by Peter Galuszka

In the secretive, deal-making world of economic development, Wayne Sterling is regarded as a superstar. By turns, he's been compared to sports luminaries Joe Montana, Barry Bonds and Michael Jordan. His record for nailing big projects is legendary. In South Carolina during the early 1990s, for example, he snatched a shiny jewel, the $350 million Bayerische Motoren Werke Inc. (BMW) car factory. Later, in the mid-1990s, when he was Virginia's top business scout, he brought in computer chipmakers Dominion Semiconductor and Infineon. In 1997, South Carolina leapt at the chance to lure him back.

So, when Sterling landed on the job market again last summer, officials of hard-hit Henry County went after him in a big way. The small, economically depressed county offered him an incredible $200,000 a year. The princely sum raised eyebrows since Henry County is located in the center of the state's foundering Southside textile belt area where thousands of people don't even have jobs. By comparison, wealthy Henrico County in suburban Richmond pays $130,161 a year for a similar economic development post. "I like Henry County," says Sterling. "I knew some of the leadership. They made me a very good offer. It is a very interesting opportunity, and the timing worked the way I liked."

The timing is indeed fortuitous. Last September, Sterling was forced to resign as chief of staff of the South Carolina Commerce Department, following a probe into alleged financial improprieties. Among the allegations: Sterling allowed his staff to hire relatives, charged up to $28,000 to give speeches as a public official, billed the state for expensive golf getaways and furnished his offices lavishly. He and an associate who went with him to Henry County are still the targets of a probe by a South Carolina state audit committee. Sterling didn't respond to questions about the probe.

Officials in Henry County and Martinsville, its major city, defend the hire. "Well, the Washington Wizards wanted Michael Jordan," says Thomas L. Harned, city director of economic development. Harned declines comment on Sterling's situation in South Carolina. "The fact is that Mr. Sterling is one of the preeminent industrial recruiters in the country. We need the very best available."

Henry County does need help. Since 1993 the county, with a population of 60,000, has lost 9,000 apparel and textile jobs. Furniture, its other major business, is reeling from recessionary blows. A major apparel firm, Tultex Corp., shut down in 2000. Last November, apparel maker VF Corp. announced that 2,600 workers would lose their jobs as it moved to close three of its four clothing factories there.

As executive director of the Virginia Economic Development Partnership before his second stint in South Carolina, Sterling pursued a research-oriented approach to recruiting business. As he said on more than one occasion, he wanted to know more about the prospect's relocation needs than the prospect itself. Perhaps his most lasting legacy at the partnership was creating a state-of-the-art presentation room that could manipulate a vast database of location data and display it on a wall-size screen.

For Henry County, he says he plans a "very aggressive outreach program" that will extend to U.S. cities and abroad. He says that the skills of apparel, textile and furniture workers are "easily transferable" into other manufacturing industries. The trick, he says, is to "focus on what the market tells us every day." While he says there is no such thing as an ideal economic prospect, his recruitment will be tailored to find businesses that provide "stable and long-term employment."

Doing so is no mean feat. With the North American Free Trade Agreement in place, it is much easier for major textile and apparel firms to move their operations to Mexico and its low-cost labor. Now that China is in the World Trade Organization, it will enjoy trade privileges that will make it easier to swamp U.S. markets with cheaper and well-made products. Thus, the clothing sector offers little hope for the future.

Consider VF Imagewear, a unit of Greensboro, N.C.-based VF Corp., that announced the latest round of layoffs. The downsizing is part of a corporate-wide strategy of losing 38,000 jobs and restructuring to meet tougher market conditions. VF Imagewear communications director Sheryl Agee says VF was forced out of the private label business, where it made clothes for big name retailers such as Nike, J.C. Penney, the Gap and Target. By taking production offshore, she says, "They can manage a lot cheaper costs and deal with intense pricing pressure."

VF is trying to ease the pain by offering laid-off employees severance packages. The NAFTA agreement pays tuition for laid off workers to study at community colleges for up to two years and learn new skills. The problem is, there aren't enough jobs locally to train for. Deborah Preston, a VF worker due for lay off in April, says her husband lost his job at VF in November. He's now at Patrick Henry Community College studying law enforcement, even though there aren't many suitable jobs nearby.

Many laid-off workers must commute one hour each way to big cities such as Roanoke or Greensboro, N.C. "The problem is, that once laid-off people find work in North Carolina, they often find themselves laid off again," says Gary Shoesmith, a professor and economist at the Babcock School of Management at Wake Forest University in Winston-Salem, N.C. He notes that a North Carolina newspaper published an extensive study of laid-off textile workers. One third found better jobs; one third found lateral jobs and a third found worse jobs or are still unemployed.

Martinsville economic development officials say that their people do have extensive skill sets, such as knowing how to operate complicated machinery. They are hoping that high-technology firms will locate production facilities in their area (see story, page 20). But high-tech manufacturing is in a recessionary slump and may not be expanding for months to come.

Last month, Henry County officials announced some good news. Two furniture makers, A.C. Furniture and Carolina Quality Compounds, would open two new plants and hire 115 workers. While the deals started being made before Sterling's arrival, he's getting the credit for closing them quickly. But, county officials concede, the jobs are a drop in the bucket compared to the extensive layoffs in other sectors. They had better hope that Sterling can work his highly touted and highly compensated magic.