High Tech Turns Sour

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High Tech Turns Sour

Layoffs Hit Communities Buoyed by Boom

By Robert E. Pierre and Pamela Ferdinand Washington Post Staff Writers Saturday, September 8, 2001; Page E01

HARVARD, Ill., Sept. 7

The 2,500 layoffs that ended in July at the Motorola cell phone manufacturing plant are still fresh in the minds of residents of this town of 8,000 just south of the Wisconsin border.

Motorola Inc. factory had been here just five years and employed some 5,000 workers. Restaurants like Nick's Cozy Nook -- where daily soup-to-dessert specials cost $4.95 -- filled up with Motorola workers during breakfast and dinner breaks.

But restaurateur Nick Halimi knew the good times had to end.

"We had so many good years in a row. Everyone knew [a downturn] was coming, but we really were not ready when it got here," he said. "There were a lot of couples who had just bought a house, or couples that had just got married or had children."

With the latest figures showing an unexpected surge in the nation's unemployment rate to 4.9 percent, there is anxiety throughout the American heartland that the good times are indeed coming to an end. The downturn goes beyond stock market losses and the dot-com crash, worrying manufacturing workers across the country.

"It's a very nervous feeling out there these days," said Margaret Blackshere, president of the Illinois State Federation of the AFL-CIO. "The security of the industrial sector is long gone. Even with the boom in the building sector, they are all nervous. They're wondering, 'Can we plan?' and 'Am I going to have a job next week?' "

The unemployment rate has gone up most sharply in states with a heavy reliance on manufacturing. In North Carolina, for example, it was 5.3 percent in July, up from 3.6 percent a year earlier. States like Texas and California, which had benefited enormously from the high-tech manufacturing boom, now are feeling the reverse effect. But even New England, which has been losing manufacturing jobs steadily for many years, saw its unemployment rate rise a full percentage point in the past year, to 3.7 percent in July.

In North Andover, Mass., Sandy Sudol, 52, has ridden the unemployment roller coaster for more than two decades as an entry-level worker for several telecommunications companies.

She has been laid off three times before. Now she expects to be among the first let go if Lucent Technologies Inc. announces another round of job cuts at its North Andover plant, which employs 4,000 people today, 1,500 fewer than a year ago.

Everyone who earned less than she does is already gone, she believes.

"When they have another one, I'm going to be on the list," she said.

A high school graduate and mother of two grown children, Sudol, who is also vice president of Local 1365 of the Communications Workers of America, earns slightly more than $16 an hour. With 17 years under her belt, she is eligible for a monthly pension of about $600. That means she would need to find another job if Lucent lets her go, she said.

In the meantime, the plant grows emptier. There are no more deliveries of bottled water, beverages and Danishes no longer appear at meetings, and many employees have been asked to return their cell phones, Sudol and others said.

Along with a nearby Raytheon Co. plant, Lucent revitalized the community and boosted the state's high-tech economy. But Lucent, which was spun off from AT&T Corp. in 1996, began the year with 106,000 workers and will have roughly 60,000 when it is done cutting next year, said John Skalko, a spokesman at the company's headquarters in Murray Hill, N.J.

In Texas, the jobless rate was 5.2 percent in July, up from 4.5 percent a year earlier. And analysts said the figure for August, due to be released in two weeks, may be higher still. But they said they saw no need for panic.

During most of the 1990s, before the high-tech boom hit Texas, the unemployment rate in the nation's second-largest state routinely exceeded 5 percent, said Jeremy Triplett, a labor market analyst for the state Workforce Commission.

"I think we're just seeing an adjustment back to what [the unemployment picture] normally looked like," he said. Just as computer manufacturers and related high-tech companies were big factors in the drop in unemployment in Texas in the late 1990s, they are now contributing significantly to the rise in joblessness, Triplett said.

In the Austin area, more than 15,000 workers have been pink-slipped this year, many of them by Dell Computer Corp., Compaq Computer Corp., Motorola and other high-tech employers.

One of them was Ginney Worley, 39, who was laid off in June after two years in the accounting department of ATMI Inc., which develops semiconductor technologies. Attracted by ATMI's better pay and benefits, she quit a job at a car dealership. Now, she said, she is paying a financial and emotional price.

"It's been very difficult," said Worley, who was searching for employment leads at a job referral center in Austin today. "I'm out here, but so is everyone else who got caught in the high-tech swing."

For months, California's economic troubles have been confined mostly to the tech capitals of Silicon Valley and San Francisco. But there are signs that the slowdown is beginning to affect the nation's most populous state in broader ways -- in manufacturing and shipping, entertainment and tourism.

At the Los Angeles office of Manpower Inc., a job placement agency, officials say they have stopped interviewing applicants in the past month because employers have all but stopped calling with positions to fill.

"There are more people calling in to find work, and there are fewer companies calling in with job orders," said Manpower office's Preston Brant. "It's really slow here. It's scary."

Pierre reported from Harvard, Ferdinand from Boston. Staff writers Paul Duggan in Austin and Rene Sanchez in Los Angeles contributed to this report.

http://www.washingtonpost.com/ac2/wp-dyn/A59911-2001Sep7?language=printer

-- Martin Thompson (mthom1927@aol.com), September 08, 2001


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