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Officials: City will be repaid
Journal Photo by Lauren Carroll
Giuseppe Di Meo, the owner of Blue Naples Pizza said that his business will be affected by the closing of the Dell plant.
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October 23, 2009
» Mayor Joines' Oct. 19th Letter to Dell about City's Reimbursement
» Dell's Oct. 20th Response Letter to Mayor Joines about City's Reimbursement
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Published: October 9, 2009
The question is purely economical, but these days, it could easily pass as the title of a country song.
Is there room for a blue-collar worker in this brave new world?
About 900 Dell Inc. employees would like an answer, given that the Forsyth County plant -- a $115 million symbol of job security when it opened in October 2005 -- will be closing by Jan. 20. About 600 employees are expected to be let go by Nov. 18.
"When I got hired by Dell, I thought I was good to go for a long while," a shipping employee said yesterday. "It's just sad it's not going to work out that way."
The employee, like all others approached for comment, declined to be identified. They said they had been told by Dell officials that their severance package, ranging from eight to 12 weeks of pay and other benefits, would be terminated if they spoke with the media.
In the hours since their hopes were punctured like a balloon, many Dell employees and contract workers appeared to be going through the five stages of grief and acceptance at the same blistering pace at which desktop computers were assembled.
Employees sensed last winter that their jobs were vulnerable as more production was shifted to Mexico. Then there were three layoffs affecting a combined 310 employees, although some were brought back to handle end-of-quarter production pushes.
At its peak, there were about 1,150 full-time Dell employees and 250 contract and supplier workers in the plant. Most production workers made $9.50 to $14 an hour, with many in the lower-to-middle range of that scale.
"I understand Dell's making a business decision," the employee said. "It feels like it's made its money here and now can make these computers cheaper somewhere else.
"Still, they are a lot of people being hurt by this decision, and Dell needs to live up to its local commitments all the way through."
Dell told Allen Joines, the mayor of Winston-Salem, that it would repay the $15.5 million in city incentives as it is obligated to do in the incentives contract. Joines said that Dell has 30 days after the plant closes to refund the money.
Some local officials are skeptical about whether Dell will honor that commitment without legal action.
City Manager Lee Garrity said that $6 million of the money would have to be used to pay back debt that the city took on associated with the project. "What the mayor has asked is that we first see what kind of benefits will come from Dell and will come from the state before we see if there some gaps that the city might want to look at filling," he said.
Local officials and economists say they are banking on blue-collar workers to fill jobs in key industry sectors, such as advanced manufacturing, distribution and aviation.
But recent events suggest that blue-collar jobs in those fields are as vulnerable to the turbulent global economy as furniture, textiles and tobacco.
Forsyth County has lost nearly 3,000 blue-collar jobs in less than two years, according to the N.C. Employment Security Commission. That's counting the 905 Dell jobs and the 300 eliminated in the recent implosion of Pace Airlines Inc. RF Micro Devices Inc. has cut 475 jobs in Greensboro.
All of which is likely to keep the Triad's unemployment rate -- 11.3 percent in August -- at or above record levels well into 2010. About half of the Dell employees live in Forsyth County.
"There is a role for the blue-collar worker, but not in the factory," said Michael Walden, an economics professor at N.C. State University in Raleigh. "It's as skilled workers, such as medical technicians, repair and maintenance technicians, skilled craftspeople, etc.
"These are jobs that require training beyond high school -- specialized training or community-college degrees but not a four-year college degree."
Trouble is, Dell was supposed to have been a key bridge to the new Triad economy.
When Dell began hiring the first wave of a projected 1,700 full- and part-time employees in the summer of 2005, applicants were required to take three-hour aptitude tests and be willing to go to Tennessee and Texas for weeks of training.
They all did it, they said at the time, because they were confident that the plant was here to stay.
Yesterday, employees lamented Dell's decision to produce only desktops in the plant.
"Why couldn't they have invested quicker in mobile-phone technology and put this plant to good use with that," an employee said. "Everything's going to the phone now."
Merchants near the plant say they expect to lose business from the plant closing.
Shirish Patel, the owner and manager of The Pop Shoppe gas station in the Union Cross shopping center, said that a lot of Dell employees stop at his store for gas, beverages and other merchandise. He said he could lose 5 percent of his day business and 50 percent of his night business at his 24-hour station.
If that happens, he said, he may have to lay off the two employees now on his night shift.
Three years ago, Blue Naples Pizza used to get 50 Dell employees for lunch and about 70 for dinner practically every day, owner Giuseppe Di Meo said. But recently those numbers have declined to five or six at each mealtime. Di Meo said he expects up to a 3 percent drop in his business when the plant closes.
Combined, the four main local suppliers to the Dell plant created 400 to 500 jobs linked to contracts -- well below the range of 4,500 to 6,500 indirect jobs projected by two 2004 studies that stoked the fire for support of the state incentives package.
Only one chose to comment on the plant closing.
"Their business model is in transition, and we are focusing our energy and creativity on changing the CEVA model to stay in synch with this very important customer," said Les Grubbs, a senior vice president of logistics for CEVA Logistics.
Joines said he believes that there are job opportunities for blue-collar workers, with Winston-Salem Business Inc. recruiting in the sectors of printing, auto suppliers and distribution.
"I believe the FedEx hub will offer good opportunities for logistic companies," Joines said. The Dell plant is within 15 miles of the hub at Piedmont Triad International Airport.
"Over half of the biotech jobs can be filled with individuals with a high-school or two-year technical degree," Joines said. "Also, we must keep in mind that recruitment only represents about 15 percent of the new jobs created. Most come from new startups and expansions."
rcraver@wsjournal.com
727-7376
Journal reporters Fran Daniel and Laura Graff contributed to this story
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