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Sunday, November 26, 2006

Has James Hardie lived up to its hype?

Officials and workers alike say the pIant has helped restore confidence and has spurred new development in Pulaski.

Alan Kim | The Roanoke Times

Ben Birkle, a manager at the James Hardie plant in Pulaski, looks over the assembly line machinery that applies paint to the cementious fiber siding that is produced at the plant.

By the numbers

  • $110 million to 120 million: Amount of money James Hardie expects to invest in its Pulaski plant
  • 220 to 240: Number of people the plant expects to employ at full production
  • 150: Number of people employed at the plant; of those, 130 are hourly workers and 20 are managers
  • $12.25 to $17: Amount, per hour, the plant’s hourly employees are paid
  • 12 to 15: Number of workers, both managers and hourly employees, who came from out of state
  • 800,000 square feet: Size of the James Hardie plant; of that, 530,000 square feet is plant space, and 270,000 is warehouse
  • $9 million: Amount the state, county and town have paid in prep work, infrastructure and tax incentives to bring James Hardie
  • $7.65 million Amount in bonds and cash the town and county have paid to help bring James Hardie
  • 3.6 percent: Unemployment rate in Pulaski County in September
  • 5.8 percent: Unemployment rate in Pulaski County in August
  • 5,850: Number of manufacturing jobs in Pulaski County (Manufacturing employs more people in the county than any other industry. Government employs the second-highest number of people, with 2,365 jobs.)
  • SOURCE: Virginia Employment Commission, town of Pulaski, James Hardie

PULASKI -- By the time he walked through the doors of the newly built James Hardie plant here, Andrew Boyd had been laid off twice and was tired of the uncertainty that seemed to go hand in hand with a job in manufacturing.

"I worked in textiles for 18 years, and the last 10 years, I wondered what was going to happen, whether jobs would still be here," the 38-year-old said. "Since '94, jobs have been going overseas, [and] I just wanted to get off the ship before it sinks."

Boyd wasn't alone in his concern.

Looking back two years, Pulaski Economic Development Director John White recalled a time of fear and unease, a time when plant closings and downsizings shed workers by the hundreds.

"We faced the closing of Renfro Corp., and that was a loss of over 500 jobs just like that," White said. "And I think there were a series of things prior to that that created some anxiety: What was the future going to be like? How tumultuous was it going to be? Would we be able to sustain ourselves?"

Against such a backdrop, it's hardly surprising that James Hardie Building Products' decision to locate its 10th American plant in the Pulaski Business Park was seen as a godsend.

Media releases heralded the February 2005 announcement as a signal of stability and "new vitality."

In anticipation of the building materials manufacturer's $98 million investment and 200 new jobs, the state offered Governor's Opportunity Fund grants and money for infrastructure. The town and county followed suit with millions of dollars' worth of site work.

And even before the plant began regular production runs, the town was awarded a community economic development award by the Virginia Economic Developers Association.

So has the plant lived up to the hype?

While it may be too soon to see measurable effects on the street, officials say yes.

So does Boyd.

"I think it's going to be very good for the economy because you're talking about a company being here and employees that are working here knowing they'll have a job 10 years from now," said Boyd, who has been with James Hardie for about a year.

Emboldened by this newfound job security, the Galax resident is even looking to buy a house in Wytheville or Pulaski.

"When you have a steady job, you can afford to invest in something like that," he said.

Beyond the individual-level impacts, officials say the plant has helped restore confidence and has spurred new development in Pulaski. They point to renovation efforts downtown, homes purchased in their neighborhoods and donations the company has made to youth programs.

And above all else, they say James Hardie has given Pulaski what White calls a "tremendous psychological boost."

Alan Kim | The Roanoke Times

Forklift operator Andrew Boyd (right) trains Mike Martin. Hourly workers are cross-trained in all aspects of the plant operation.

To judge the significance of that boost, it is important to look not only at the layoffs that preceded the company's announcement, but those that have followed it.

Seven months after the James Hardie news, Ethan Allen Interiors announced it would convert its Dublin plant into a regional distribution center -- a move that cost 250 employees their jobs. Last month, Pulaski Furniture Corp. said it would close one of its plants and lay off about 119 employees in December. And earlier this month, Volvo Trucks North America and Mack Trucks announced plans to lay off about 1,000 workers beginning in January.

Within an environment of decline, the James Hardie plant continues to ramp up.

On a recent tour of the plant, portions of its 800,000-square-foot building sat empty, waiting to be filled with new machinery. In the area where siding is produced, large sheets of HardiPlank traveled down one highly automated production line while a second line sat empty.

Eight months after it produced its first piece of siding, Human Resources Manager Chuck Swain said the plant's output is just a quarter of what it will eventually be.

Dave Kessner, the vice president for manufacturing, said the facility is producing at a rate of 170 million to 200 million square feet of product a year. At build out, with both production lines running, it will produce 600 million square feet of product a year.

Alan Kim | The Roanoke Times

Workers on the ColorPlus production line at the James Hardie plant in Pulaski apply primer and paint to the cementious fiber siding that comes with a 15-year warranty on the finish. The process is a closely guarded trade secret.

Future bumps in production will result in bumps in employment numbers.

Kessner estimated the plant would eventually employ 220 to 240 people.

With a current force of 150 employees, Swain said he expects to hire additional workers in groups of 15 to 20 as more machines come on line.

The competition will likely be tough.

