Weaker economy takes toll on manufacturing

A weaker economy is starting to batter local industries. Since January, more than 4,000 jobs have been eliminated in manufacturing throughout south central Pennsylvania.

For the first time in five years, Lancaster County has seen a 1.1 percent decline in manufacturing jobs, with the largest loss of jobs 600 - coming from the combined closing of Heritage Custom Kitchens and Rutt Custom Cabinetry in Leola, according to Michele Heister, industry and business analyst for the state Department of Labor and Industry's Center for Workforce Information and Analysis.

Jobs in the apparel industry and primary metals also have been hit hard, with up to 300 positions eliminated, Heister said.

Lancaster has suffered less than the rest of the state. Statewide, there was a 2.6 percent decline in manufacturing jobs for the first six months of the year.

Since June of 2000, the Harrisburg area has lost 2,500 jobs, while York County has reduced its manufacturing work force by 800 employees, according to Wayne Schopf, analyst for the Center for Workforce Information and Analysis.

The closing of two plants in Cumberland County - Appleton Paper and the Quaker Oats Co. - accounted for the loss of 1,600 jobs. About 900 additional jobs were eliminated with the closing of a Tyco International Ltd. plant in Harrisburg. The closing of a Tyco plant in Shrewsbury also contributed to the loss of jobs in the durable goods industries of York County.

Both Heister and Schopf refrain from making any projections, but the two agree the downturn reflects current economic conditions that have led to lagging sales.

"We have definitely curtailed our operations," said Carl Cook, human resource director for Sodico, also known as Southern Die Casters, in Shrewsbury. The producer of aluminum and zinc die-castings has national customers such as Black and Decker. It began laying off employees in March. Its current workforce of 170 compares with 285 at this time last year.

There are several reasons for the cutbacks, according to Jim Panyard, director of the Pennsylvania Manufacturers Association, Harrisburg. He estimated the state has lost more than 30,000 manufacturing jobs.

The figures create concern for Panyard, who noted that, on average, no more than 10,000 jobs per year were eliminated during the previous 10 years. But, for the fourth-straight quarter, the state's manufacturing industries have experienced a slump.

Panyard said Pennsylvania is losing jobs to other states that offer more attractive economic conditions such as the socalled "right-towork" states, where employees cannot he forced to join unions to keep a job. About 25 states honor the regulation, he said.

Panyard also attributed the loss of manufacturing jobs to the business tax structure. With a Corporate Net Income tax rate of 9.99 percent, Pennsylvania ranks third-highest in the nation and stands above the national average of 7 percent.

Pennsylvania also is one of 18 states that taxes corporate worth in addition to corporate income, according to a PMA report released in June.

Another reason Pennsylvania is losing manufacturing jobs is the aging population. Many jobs held by older workers were never replaced when the workers retired. Pennsylvania has the second-oldest population in the country, next to Florida.

Some local manufacturers say they have not been affected by the weak economy.

"We're doing better than normal," said Troy Hull, vice president of Applied Electronics Inc., York, and a sister company, York Electro Mechanical Corp.

Combined business for both companies is up by 25 percent, Hull said. The company plans to hire two more workers. It now employs nine full-time workers. Hull attributed the growth to York Electro, which has doubled its sales in the past year, primarily through defense contracts.