Tucked away in the industrial areas of Cabell and Wayne counties, off the main streets and out of the public eye, there are thousands of men and women hard at work. They make products sent around the world and help local companies thrive, keeping much-needed jobs in the Tri-State and pumping dollars into the local economy.
As far as the ripple effect goes, manufacturers are some of the beneficial companies to have located in your area, said Jerry McDonald, president of the Huntington Area Development Council.
"They pay very well and provide higher salaries, and spin-off effect is probably greater than any other sector. They subcontract, buy services," he said.
But a lot of times, you don't hear much about existing companies because they're busy working, McDonald said.
"They shy away from PR, so you don't hear about the good things they do for our economy. Most of the taxes generated in Cabell County are generated from these existing businesses."
Nationally, the number of manufacturing jobs has declined to below 10 percent of all jobs, and the Huntington area has been holding in line with that, McDonald said. According to statistics from WorkForce West Virginia from the second quarter of 2007, manufacturing jobs make up about 9.9 percent of the work force.
The three biggest manufacturers in Cabell and Wayne counties are Special Metals, which makes alloys and employs about 970 people; Alcon Research, which makes intraocular lenses for cataract surgeries and employs 660 people; and Steel of West Virginia, which employs 543 people.
They've all gone through ownership changes and made constant adjustments to their industries, market and the local business climate, but they've been strong, McDonald said.
"I feel pretty good about our top manufacturers right now," he said.
Special Metals
Special Metals has a history that goes back to 1922, when the International Nickel Co. opened its Huntington facility. It became Huntington Alloys in the 1950s, Inco Alloys in the 1980s and Special Metals in the late 1990s, before filing for Chapter 11 bankruptcy protection in 2002. Precision Castparts Corp. or Oregon acquired Special Metals in 2006, paying off its debt.
Since then, the company is back on track and growing, said Bob Hennessy, vice president and general manager at the Huntington plant.
"The acquisition by PCC has turned out to be a positive event for Special Metals," Hennessy said. "It's a manufacturing-oriented company that strives to make sure that its plants are models of excellence, and it's helped our manufacturing performance dramatically, as well as our profitability. ...Our revenue has grown well over 25 percent since that time. Some of that has been due to nickel escalation and some due to overall volume growth."
Precision Castparts spent more than $20 million in capital improvements to the Huntington plant this fiscal year, which ends March 31, and is planning more than $25 million for the next fiscal year, he said.
"One of the strengths of the Huntington plant is the legacy of employment we've had here," said Hennessy, who has been in Huntington about six years and came from Chicago.
Grandfathers, fathers, sons and daughters have worked there, along with innumerable cousins and other relatives, he said.
"It has been a legacy of employment opportunities and great careers for the people of Huntington. That's been a strength," he said.
The work ethic of the workforce is the biggest benefit of being located in Cabell County, he said, followed by the central location for Special Metals' customer base and the low utility rates.
In Hennessy's view, something that could make the business environment better for manufacturers in this area would be tax changes.
"We currently pay more than $2 million in property taxes, and there are some pieces of legislation currently that could help with that," he said. "They include things like property tax exemptions on inventory, machinery and equipment. We compete with plants in other states and countries, and it's a very competitive environment.
"We're very encouraged by recent reforms in worker's compensations laws, and we encourage that effort to continue," he added. "West Virginia doesn't compete well on that front with other states. It has improved. We're very interested in seeing that continue."
Alcon Research
Another standout manufacturer in Huntington is the local Alcon Research plant, which started out as CILCO 30 years ago. CILCO was founded in Huntington by Dr. Jim Cook.
Purchased by Switzerland-based Alcon in 1990, the plant manufactures 30,000 intraocular lenses a day, which are used during cataract surgeries.
"It's one of our shining stars as far as what they've done, and I think it's because of their workforce here in West Virginia," McDonald said. "They continue to expand and grow."
It is getting ready to celebrate its 30th year in Huntington and will have a special celebration in the fall. Last year, it completed a 35,000-square-foot expansion of its plant and created room in its office building for a new Wellness Center.
Alcon also is proud to be an employer for the area, said Jim Baden, vice president and general manager of Alcon Huntington.
"Our success is certainly our employees' success. Contributing to the local economy is a wonderful byproduct of our primary mission of restoring sight," he said. "Alcon's status as one of the '100 Best Companies to Work For' (as designated by Fortune magazine over the past 10 years) is as much about culture as about the concrete benefits our employees enjoy, and we are fortunate that we have a culture in our facility and in our community that is conducive to having pride in one's product and being a part of a cutting-edge industry."
He too praised the quality workforce in the area.
"We are confident that our employment needs for direct labor can be satisfied here locally. We are also very fortunate to have access to the resources of Marshall University in our community," Baden said.
