Growth in health care and tech jobs may cushion the blow from Chrysler's cuts | St. Louis Public Radio

Growth in health care and tech jobs may cushion the blow from Chrysler's cuts

Jul 1, 2008

This article first appeared in the St. Louis Beacon: July 1, 2008 - Despite stomach-wrenching news for two of this area's biggest -- and best-known -- corporate citizens, a local researcher says the sky is not falling on the St. Louis economy.

"We've been through this before, and we will get through it again," said Russ Signorino, vice president of research for the United Way of Greater St. Louis who has spent much of his life analyzing work and economic trends in the region.

"The economy will continue to transition," he said. "Unfortunately, some of us will have to deal with a good deal of financial pain while the transition is going on."

Just weeks after Belgian brewery giant InBev announced it was going after ownership of St. Louis-based Anheuser-Busch Cos., officials with Chrysler said it was cutting production at one plant in September and shutting another plant entirely on Oct. 31.

The shutdown and production cuts will mean the layoffs of about 2,400 Chrysler workers. But the ripple effect resulting from the loss of good-paying jobs surely will be felt throughout the region--- from parts suppliers, to shopping centers, to restaurants, to movie houses.

Still, Signorino said, "I'm probably more optimistic than most people. I've been through the recessions of the '70s, the '80s and the '90s, and those were a lot tougher to deal with that what we are dealing with now.

"We were watching thousands of people being laid off on a regular basis. But, with that being said, nobody likes this stuff to happen.

"You don't want to lose a corporate headquarters; you don't want to see anyone lose his job."

FENTON'S MAYOR HOPES FOR THE BEST

Fenton Mayor Dennis Hancock was supposed to be spending this week on vacation, but Chrysler's announcement put an end to that. Instead of enjoying his time off, Hancock was fielding interview requests from reporters throughout the area.

Hancock noted that just last year Chrysler invested $500 million in the same plant it was now closing. "It doesn't make a lot of sense to me," he said.

Still, he said that he remains hopeful that "once the economy starts to turn around, people start going back to work and gasoline prices stabilize, Chrysler will start producing more vehicles again."

He noted that this is not the first time that the company has closed one of the Fenton production plants.

"Both plants have been closed before and later reopened," he said. "We're hoping this is another case of history repeating itself."

He said he knows that Chrysler has more fuel-efficient, hybrid vehicles in development and he believes that once the company is ready to begin building them, Fenton will be in a perfect position to lead that effort.

He says it is his understanding that the plant designated for closing could be adapted relatively easily to producing a new line of vehicles.

"I have not heard anything from Chrysler to indicate that this plant will never reopen," Hancock said. "I have learned over the years to listen carefully to what they say. What they say is what they mean. When they say the plant is idling, I liken it to a car idling. It's ready to go at any time."

Signorino said that while the decision to idle one of the Fenton plants "came as a surprise," he agreed with Hancock that it doesn't necessarily mean the end of those jobs. "When it happened before, I remember people saying, 'Oh, my God, this will never come back.' But after a couple of years, they did reopen."

Signorino said the days of St. Louis depending so heavily on its beer, shoes and automobile manufacturing industry are long past.

SURPRISE: JOBS HAVE GROWN IN 5 YEARS

While Anheuser-Busch and Chrysler remain very important to the economic fabric and the prestige of the community, more and more St. Louisans are finding jobs in non-manufacturing sectors.

He noted that while the number of jobs in the region is down about 9,000 from the same time last year, the number is actually up by more than 32,000 from five years ago.

The greatest loss of jobs has been lost in the area's manufacturing sector, down 17,000 for the five-year period. At the same time, though, jobs have been growing in other areas -- specifically in technology and health care. In the health care and social services area, Signorino said, there were 153,100 jobs five years ago. Today, that figure stands at 168,300.

"It's a major shift," he says of the transition. "And you can't just go from assembling an automobile to being a nurse in a hospital. There are entirely different skill sets, so there is a lot of pain along the way."

Signorino said the on-again, off-again problems at Chrysler can be traced to the inability of large manufacturing companies to "turn on a dime" to meet new demands of the American public.

"Not that many years ago, Chrysler was making fuel-efficient, light cars because that is what people wanted," he said. "Then we decided we got used to gasoline being a dollar a gallon and we started buying bigger and bigger again, so Chrysler switched over pickup tracks and vans and bigger vehicles."

Suddenly, he said, escalating fuel costs change consumer demand once again.

It happened so quickly, he said, "that it was impossible for Chrysler to change fast enough to meet it."

He said St. Louis is not unique. No area of the United States is unaffected by economic changes, he said.

"Nobody is immune. We hear more about it happening in St. Louis because this is where we live, where our interests are."