Deja Vue

[hoborich]

Seems like we've been down this road before.

Plant's closing dealt blow to many, but local leaders see rebound in works
Ryan Bentley (231) 439-9342rbentley@petoskeynews.com Mar 10, 2016 (0)
Plant's closing dealt blow to many, but local leaders see rebound in works
Arielle Breen/Herald Times
This was once the space of nearly constant activity, but now the former Georgia-Pacific space is barren and quiet.
Plant's closing dealt blow to many, but local leaders see rebound in works

A fence stands with a warning at the former Georgia-Pacific campus. The longtime plant’s closure was a distinct economic hit to the region, but officials say the local economy is diverse and is bouncing back.
GAYLORD —

Along with the 200-plus Georgia-Pacific employees whose jobs were eliminated in the company’s 2006 Gaylord plant closure, community leaders recall the shutdown had farther reaching economic impacts in and around Otsego County.

And while the mid- to late-2000s brought a local economic downturn involving more than just the factory’s end, those leaders say they’ve seen the community gradually move onto a recovery path.

Described as the largest particle board plant east of the Mississippi River when built in the mid-1960s for U.S. Plywood, Gaylord Area Chamber of Commerce executive director Paul Beachnau noted employment at the Bagley Township factory already had been on the decrease from a peak of about 400 when G-P announced the closure.

The local economy’s diverse status — with tourism, distribution, retail and oil and gas production businesses all playing a part along with manufacturing — likely helped mitigate the shutdown’s impacts, Beachnau said. At the same time, he noted that the jobs lost — hourly pay at Georgia-Pacific typically fell in the $15-20 range — were among the community’s stronger ones in terms of purchasing power.

“It wasn’t as severe as I suppose it could have been if we were a one-company town, but the caliber of the jobs tended to be on the upper end of the spectrum with full benefits,” Beachnau said.

Community leaders noted the closing had impacts for other area businesses and their employees as well — from local forest products companies furnishing the plant with raw materials to transportation companies hauling goods to and from the plant.

“Georgia-Pacific had approximately 155 suppliers and vendors that were impacted by the closure,” said Lisa McComb, executive director of the Otsego County Economic Alliance.

Along with the loss of $8 million in annual wages that had been paid directly to G-P employees, McComb noted there was an estimated secondary impact of $4 million annually on other area wages.

Further implications for the local jobs picture came about a year after Georgia-Pacific’s shutdown, with Kimball Electronics Group beginning a closure of its Gaylord circuit board factory with a similarly sized workforce.

“Although (Georgia-Pacific) had a dramatic effect on employment in Gaylord in 2006, it was the combination of the G-P closing in 2006 and the Kimball Electronics Group closing in 2007 where another 214 employees lost their jobs unexpectedly that really hit the area,” McComb said.

For 2005, the year prior to G-P’s closing, Otsego County’s unemployment rate stood at 7.1 percent. The annual jobless figure moved up to 8.5 percent in 2006. The rate continued to climb as economic conditions took a turn for the worse nationally, hitting 14.7 percent in 2009 before beginning a gradual decrease. For 2015, preliminary figures show Otsego’s annual jobless rate at 6 percent.

“It took quite some time to repair and replace and get more jobs into our community that could make up for some of those losses,” said Joe Duff, Gaylord city manager.

While a wage structure such as Georgia-Pacific’s may be challenging to replace, local leaders pointed to numerous industries remaining stable or showing growth locally in recent years. Beachnau pointed to increased lodging room sales as one mark of a strengthening tourism sector, and noted that the oil and gas sector has been holding its own. Duff noted Gaylord’s continuing development into a regional retail center — with a new shopping plaza currently in the works along West Main Street.

And while several ideas for repurposing Georgia-Pacific’s site for other forest products uses fell through — with the factory demolished in 2013 — local economic observers pointed to recent strengthening elsewhere in the local manufacturing sector.

“Most of the manufacturers that felt the initial impact of Georgia-Pacific’s closing remained in Gaylord and are still operating today,” McComb said.

Along with rebounds for some tool-and-die and plastics manufacturing operations, Duff pointed to the arrival of SunFrog, a fast-growing company which offers custom T-shirts with an array of designs and occupies the former Kimball Electronics site. With SunFrog recently counting 250 people in its workforce, McComb noted that it’s Otsego County’s third-largest employer after Otsego Memorial Hospital and Gaylord Community Schools. Beachnau added that the Gaylord plant of Cooper Standard, an automotive industry supplier, recently has been in growth mode.

While the project will happen outside Otsego County, John Burt, Otsego County administrator, noted that Arauco North American’s planned $345 million particleboard mill near Grayling likely will yield its own benefits for Otsego’s economy.

“The planned particleboard mill in Crawford County will employ many Otsego County residents,” he said. “Those will be good jobs that will have a very positive effect on our residents.

“The region is really on the upswing, and I believe we are heading into a bigger and better economy.”