"There was a great deal of interest," Swain said of his initial hiring rounds. "There are 150 people here, and I think we went through 4,000 applications to hire that bunch."

Most of the men and women that were hired had jobs in other industrial and manufacturing facilities, often in declining industries. They're paid between $12.25 and $17 an hour, and a majority come from within a 75-mile radius of the plant.

Alan Kim | The Roanoke Times

Ellen Hedge and Don Turner stack sheets of interleavers used in drying and curing the cementious fiber boards. The average age of hourly workers at the plant is 40.

Ellen Hedge of Radford said she left a job as a manager with New River Industries to work for James Hardie.

Like Boyd, she was afraid she'd lose her job and wanted to sidestep the inevitable.

"It's different," Hedge said of James Hardie. "I've seen there's more of a future here. You've got something to look forward to."

Government and business leaders hope attitudes like Hedge's will soon result in increased spending.

"At 13, 14, 15 dollars an hour, you've gone from a low-wage job economy to a much more significant livable wage, and that was one of our goals all along," White said. "We can't continue on this treadmill of sort of low-income jobs.

"You can't build a community on that," he continued. "You've got to have good wages paid because those are the people who are going to shop retail and are going to put investments in their churches and in your social service agencies, and they're going to volunteer and all that good stuff."

But with most James Hardie employees on the job for less than a year, White said the plant's new jobs have yet to make much of an impact on the average resident.

David Warburton, a Pulaski attorney and president of the Pulaski County Chamber of Commerce, said he hasn't seen too many ripple effects, but he's heard the buzz.

As a result, Warburton said he believes the plant will affect the community in three ways: "One, is that it replaces in some respects, one of the major water users, which keeps the water system afloat. ... Second, it stabilizes the economy by providing a variety of employers. ... And third, it invigorates the natural mission of the community college."

Area real estate agents say James Hardie employees haven't made a significant impact on the housing market -- yet.

Dennis Bane, a Dublin-based Realtor with Century 21 Jim Owens & Associates, said his firm's 16 agents have sold 13 homes to plant employees in the past year. Those homes ranged in price from $210,000 to $389,000 and were sold primarily to upper and middle managers who had moved from out of state.

Ed Cox of Mabry & Co. Realtors said in the third and fourth quarters of this year he sold four of his last 20 to 25 homes to James Hardie employees. The houses were priced between $130,000 and $170,000.

Alan Kim | The Roanoke Times

With James Hardie since 1996 at the Plant City, Fla., plant , Edwardo Figueroa jumped at the chance for a transfer to Pulaski. He moved in September with his wife, Erin, and daughters, Andrea, 10, and Ceceilia, 7. They recently closed on a house in the town of Pulaski after living in an apartment complex in Christiansburg with rent payments covered by James Hardie. The Figueroas were renting in Florida.

One of them went to Edwardo Figueroa, his wife and two daughters.

A 10-year James Hardie employee, Figueroa said he transferred from Florida for the chance to live -- and invest -- in a more mellow, slower-paced community.

Plus, said Figueroa, who works as an inspector on the plant's ColorPlus line, "starting fresh up here in Virginia gives me an opportunity for advancement -- rapid advancement."

The brand-new Pulaski resident expects other workers to follow him into the housing market, and both Bane and Cox said they also expect more sales in the future, as employees -- particularly mid-level managers and hourly workers -- transition out of rental units and begin looking for permanent homes.

While the plant's economic impact has yet to trickle down much beyond those directly affected, James Hardie has become a major customer of town water and sewer services.

Pulaski Mayor Charlie Wade said the plant uses somewhere between 200,000 and 300,000 gallons of water a day. At full production, it is expected to use 500,000 gallons a day.

Alan Kim | The Roanoke Times

Andrew Boyd directs a front-end loader driven by Mike Martin to one of the autoclaves that contains a finished batch of cementious fiber boards.

Town Manager John Hawley said the town charged James Hardie $56,651.64 last month for water and sewer. That amount is expected to jump to $80,129 a month when the plant is fully operational.

The town and county also receive machinery and tools tax dollars from the company.

Hawley said James Hardie will pay the town $129,000 in machinery and tools taxes this year, and he expects that amount to increase next year because of additional equipment.

By comparison, Hawley noted, the town received $110,000 in machinery and tools tax dollars from the entire community in the year that ended June 30.

This year, the county received $351,275.18 in machinery and tools tax from the manufacturer.

"I think the hype always subsides a bit, but the reality is that they're a significant customer now for water and for sewer, and they will help us stabilize a tax base that has been hit hard by industrial transformation," White said.

That stabilization came at a price.

White said the town, county and state provided James Hardie with about $9 million in site preparation work, infrastructure and tax incentives. Roughly $7.65 million of that comes from the town and county.

With revenue from water and sewer sales and tax dollars, Hawley said it will likely be eight years before the town and county start seeing a return on their investment.

Both White and Wade say the project could not have happened without incentives to sweeten the deal.

Senior project manager Rick Lawrence helped select the site and said decision-makers were won over by Pulaski's location along the interstate, its proximity to suppliers and rail, reasonable utility rates -- and the town's "out-of-the-box thinking."

White hopes to apply this thinking to future projects.

"What we're really trying to do ... is to build a stronger case for people to invest in our community," White said. "James Hardie has invested $120 million and yes, that will ripple through our community, but James Hardie is not a silver bullet. It's going to take more investment and it's going to take more people recognizing that the community's worth investing in."

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