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Manufacturing’s
upper end
Lynchburg area blessed with hard-to-export jobs
Related
story:
A touch of France in Lynchburg
by
John Peters
for Virginia Business
June 2003
It
might have been a scene in a James Bond movie. The giant
Russian Antonov 124 cargo jet approached Richmond International
Airport on a cold night last December after a transatlantic
flight, landed and then taxied off to a secluded area.
The huge nose cone of the red and white airplane opened
upwards. Technicians started unloading the cargo —
a nuclear reactor component built by a French firm that
is partly owned by a German conglomerate. Placed on
a heavy-duty trailer with 40 wheels, the component was
driven off into the darkness. The destination: Dominion’s
North Anna Nuclear Power Station near Mineral.
One
can be forgiven for thinking that this nocturnal operation
was planned in Paris, Frankfurt or even Moscow. Fact
is, it came together in Lynchburg, in the heart of Region
2000, an area better known for its rolling hills and
televangelist Jerry Falwell. Yet the flight of the reactor
component underscores a fact of life in the area, which
includes Lynchburg and five neighboring localities —
the counties of Campbell, Amherst, Bedford, and Appomattox
and the town of Altavista. The region is a true power
when it comes to higher-end manufacturing.
In
fact, Region 2000 is something of an anomaly among Virginia’s
manufacturing centers. Southside’s textile, furniture
and apparel industries have been ravaged by competition
from foreign spots such as Mexico, Guatemala and China.
Martinsville, a textile town in the heart of Southside,
has an unemployment rate of 15 percent, the second highest
in the state and about three times as high as Lynchburg’s.
By
contrast Region 2000, named for the 2,000 square miles
the economic district covers, has more than held its
own. Indeed, two of its larger industries — Framatome
ANP and BWX Technologies Inc. — are gearing up
to recruit new workers. Neither firm will say exactly
how many they need, but the push is on because their
work force is aging and demand for their services is
growing. The Lynchburg area is known for other higher-end
industries, too, such as wireless telecommunication,
food processing, shoemaking and pharmaceuticals. Not
all has been bright, however. Two years ago, Swedish
telecom Ericsson closed its cellular telephone plant
in Lynchburg, shedding nearly 3,000 jobs.
At
the moment, the star of Region 2000 is the nuclear industry,
which is enjoying its first big spurt of activity in
nearly three decades. As licenses start expiring for
aging commercial nuclear reactors, nuclear service firms
are flooded with orders to upgrade nuclear power plants
so they can be re-licensed.
One
global leader is Framatome, a firm owned by the German
Siemens company and the French government, with international
headquarters just outside Paris. It services and repairs
nuclear reactors. Framatome, the firm that orchestrated
the Russian delivery of a nuclear reactor component
last winter, has its North American headquarters in
Lynchburg where it maintains several corporate, manufacturing
and training facilities.
Busy
Framatome has also been on a buying spree, recently
acquiring Duke Energy’s Engineering and Services
division and the Washington Group International Inc.’s
Equipment and Services division. The latter makes nuclear
fuel handling systems for 60 percent of America’s
nuclear plants as well as a number of other plants around
the world. To help meet demand, Framatome has opened
a $4 million training facility at one of its three Lynchburg
sites. “Over the next decade, there will be an
additional 10,000 megawatts of electricity capacity
(at nuclear plants), just with upgrading equipment and
increasing efficiencies,” says Framatome’s
spokesman Tommy Smith. “We’re a very big part
of that.” In mid-May, the firm announced a $32
million local expansion that will create 300 jobs.
Another
player in the nuclear field, albeit far more secretive,
is BWX Technologies Inc., owned by McDermott of New
Orleans. At a highly secure facility protected by machine-gun-toting
guards, BWXT makes nuclear fuel assemblies for Navy
warships, especially submarines. Its facility to the
east of Lynchburg is likely to get a boost since the
war against terrorism and the conquest of Iraq has spurred
defense spending. BWXT also has worked with the U.S.
Department of Energy and other federal agencies.
Yet
both Framatome and BWXT, along with other Region 2000
high-end manufacturers such as M/A-COM, a radio maker,
are facing considerable work force challenges and are
taking steps to solve them. A good part of the area’s
skilled work force is approaching retirement age. Training
is essential to provide a pool of qualified workers
whose jobs can’t be easily exported, such as ones
in the furniture or apparel industries.