"We need to continue to strengthen the infrastructure and to look for ways to bring more people to the community. Ease of access to the area and transportation options to and from Huntington must continue to be pursued."
Bringing in alternate air carriers and travel options, like direct flights, are strides in that direction, he said.
"Our legislators need to continue to enact business-attractive legislation that will promote the message that West Virginia is truly 'business friendly.' We must find ways to provide a strong economic base to support opportunities to make it attractive for young people to remain in the area."
Steel of West Virginia
The other major manufacturers in the area are making strides as well.
Steel of West Virginia, located along the Ohio River in Huntington, recently announced $24 million in capital improvements.
"The investment includes upgrades to rolling mills, steel making and fabricating equipment," President Tim Duke said. "It will improve product quality, increase efficiency and expand our product offerings. That will help us maintain our position in the marketplace as a quality supplier of special steel products."
Steel of West Virginia is proud that it has been a steady employer in the area over the past century, with very little attrition.
"People retire, but we have little turnover," Duke said. "People come here and like working here."
The company takes scrap steel and makes more than 300,000 tons of products a year, he said, including cross members for floor joists for van trailers. It also makes parts for fork lifts, guard rail posts, rails that go into coal mines and many other custom steel products.
"We ship 7 percent internationally," he said.
The company started producing steel in 1909 with fewer than 30 employees, operated until 1956 by the Schonthal family. The plant was then owned by H.K. Porter until 1982, when it closed temporarily but local, private investors purchased the property that year. In 1998, the company became a subsidiary of Roanoke Electric Steel Corp., until 2006 when Steel Dynamics Inc. purchased Roanoke Steel.
Holding on
Lawrence County, Ohio, doesn't have manufacturers as large as those in Cabell and Wayne counties, but its success stories include Leibert Industries, which makes compressors for air conditioners that get shipped around the world, and Engines Inc., which makes railroad car parts, said Bill Dingus, executive director of the Lawrence County Economic Development Corp. He also mentioned Dow Chemical and Duke Energy, among others.
Such businesses are priceless because of the great jobs they provide and the spin-off of their services, he said. Leibert uses Tri-State Airport to ship out its goods, and others "bring tens of millions of dollars in investments -- machinery, installation, the various kinds of support and utilities," Dingus said. "When you invest millions and millions of dollars, those people aren't going to up and leave, but they're going to be slow to come because they want to make sure it's the right community."
Keeping local manufacturers healthy and happy is an ongoing process, McDonald said.
In the course of a year, HADCO will probably meet with 100 of the major companies in Cabell and Wayne counties and talk about how they're doing and factors that might be inhibiting their growth.
"We meet with them to kind of check their temperature, see how they're doing and try to facilitate things," he said.
The group had just met with SNE Enterprises in August, and things were going well. Then the bottom fell out of the sub-prime housing market in states like Florida and Arizona.
With about 325 employees, Peachtree companies has been the fifth-largest manufacturer in Cabell and Wayne counties, behind Heiner's Bakery. But its subsidiary, SNE Enterprises, has announced it will halt operations in Huntington by May 15. It manufactures vinyl windows and patio doors.
HADCO, as well as local government officials and state business development workers, met with SNE management to see if anything could be done to keep the Huntington operation alive. It turned out that there couldn't, McDonald said.
"They were very happy with their building and workforce here, but it so happens that it's beyond the community's control and the company's control that they are affected by the sub-prime housing market. ... We asked if there was anything we could do, barring the housing situation, and there was nothing."
Sometimes HADCO can help out, perhaps by facilitating training for the workers or helping a business work out a feasible expansion plan. The Huntington Regional Chamber of Commerce lobbies toward policy changes that help businesses, such as the recent changes to worker's compensation.
HADCO talks with and takes the pulse of businesses yearly and has kept track of their concerns. Based on HADCO's conversations with local businesses in 2000, the top concerns for them were:
- Worker's compensation
- Air service
- Basic skills
- Business taxes
- Attendance
These are based on anecdotal evidence only, McDonald pointed out. And based on conversations with the 100 or so businesses that HADCO met and talked with in 2007, the concerns have changed. Last year, the biggest concerns were:
- Basic skills
- Employees passing drug tests
- Business taxes
- Technical skills
- Air service
The good news, McDonald said, is that "All the things on that list can be changed. Workers comp -- it's not even mentioned (on the most recent list). It used to always be mentioned."
Air service worked its way down the list because it has improved, he said.
The drug testing is a new concern that employers have mentioned.
"If you can't pass a drug test, they're not going to have you stand in front of a machine that has a big blade coming down," McDonald said. "My hope is that the drug problem next year won't be on the list."
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