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Chattanooga: Workers feel economic pinch

By: Ben Benton
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By: Dave Flessner
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By: Mike O'Neal
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Howell Moss
Al Scruggs

Staff Photo by Tim Barber
Day-shift workers leave the Shaw no. 76 flooring plant on Thursday in Trenton, Ga., following news that the plant is closing in three-to-four weeks. The Trenton plant employs over 400 people.

TRENTON, Ga. — The housing slump that has battered Wall Street spread to Chattanooga’s manufacturing-based economy Thursday when the biggest factories in both Dade County, Ga., and Sequatchie County, Tenn., announced plans to close before the end of the year.

Combined with another mill closing in Fort Oglethorpe and a business cutback in Chattanooga announced earlier this week, more than 1,000 manufacturing jobs soon will be lost in metropolitan Chattanooga.

“It’s hard on all of us, but we understand that the economy is bad and I’m afraid it’s probably going to get worse before it gets better,” said Demarias Spivey, a 39-year employee at the Trenton Spinning Mills plant in Dade County who will lose her job in early December. “I want to get another job, but I guess I’ve just got to put it in the Lord’s hands.”

She is among 440 employees who learned Thursday that Shaw Industries is closing its second area spinning mill this year. The carpet giant, which closed a similar 400-employee spinning mill in Stevenson, Ala., in June, will start phasing out production in Trenton in November.

Shaw Human Resources director Al Scruggs said the slowing economy and the shift away from the type of carpet yarn made in Trenton forced the closing of the 40-year-old plant.

“Obviously, the economic slowdown is affecting all of our operations, but there also have been changes in our industry, and we simply have too much spinning yard capacity,” he said.

In June, Shaw cut 50 of 510 jobs at its plant in LaFayette, Ga.

Twenty miles to the north of Trenton, another manufacturer also announced plans Thursday to close a plant because of the slowing economy. Tecumseh Power Co. will start shutting down its Dunlap, Tenn., facility in early December, idling about 180 workers by early April.

The Dunlap plant makes small engines for companies such as MTD, Toro and Lawn-Boy, as well as engines for snow blowers and electric generators, company officials said.

Tecumseh, which once employed as many as 600 workers, was called one of the top catches in the region when it came to Sequatchie County almost 20 years ago. The plant added 200 jobs two years ago and started a second shift when Tecumseh’s Corinth, Miss., plant closed. But the second line was later discontinued.

Sequatchie County Executive Michael Hudson said job loss trends seen across the nation have come home.

“With unemployment up across the nation and the state, it really affects a small community like Sequatchie County when you lose close to 200 jobs,” he said.

Marion County, Tenn., is sandwiched between Dunlap and Trenton, and County Mayor Howell Moss said the loss of more than 600 jobs will hurt families in his community.

“We’ve all been running around kind of worried but feeling kind of good, too, because it has not impacted us,” he said. “But it’s bound to at some point. And I guess it’s here.”

Thursday’s announcement of plant closings by Shaw and Tecumseh came a day after Arcade Marketing announced it was closing part of its Chattanooga plant and cutting about 150 jobs. The company is one of the leading makers of scratch-and-sniff inserts in magazines.

Carpet Casualties

The economic slowdown is unraveling thousands of carpet and textile industry jobs as housing starts fall and the credit crisis curbs consumer and business spending.

Jim Bethel, president of J&J Carpet in Dalton, Ga., and a former chairman of the Dalton-based Carpet and Rug Institute, said the current slump could be one of the longest ever for the carpet industry.

“We’ve seen similar declines before, but what worries me about this downturn is how prolonged it may be,” the 30-year industry veteran said, noting that carpet sales already have been down for the past two years.

In Northwest Georgia, more than 40,000 jobs are directly or indirectly tied to the carpet industry. But productivity gains are cutting that number by about 800 jobs a year and the current economic slump has vastly expanded the cutbacks.

Mohawk Industries, one of the world’s largest floor-covering companies, announced on Sept. 30 that it will close its mill in Fort Oglethorpe by the end of November, cutting 236 jobs.

On Thursday, Chattanooga-based Dixie Group announced plans to close its plant in Eton, Ga., and consolidate that production with another plant in Atmore, Ala. It also will consolidate the company’s tufting and custom rug operations on the West Coast and additional staff cuts are being studied, company President Dan Frierson said.

“We are disappointed that residential carpet markets have continued to weaken and commercial carpet sales have declined faster than anticipated,” Mr. Frierson said. “As a result, we expect to report a loss from continuing operations for the third quarter, which will result in earnings well below current analyst estimates.”

Data provided by the Georgia Department of Labor show 2,700 jobs in textile production mills were lost between August 2007 and August 2008, which is 7.2 percent of jobs statewide in the industry but does not include the total of 676 jobs lost with the Shaw and Mohawk closings.

Job Losses spread

Shaw’s closing of the Trenton mill surprised Peter Cervelli, the chairman of the Dade Industrial Authority who had been working to help keep the plant open.

“Our attorney and Shaw attorneys had a conference call scheduled today to make final plans for providing tax relief for the plant,” he said. “Getting the call (regarding the closure) this morning was a surprise and a disappointment.”

Displaced workers said it will be hard to find jobs that pay as well as Shaw.

“I just bought a house in Chattanooga, so it’s real discouraging,” said Christian Pilotzi, a 23-year veteran of the textile industry who was hired by Shaw in 2007. “There aren’t a lot of businesses hiring now, but I got to find another job.”

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