Economy not likely to hit area too hard

Invista layoffs will drive up the unemployment in Waynesboro, but the city likely will not be hit as hard as others by the recession, a state economist said Tuesday.

“Overall, that area is pretty healthy,” said Bill Mezger, chief economist at the Economic Services Division of the Virginia Employment Commission, “so I don’t think the layoffs that have been announced — it isn’t like Martinsville where you have 10-percent unemployment.”

Waynesboro’s unemployment rate in October, the latest month for which data were available, was 5.6 percent compared to 4.5 percent in the region and 4.2 percent in the state.

The city’s rate figures to spike in the wake of Invista’s recent announcement that it will lay off 210 workers as part of restructuring plan that includes the temporary idling of nylon operations.

The Kansas-based fibers manufacturer has filed a federally required notice to all 623 of its company workers in Waynesboro saying they could be laid off by Feb. 8. The company has said it filed the notice with all of its workers because it is has not yet determined which of them will be laid off. The company has said that the original figure of 210 cited in announcements last week remains accurate (see accompanying story).

Invista’s notice, filed under the federal Worker Adjustment and Retraining Motivation Act, or WARN, is the latest in a series filed across the state and an indicator of the worsening economic climate in Virginia. Advance notice of 60 days is required under the law in the event of mass layoffs — defined as 33 percent of a company’s workforce — or a plant closing. A layoff of 210 workers at Invista calculates to 33.7 percent of its workforce.

So far this fiscal year, 52 WARN notices affecting 7,733 workers have been filed statewide. Projected over the full 12 months of the fiscal year that ends in June, that adds up to 104 notices affecting 15,466 workers — more than 50 percent higher than last year’s filings in both categories. Nine companies have filed notices affecting 1,813 workers

Trends like those will push unemployment rates higher, possibly to 8 or 9 percent nationwide, Mezger said.

In Waynesboro, “it’s moving just about like the state,” he said. “And, of course, when you get more layoffs, what you’re talking about probably would add a couple of more tenths to the unemployment rate.”

Invista has cited dwindling demand for carpet, driving by the slowdown in new home construction, as the driving factor in restructuring at the Waynesboro plant. Company officials have said they hope a return of consumer confidence will allow nylon production to resume.

A strong manufacturing base like Waynesboro’s makes the community vulnerable to layoffs but there is a plus side to manufacturing layoffs, Mezger said.

“The good thing with manufacturing layoffs is when the recession ends, the businesses start things up ... pretty quickly,” he said. 

While the United States is in the midst of a recession Mezger expects to last another year, Virginia will probably reach recession-thresholds by February.

“Right now, it looks like recovery is going to be slow,” Mezger said.