Oil-and-gas man T. Boone Pickens and the presidents of Georgia Tech and Southern Company are among a thousand people expected in Dalton next week for a summit about the state of U.S. manufacturing. If you want to know why Dalton, you need to know a bit about how good things used to be in one of the cities hit hardest by the recent recession.
When I was a freshman at the University of Georgia, I had a fender bender on I-85 while driving home to Dalton for Thanksgiving. The damage: $800 to the hood of my car. To pay for it, I simply went to work over Christmas break at the same carpet mill where I’d worked the summer before.
I was available for just three weeks. No matter. There was plenty of work to go around, and I was given plenty to do during those three weeks. To be able-bodied and unemployed in Dalton practically required an aversion to work itself.
If it was pretty hard to be unemployed in Dalton 14 years ago, the opposite is true today. Unemployment in Whitfield and Murray counties, at 11.5 percent in March, was the highest of any of Georgia’s metropolitan statistical areas (MSAs). The state Labor Department reports just 200 net jobs created during the past year in the Dalton MSA, where some 142,000 people live and thousands more go to work. Or used to.
What worries people there now is that the good old days aren’t coming back. The end of a long housing boom, particularly in Georgia, doesn’t help. But Dalton’s mayor, David Pennington, said other manufacturers face the same challenges as the area’s dominant flooring industry: regulatory policy, tax policy and education.
“If Dalton doesn’t lead [in] that, I don’t know who will,” Pennington told me this week, “because we’re one of the last manufacturing centers in America where product is conceived, designed, manufactured and marketed.
“In other words, we’re not just some outpost for a global manufacturer” that could shift operations elsewhere, he said.
While tax policy is important — Pennington said the temporary full expensing of large capital purchases and the current capital-gains tax rates should be made permanent — the mayor says manufacturers are more concerned that burdensome regulations are leading to high energy prices they can’t afford.
“We’re not for polluting the world, but the regulators have really gotten out of control,” Pennington said. “Once you empower these people, let’s face it, elected officials aren’t standing over their shoulders watching what they do.”
And then this: “If we don’t start drilling for oil again in this country and use the natural gas resources we’ve found … we have no economic future. Just business with windmills and clean energy — that’s fine 50 years from now, but we’ve got to survive today.”
Pennington acknowledged that not every kind of manufacturer can survive in 21st-century America: “We’re not going to make socks in this country again.” His pitch for manufacturers that can make it echoed those common challenges: it’s energy-intensive (the regulatory challenge), capital-intensive (taxes) and needs a skilled work force (education).
The small companies that can innovate and grow are the ones that suffer most from this crushing trio, he said. Such firms can’t relocate around the world, “and they don’t have giant staffs to navigate these regulatory issues and tax issues.”
After all, the theme for the Dalton summit is “We Can Make It in America.” The same goes for many of our manufacturers’ challenges, and the solutions.
– By Kyle Wingfield