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Eastman Chemical in Kingsport Plans $80 million in labor cuts

by Lewis Loflin

It was only about two years ago Eastman Chemical announced it would be hiring 2000 workers according to various press reports. Instead Eastman Chemical Company plans $100 million in cost reductions in 2009, $80 million of that will involve wage and job loses. For years they've claimed a labor shortage, but never seemed to hire any of the region's many college graduates. This in reality has gone on for years as Eastman in Kingsport has cut thousands of jobs as Ferguson came to power replacing Ernie Davenport, once crowned as one of the worst value CEOs.

To quote the press, "We have taken a number of actions over the past several years that better position the company for economic downturns," said Eastman Chairman and CEO Brian Ferguson. "In addition, the company's flexible workforce structure allows us to quickly and effectively respond to today's challenging economic environment...We continue to believe, however, that the company is well positioned to weather this current economic crisis, and that we can successfully manage costs while pursuing our plans for growth."

I warned several people at a local community college Eastman was not going to be hiring the 2000 people they were claiming in the press so taking a lot of extra college classes wasn't going to produce anything. I was right again. "Given the sudden and dramatic deterioration of the global economy, we are slowing work on some of our projects as it makes sense to do so," said Ferguson. I know, we have another labor shortage and need to import cheap foreign labor via H1B visas to fill them. http://www.eastman.com.

Poisoned Schools

WJHL (December 8, 2008) According to a special USA TODAY report, seven Tri-Cities schools rank among the worst 435 in the country when it comes to their proximity to outside pollutants. The report, "The Smokestack Effect: Toxic Air and America's Schools," used data from 2005 emissions reports filed by 20,000 industrial sites to come up with its rankings...According to the USA Today report, out of 127,800 public, private, and parochial schools nationwide, seven in the Tri-Cities received poor grades...

Eastman Chemical Company and Holston Army Ammunition Plant in Kingsport are listed as other major pollutants for West Greene and for six Kingsport schools too...USA TODAY admitted its report is not conclusive...The Tennessee Department of Environment and Conservation is quick to agree with that point...Eastman Chemical Company Spokesperson Betty Payne argued the report is misleading. "Their methodology is flawed. The state did a study (recently) saying there was no cause for concern; there were limited toxins in the air. We don't think there is a problem."

Another 600 Jobs lost

WJHL TV (December 16, 2008) is reporting Wyndham Vacation Ownership in Johnson City will close its center that markets vacation opportunities. The call center is expected to cease operations some time in February, a move that will cost 300 people their jobs. Johnson City officials claim to have a possible client for the shut-down Finger Hut building, but won't give specifics that could produce 300 jobs. This tends to be part of a pattern where companies change names, lower wages, get the corporate welfare, and we start again. I'm not claiming the two companies are related, it's just a pattern they use around here.

One former worker had this to say, "I worked there when it was Fairfield. Employee turnover was high then and I expect it still is. The telemarketers must meet a weekly quota or they are terminated. I never considered it permanent, just something to pay the bills while I looked for a less-demanding job. I really feel for all those folks who will be out of work."

Another loss

WJHL also reported that AGC Flatglass, located in Kingsport, and Hawkins County announced they would be laying off more then 300 employees. They blamed the layoffs on lagging construction. But AGC knows what they are doing. To quote the press, "Hawkins County Industrial Board, along with Sullivan County has been in talks with AGC about offering tax breaks if the company was to expand to the area. If it were to happen, they would essentially restart the production line they closed last April, only gearing it more towards Solar products." I believe they better find a way to just keep them here. The company website is at http://www.afgglass.com/

Unicoi County

The local press (December 10, 2008) reports Erwin, Tennessee and Unicoi County's jobless rate has remained about the same, even declining slightly from last year...The rate may be increasing after the local NN Ball and Roller Plant laid off about 30 workers. Plant manager, Frank Gentry says that he discussed the company's plan with his workers. He hopes that the layoffs are temporary, and that the workers can return after the holiday season. That will depend on the plant's customers' projected sales for 2009...

Cuts in Education

Tennessee (AP) - The University of Tennessee is bracing for up to $75 million in state funding cuts. UT President John Petersen said in an open letter Tuesday to the five-campus, 46,000-student system that he is taking several steps immediately to reduce spending. The state's flagship university is putting an immediate freeze on hiring, renovations and furniture and equipment purchases. It also is placing a moratorium on new academic programs and nonessential travel. And it's beginning a system wide process for academic program review. The $75 million in estimated cuts is slightly more than the university projected as a worst-case scenario only a week ago as UT's share of an $800 million state revenue shortfall. December 9, 2008

Nashville, Tenn. (AP) - The Tennessee Board of Regents voted to allow Chancellor Charles W. Manning to authorize system presidents to order layoffs, pay cuts and work time reductions...(because of) a "severe state budget shortfall." The regents system includes six universities, 13 two-year colleges and 26 technology centers providing programs in 90 of Tennessee's 95 counties to more than 180,000 students.

