NEK Searches For New Manufacturing Jobs
06/06/12 7:50AM By Steve Zind
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Vermont's Northeast Kingdom has the highest unemployment rates in the state. Much of the reason has to do with the loss of manufacturing jobs over the years.
The unemployment figures tell only a part of the story in a region where poverty levels are also high.
"Unfortunately it's more bleak than the numbers show. Large numbers of people are in very difficult situations," says John Freeman is president of the Northern Community Investment Corporation in St. Johnsbury, which helps small businesses.
The Kingdom's manufacturing economy was once centered on the region's mills. But many have closed.
Between 2001 and 2009 the three Northeast Kingdom counties lost 38 percent of their manufacturing jobs.
Freeman says there are positive economic signs today; like the agricultural renaissance in Hardwick and the Kingdom Trails system in Burke.
But there's a consensus that manufacturing jobs generally pay more and are critical to the region, and those jobs have yet to materialize.
John Goodrich, vice president at Weidmann Electrical Technology in St. Johnsbury says "people need hope to succeed. And what we have is a high out-migration of young people because they don't have hope for good paying jobs."
Outside his office, Goodrich dons a hard hat and a pair of goggles and leads a tour of the company's cavernous manufacturing plant.
Weidman makes a product that's ubiquitous but never seen: the insulation used in the electric transformers that hang on power poles everywhere.
The cylindrical shaped tubes are made out of a familiar Northeast Kingdom product: paper.
The process is deceptively simple, but the design and manufacture of the insulators are high tech. Weidman employs about 265 people, with an average salary of $52,000.
The Swiss-owned company is in the midst of a $40 million expansion in St. Johnsbury, but Goodrich says Weidman is a rare exception in light of all the lost manufacturing jobs in the region.
He ticks off a list of factors working against companies like his, including power costs and corporate taxes. He says the Kingdom's isolation and still-spotty high-speed Internet service make it an uphill battle to entice more manufacturing to the area.
To overcome the disadvantages, the Kingdom is increasingly looking to a federal program called EB5 that offers wealthy foreigners resident status in the U.S. in exchange for a $500,000 investment in an approved project.
It's designed to boost the economy of rural areas with high unemployment. So it's tailor made for places like the Kingdom.
State officials who oversee the program credit EB5 with creating 800 jobs at Jay Peak. Jay is one of the largest EB5 projects in the country.
Money from dozens of foreign investors has helped build a hotel and an Oz-like water park at the resort.
Jay Peak president Bill Stenger has traveled the world singing the praises of the Northeast Kingdom.
"This area is authentic and genuine as any in the state and it's an absolutely beautiful, secure, safe and reliable place in which to work and live," says Stenger, who is working with others to use EB5 to attract more manufacturing jobs to the Kingdom. His pitch to businesses doesn't just stress the rural lifestyle and the foreign capital available through EB5, but access to foreign markets.
"We're 90 minutes from Montreal. We're three hours from Ottawa. We're six hours from Toronto," he points out. "We look at that market as an incredibly important part of our present and future."
The city of Newport right on the Canadian border is one focus of the effort to bring in more manufacturing jobs.
Newport has the beauty of Lake Memphamagog and a downtown showing new signs of life. It also has the state's highest unemployment rate.
There's talk of Newport becoming a hub for the medical bio-tech industry. South Korea's AnC Bio is expected to bring 200 jobs to a building in Newport in a project financed by EB5 investors.
And the biotech company Numia Medical Technology is expanding and moving from Lyndonville to Newport.
So in light of these developments, are people wrong when they look at the unemployment numbers and think Newport is down on its luck?
"Are they wrong?" Diane Jameson laughs at the question. Then she adds, "To tell you the truth, they're not really wrong."
Jameson says it's a matter of perspective - and things are getting better.
Jameson owns Wider Than The Sky, a children's bookstore on Main Street in Newport.
It's one of the businesses people like Patricia Sears points to when touting Newport's comeback.
Sears is the executive director of the Newport City Renaissance Corporation.
Explaining the city's high unemployment numbers, Sears say, "The Newport area has lost a lot of manufacturing jobs over the years. Because of that its kind of the opposite of good news begets good news, it was bad news begets bad news."
Newport, like the rest of the Northeast Kingdom, is trying to rebuild the lost manufacturing base. The city is on track to receive Foreign Trade Zone status from the federal government. That could attract business to Newport by giving companies breaks on import and export fees.
Combined with the EB5 program, Sears and others hope to wield a potent one-two sales punch that will lure manufacturing back to the Northeast Kingdom.
They acknowledge that much of what they talk about is still in the future.
Tomorrow in part three of Kingdom Comeback, we look at an effort underway to boost manufacturing in the Northeast Kingdom.