and instead are giving current employees overtime hours or hiring temporary workers.

Manufacturing employees statewide worked an average of 43.2 hours a week in June, up from a recent low of 38.5 hours in January 2009, according to the Bureau of Labor Statistics. Rising hours are often viewed as a precursor to more hiring.

Temporary-employment agencies have added about 10,000 jobs during the past six months, Penn said, with many of those in manufacturing.

"I think we're just now seeing manufacturers starting to nibble at hiring permanent workers instead of temps," he said.

VW, Nissan play roles

With car sales bouncing back, some auto suppliers are hiring again, including many in Middle Tennessee, according to employment counseling experts such as Jan McKeel, executive director of the South Central Tennessee Workforce Alliance in Columbia.

"My gut feeling is that we're starting to get there," she said. "We have several companies in our area south of Nashville that have announced significant expansions."

Still, manufacturing employment here is far below its peak of 500,500 jobs reached in January 2000.

"We have lost almost 40 percent of our manufacturing employment in the past decade, but the last five or six months have been the first time in the 2000s that we've actually seen employment coming back up," Fox said. He called the fresh state data "encouraging."

Some recent growth is related to auto production that's getting ready to start at a new Volkswagen assembly plant in Chattanooga, as well as that plant's suppliers.

In Pulaski, auto supply company SaarGummi Tennessee LLC is doubling its employment to 300 workers after landing a Volkswagen contract.

In Springfield, Martinrea Fabco, which makes small parts for Nissan and the new VW plant, and Schrader Electronics, which manufactures electronic sensors for vehicles, both are hiring now, said Marla Rye, president of Workforce Essentials, a job agency serving Montgomery, Robertson and Cheatham counties.

Even Nashville-based Bridgestone Americas Tire Operations is bringing back some laid-off workers and hiring new ones, although it's moving "cautiously," said Steve Brooks, president of manufacturing operations.

The company operates commercial tire production facilities in La Vergne and in Warren County.

"We're letting the market be our guide," Brooks said. "The last thing we want to do is yank people's lives around. We are doing some hiring and have brought some people back, but it's at a measured pace."

Bright spots on horizon

Not all new factory jobs are in the auto sector.

In Springfield, companies such as Electrolux Appliances and Bath Fitters are hiring again, Rye said. Electrolux makes cooking appliances, and Bath Fitters manufactures custom tubs and shower enclosures.

GrafTech International Ltd., with plants in Columbia and Lawrenceburg, has been hiring. The company makes carbon and graphite electrodes, products that aren't linked to new vehicles.

Among new GrafTech hires is Charles Wynn, 41, of Columbia, who started work on Aug. 2.

Wynn had been out of work since January, when he was laid off by Johnson Controls Inc., a former supplier to the now-idled General Motors assembly line in Spring Hill.

"This is not an automotive job, thank goodness," Wynn said. "I think I've had enough of that for a while. I worked for a Bridgestone subsidiary before Johnson Controls and got laid off there, too."

Terry Norwood, 43, of Columbia has put in an application at GrafTech and hopes to hear something soon.

He, too, worked for a succession of auto suppliers that lost contracts and furloughed workers. Norwood said he has been unemployed since being laid off more than a year and a half ago from Pretty Products Inc., which made rubber automotive floor mats. Before that, he worked for Dura Automotive, making parts for the Saturn Vue. Production of the Vue was later shipped to Mexico.

"It's been very hard to find anything," said Norwood, who has a wife and three children, including a 10-month-old baby. "Things do seem to be picking up, but I believe a lot of companies are still a little scared to start hiring again. I'm more than ready to go back to work."

Tennessee's recovery could pick up speed in the months ahead, MTSU's Penn said.

"We're looking in the next 18 months at some major impacts on employment from new assembly plants at Volkswagen and Nissan," he said.

Volkswagen will employ about 2,000 workers directly in Chattanooga at its assembly plant, and suppliers could add about 5,000 jobs, economic studies have shown.

Nissan is building a $1 billion plant in Smyrna to make lithium-ion batteries for its new Leaf electric car. New jobs there are still more than a year away, though.

"We'll be hiring hundreds of people as we prepare to staff the battery plant, which will be in operation toward the end of 2012," said Steve Parrett, manufacturing spokesman for Nissan North America Inc.

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