ETSU President Doctor Paul Stanton said he has no plans to order mandatory furloughs. He may eventually ask employees to take voluntary furlough days, but, not yet...Northeast State Technical Community College President Bill Locke said he supports the Board's decision, but, also is not planning to mandate furloughs...President Stanton said if ETSU does turn to furloughs, he will make sure they are staggered so the quality of education does not suffer. January 15, 2009 Times-News Education like government in general is a major industry in the Bristol region. With massive cuts in government due to budget problems in Virginia and Tennessee, we could be in for real problems if this is happening as the private economy continues its two-decade decline.

Might Get 20 Jobs in Five Years

BHC (December 12, 2008) is reporting the The Seaman Corp. in Bristol, Tennessee opened a $5.5 million liquid coating line. The Ohio based company plans to spend $7 million. Seaman produces specialty fabric using cutting-edge weaving and coating formulas. The fabrics are used for truck tarps, landfill liners, inflatable recreational and boating products, and military products such as shelters and fuel containers. They might add 20 jobs over the next three to five years. Their website is at http://www.seamancorp.com/prodoverview.html

Fun at TVA

BHC (December 7, 2008) reports TVA's top 11 executives and two former executives who left during that year received about $11 million in salaries, incentives and deferred compensation, according to salary and compensation records requested by the Bristol Herald Courier. The authority's nine-member, part-time board of directors was paid a combined $371,800. In recent months, TVA imposed a nearly 20 percent average increase in rates - blaming the hike on skyrocketing power-production costs. The increase kicked in Oct. 1 and means the average residential customer is paying about $18 more a month.

TVA is a federal corporation overseen by the U.S. government, TVA supplies power to about 9 million people in seven southeastern states, including about 50,000 Tennessee and Virginia customers residing in the greater Bristol area. Earlier this decade, Congress approved a new governance structure for TVA that mandated significant changes and shifted responsibilities to executives who replaced the former three-member, full-time board of directors that oversaw operations. TVA will be stuck with the cost of a massive sludge spill that will be charged back to customers.

To quote one local resident:

Yes, Its a real shame. But the real truth is they are not the only crooks. If you look at all companies in the Tri-Cities area that are paying cheap wages and upper management execs and owners are walking away with it's the same thing. I think they need to do away with the Bristol (Chamber of) Commerce because its ran by the same crooks. For, example you can not get your car fixed any more or serviced because the mechanics do not get paid enough to care. I think they only get paid ten dollars an hour. And I can go on and on. But, the real truth is, they are not the only crooks out there. I sure am glad that Obama supports unions. We need them in this area. If you can get the people to stick together. But If we continue to work for it, they will continue to pay it. If the company decides to leave the people have not lost any thing. That's the way I feel.

Tri-Cities Labor Market Report East Tennessee State University - Third Quarter 2014

Employment levels still falling since 2009.

Existing labor market trends dominated the Tri-Cities Consolidated Statistical Area (CSA) in the third quarter. Compared to the same period in 2013, regional employment was lower by 1.7% to 218,244, while unemployment fell 10.3% to 16,664 as discouraged job seekers continued to leave the regional labor force. The summer unemployment rate for the metro area was 7.1% (compared to 7.7% a year earlier). With the labor force shrinking by 2.4%, the falling jobless rate is a sign of labor market weakness.

Among the twelve regional NAICS industry sectors, employment levels were higher in six, lower in six, and unchanged in none (compared to six, four, and two in the second quarter). Job growth was led by construction, professional & business services, other services, and education & health services. Smaller employment gains were reported by transport & utilities, and leisure & hospitality. Major job losses occurred in retail trade, government, and manufacturing. Small employment declines were reported by wholesale trade, information services, and financial services. Overall, the private sector in the metro area saw modest job growth.

During the July to September period, employment was lower in all three cities - falling 2.2% in Kingsport, 2.0% in Johnson City, and 1.2% in Bristol. Matching the regional pattern, large numbers of unemployed workers are exiting the labor market in each city. This has lowered the jobless counts, contracted the labor force, and reduced the unemployment rates. The percent of workers unemployed was 7.0% in Kingsport, 7.1% in Johnson City, and 7.1% in Bristol. As in the metro area, the lower rates in each city reflect labor market weakness.

Ref. http://faculty.etsu.edu/hipples/