Jobs gains high in East Tennessee, losses in West

Associated Press • Jan 1, 2009 at 12:00 AM

SHELBYVILLE, Tenn. — Dozens of companies in 2008 expanded or launched launch new projects in East Tennessee, leaving West Tennessee dry with high unemployment rates. Experts say the employment shift is just a phase of the recession.

The pain is also being felt in Middle Tennessee’s Shelbyville, which is losing ink as a major center for manufacturing writing instruments.

Just four years after the city dubbed itself “Sharpieville” because of its Sharpie pen manufacturing plant, parent company Newell Rubbermaid Inc. announced it was moving the plant and its 300 employees to Maryville to improve efficiency.

“I would have never thought Sharpie would leave Shelbyville,” said Shelbyville Beford County Chamber of Commerce CEO Walt Wood, whose business cards are Sharpie permanent markers imprinted with his information.

“Generations of folks here have working in the writing instruments industry and it is just a devastating situation. The recession in this town has affected every business in this town.”

The Tennessee Department of Economic and Community Development reported that 15,432 new projects and expansions were announced in 2008, bringing more than $3.7 billion capital investment to the state.

The majority of the employment opportunities were in East Tennessee, where some 41 projects and expansions were predicted to create at least 5,939 jobs.

About 60 percent are in manufacturing, including the state’s biggest score: a $1 billion Volkswagen assembly plant to be built in Chattanooga that is expected to create 2,000 direct jobs.

Middle Tennessee will see 56 projects creating 5,813 jobs. The second largest project the department announced this year was the expansion of Averett Express Inc. to create 1,250 jobs in Cookeville.

Although West Tennessee expects 59 projects, they will bring only 3,680 new jobs to the area with Hemlock Semiconductor’s new plant and the expansion of Goodyear Tire and Rubber Company.

This year at least 18,113 Tennesseans have lost their jobs, as reported to the state, mostly through closures and mass layoffs at manufacturing plants, according to the state Dislocated Worker Unit.

Memphis’ Shelby County has fielded the most layoffs with at least 2,129 people displaced from their jobs. Middle Tennessee’s Perry County has the highest unemployment rate at 18.8 percent.

Even though the data are troubling, some experts said they don’t indicate a long-term trend for the entire state or competition among its Grand Divisions.

“What Tennessee is seeing is the effect of recessions more than it is a trend growth,” said William F. Fox, director of the University of Tennessee Center for Economic Research. “That may have nothing to do with the long-term attractiveness of an area. Research and surveys show that labor force and access to input and output markets are what drive these decisions.”

Companies are attracted to or driven from areas by the aging of existing factories, the need for retrofitting, in lieu of tax agreements and the economic performance of an area.

Fox said when looking at Metropolitan Statistical Areas, there have been some gains in Kingsport, Jackson and Johnson City and big losses in Memphis and Clarksville.

The Tennessee Business and Economic Outlook for Fall 2008 predicts the state’s unemployment rate will rise to 8.3 percent in 2009, the highest unemployment rate since the recession of 1982, and “remain stubbornly high through 2010” amid the state’s slow expansion.

Areas that have suffered setbacks are regrouping for 2009. Wood’s mission in Shelbyville is now trying to retain businesses and help them expand.

Beford County joined 13 other counties to form the Middle Tennessee Marketing Region to increase their competitiveness and attract industries through regional marketing campaigns and work force analysis.

The partnership has received a $50,000 federal grant from Rural Development Services to help lure industries to southern Middle Tennessee. Wood said MTM has begun talks with companies, but declined to disclose their names.

A September study by Middle Tennessee State University’s Business and Economic Research Center recommended pursuing the auto industry, metal manufacturing, precision instruments and agricultural businesses.

The study also says high levels of unemployment provide an available work force for industry development and expansion.

“We are not sitting still in the face of the recession,” Wood said. “We have made a proactive effort to get out and talk to businesses. We have got to get companies looking us in this part of the state.”

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