- Title
- State
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-
- Date
- June 10 1961
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-
- Place
- ["North Carolina, United States"]
-
State
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Yankee businessmen tell of
their experiences when
they move their plants to
the south
The South'* bid (or inda»tr> has hit Nc«
England hard and ha» hit Connecticut per¬
haps harder than any other state. There i»
natural Interest— and concern — in that area
about our acquisition of northern plants.
Ibis interest is indicated in the follow ini’
article in the "Hartford C'ourant.” written
by Webster (iault. financial editor of that
paper. North
«
'arolinbns might be interested
in the kind of report the Hartford paper is
giving its readers on this sensitive story.
What's it like doing business in the
South? Arc Connecticut Yankees find¬
ing their new ventures there as profit¬
able as they had hoped?
This reporter tossed these questions
last week at several Connecticut execu¬
tives whose companies have moved
some of their manufacturing operations
to the South in the last five years.
The replies ran the gamut from tax
breaks to bugs of all things. Sand¬
wiched in between were several sur¬
prises about why industry moves south.
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ОЛЯМИ Г ООО
CO. • WlS»r04S»l*M N c
It seemed important to ask these
questions for a couple of reasons.
There is a new move afoot in the
Legislature to strengthen the state's
weapons for keeping and attracting
new industry. Meanwhile the removal
of Connecticut industry continues with
the announcement last week that the
Sarong Co. of West Haven is con¬
solidating its operations in the South.
This is a touchy and timely subject
in New England, as everyone knows.
In the lust couple of weeks. Ralph
McGill, editor of the Atlanta (Ga.)
Constitution has written articles pub¬
lished in The Courant which sought to
give a balanced view of the South s
industrial situation.
"The South ... is viewed sullenly as
a place which seems to persuade old
established plants to come to it, leav¬
ing the jobless behind," McGill wrote.
"That the South also is in transition
and has its own jobless is not under¬
stood." he later said.
The Atlanta editor is too good a
journalist to give a one-sided picture of
industrial conditions. In another arti¬
cle. he frankly stated the South is
threatened with economic stagnation
if the political and education problems
brought about by integration scare new
industry away. And already there is
danger of that in Louisiana, he noted.
In talking with Connecticut execu¬
tives it was surprising to learn that
these factors do not concern them —
at least now. And. on balance, their
companies have found their new south¬
ern ventures to be both satisfactory
and profitable.
It also was interesting to learn that
some Connecticut companies were not
enticed into doing business in the South
— as the public seems to view every
shift out of the state. The decision to
move often has been made inde¬
pendently because of a need to get
closer to raw materials — particularly
in the case of textile firms. The change
in markets in America has prompted
other companies to build in the grow¬
ing South, especially when many of
their important customers are erecting
plants there.
These arc forces in business which
even a favorable economic climate
here cannot stem. But that is only part
of the story.
Since 1955 more than seven Con¬
necticut textile companies have moved
all or part of their operations to the
South, leaving 2,500 people jobless
here. At least another 10 Nutmeg firms
have moved some of their Connecticut
operations to the South, affecting
2,000 more people. They have found
many disadvantages in doing business
there, but it is doubtful if any of them
will return in the near future.
None of the executives questioned
in this survey wished to be quoted be¬
cause of the problem of community re¬
lations. But here’s what they like about
the South.
Land and new plant costs are lower,
they report. Freight transportation and
labor are cheaper. Taxes are lower.
The communities they enter are friendly
and do their utmost to make the new
business feel at home. Traffic prob¬
lems are less. Cnions are less trouble¬
some. People work harder there.
Among the disadvantages, these fac¬
tors were cited. Labor turnover is
higher, particularly among the newly
recruited farm personnel who find
manufacturing monotonous. The peo¬
ple have little training for industry,
particularly in metalworking. The de¬
mand for new roads and schools trig¬
gered by the influx of industry is rais¬
ing manufacturing costs.
Another company reports that south¬
erners are slow in learning and ab¬
senteeism is high, often for legitimate
reasons. Workers don't seem so healthy
there and during the summertime bugs
cause more respiratory ailments than
northerners have during the winter.
And once workers are hired, this com¬
pany adds, they begin to demand
wages as high as their northern coun¬
terparts.
Perhaps the most revealing state¬
ment on the subject comes from a Con¬
necticut industry which has just relo¬
cated in the South. The company feels
that it has from five to 10 years in
which to remain competitive by op¬
erating there. Then taxes and labor
costs will begin to match the North's.
As long as that lag continues, so
will the exodus of industry, the execu¬
tives agree. But the end may be in
sight.
IQ
THE STATE. June IO, 1961