The Changing of the Guard in Georgia's Workforce: As Georgia's Economy Seeks to Continue Increasing Its Productivity, a Few Longtime Stars in Atlanta Might Be Playing a Diminished Role. Where Will Workers Turn to Find Jobs as Large, Old Guard Firms Cut Payrolls?
Davidson, Charles, EconSouth
So far, the 21st century has not been particularly kind to Georgia's workforce. The number of people working in the state peaked at 3.95 million during 2000, then declined for three straight years. Georgia's total nonfarm employment nudged upward in 2004 and climbed even more in 2005, to a level--3.99 million--slightly higher than in 2000.
But economic forecasters expect more growth in 2006, fueled in part by the leisure and hospitality industries. Still, Georgia's economy faces challenges, particularly in the important metropolitan Atlanta area. Metro Atlanta, which includes 28 counties, accounted for 59 percent of the state's employment and 61 percent of economic activity in late 2005, according to the U.S. Bureau of Labor Statistics (BLS) and the U.S. Bureau of Economic Analysis (BEA).
The problem is that some of Atlanta's largest employers have shed thousands of jobs in the past year and continue to cut. That list includes Delta Air Lines Inc., BellSouth Corp., and automobile assembly plants operated by Ford Motor Co. and General Motors Corp. (GM).
In addition, four military installations are slated to close, three in metro Atlanta and another in Athens. The U.S. Defense Department's Base Closure and Realignment Commission estimates that those closings could eliminate a maximum of 11,964 jobs, assuming no economic recovery occurs. However, Georgia expects a net gain of about 4,000 military jobs over the next several years mainly because of expansions at Fort Benning in Columbus.
Big companies make big
Delta Air Lines, for decades one of the state's biggest employers, has lost $10 billion since Sept. 11, 2001, and is shrinking in the wake of its September 2005 bankruptcy filing. Concentrated in Atlanta, Deltas Georgia workforce has dwindled from 32,000 in early 2001 to about 20,000 people at the end of 2005, according to various media outlets and the Georgia State University (GSU) Economic Forecasting Center. Delta has also reduced pay by 7 to 10 percent for most front-line employees, more for high-salaried officers.
According to Delta's third quarter 2005 10-Q filing with the Securities and Exchange Commission (SEC), the company's restructuring plan may eliminate another 7,000 to 9,000 jobs companywide--not just in Georgia--by the end of 2007 in addition to the 6,000 to 7,000 nonpilot job cuts announced in November 2004. About a third of the carrier's employees live in metro Atlanta. All told, these salary cuts and layoffs will be roughly equivalent to the Atlanta economy losing 15,000 jobs, the GSU forecasters figure.
Even more job cuts will come in the automotive industry as both of Georgia's assembly plants close by 2008. Last November, GM announced plans to shut its Doraville minivan plant, probably in 2008. Ford Motor Co., which began building Model As in downtown Atlanta in 1909, also plans to close its plant in Hapeville, just south of Atlanta. The factory, which assembles the Taurus, will shut down perhaps as early as the fall of 2006. Part of sweeping restructuring plans at the beleaguered U.S. automakers, those two closings combined will wipe out some 5,200 jobs.
Those moves continue a long decline in Georgia's manufacturing jobs. Since 1997, the state has lost nearly one of five, or about 104,700, of its factory jobs, according to the BLS.
Jobs in durable goods manufacturing have held steadier than those in nondurable manufacturing, and the state added manufacturing jobs in the third quarter of 2005 for the first quarterly increase since 1999.
Helping to offset the job losses at the Ford and GM factories, Kia, a division of the South Korean automaker Hyundai, announced in March that it will build an assembly plant in West Point, Ga. The plant is expected to ultimately employ 2,500 people and generate an additional 2,000 jobs at suppliers, according to various published reports.
Like Ford and GM, BellSouth is trimming its workforce amid an intensely competitive and changing business environment. …