Mindful
of the challenges, the firms are partnering with local
educational institutions to recruit and train new workers.
In fact, some programs pay salaries up to $24,000 a
year to recent high school graduates as they participate
in special 28-month-long training programs at the Central
Virginia Community College and other facilities.
Framatome,
for instance, has begun a program with CVCC in which
it recruits high school graduates who enter the college’s
program to earn an associate’s degree in applied
science in nuclear technology — a one-of-a-kind
program in Virginia. Not only does Framatome pay the
school bills, but it takes the students on as full-time
employees, with salary and benefits. The students spend
three months in school, then three months on the job
— traveling wherever the firm has jobs. Off site
stints can take them to jobs in New Mexico, California
or New Jersey for as long as three months.
Another
benefit is that “we get to show high school students
that there is a future here in manufacturing,”
says Stan Shoun, a retired Navy engineering officer
who now oversees most of the industrial training programs
at the college. “Even if a student doesn’t
get a job at Framatome, the worst that happens is that
he gets a free education,” he says.
The
program does have its demands. To study in either the
Framatome or BWXT programs, students must go through
personal security checks even if they are still in high
school. While they are in the programs, any serious
infraction, such as a conviction for drunk driving,
can get them booted out and they must pay back some
of the costs. But the rewards are great. “We basically
build them a career and hand it to them,” says
Shoun.
Besides
CVCC, another operation, the Advanced Manufacturing
Technology Association, a not-for-profit industry training
and recruiting organization started by manufacturers
in the region, has a program unlike any in the state
to train workers for the various industries in the area.
“We want to influence young people, show them that
jobs exist in the manufacturing area, and we’re
not talking $5- to $6-an-hour jobs. We’re talking
$12- to $25-an-hour jobs,” says John Mastroianni,
spokesman for the association.
Those
programs include using advanced machinery. “A company
will put a new piece of equipment in here, leave it
for six months, then take it out and replace it with
something newer,” Mastroianni said.
Another aspect of the association’s mission, says
Mastroianni, is to provide on-the-job training. “If
you’re a company sending an employee to (computer
numerically controlled) training, only about a dozen
centers in the nation can do that training, and it will
cost $5,000 to $6,000 for one employee. Here, we can
train 25 employees for that (amount).”
Another
manufacturer utilizing training programs at the community
college is M/A-COM. Born out of the local demise of
Ericsson, the firm makes land radios used by agencies
such as police departments, the military and some private
firms such as American Electric Power Co. The college
teaches students to build the radios — a skill
so needed the firm actually pays not only the cost of
going to school, but a salary to the student, starting
at $9 an hour in the first year and climbing to $12.25
by the third year. If the student makes it through the
program and M/A-COM takes him on full time, the student
begins work at a starting salary of $30,000 a year.
Twenty-year-old
Dan Arthur of Bedford was one of the first students
to enroll in the program. Now in his second year, he
says he spends three days a week at school, and the
other two days working at M/A-COM — getting paid
as a full-time employee for part-time work. “It’s
pretty good getting paid while you train. I hope they
take me on full time,” says Arthur.
Even
so, the region has taken its lumps. Ericsson, a cell
phone manufacturer, landed in Lynchburg in 1989, heralding
the start of the new economy in Region 2000. Within
a decade the company had invested tens of millions of
dollars in Lynchburg and employed 3,000 people in high-paying
jobs. By the end of 2000 the firm had closed shop, packing
for the hoped-for cost savings of putting plants in
Mexico and Brazil. Unemployment swelled from an enviable
1.9 percent in 1999 to 6.3 percent a year ago before
dropping to about 5.0 percent in March.
The
rebound is likely to pick up speed. Framatome says it
is close to announcing a major expansion. SCI Systems
Inc., an Alabama-based company that built plastic phone
casings for Ericsson, is picking up more of Ericsson’s
former employees.
To
be sure, there are questions and challenges ahead. Furniture
and textile jobs still in the region are on a precarious
perch. But with BWXT and Framatome leading the way,
Region 2000 has a leg up. They not only must keep jobs
in the region, but recruit and train enough workers
to fill more of them.
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