Officials ask, "Is it possible Inland can stay open?"

By Kathy Helms-Hughes
STAR STAFF
khelms@starhq.com

   City of Elizabethton and Carter County officials met Monday with local Inland Paperboard & Packaging Inc. representatives and placed telephone calls to corporate headquarters in Indianapolis in a last-ditch attempt to prevent the closure of the Elizabethton factory.
   Inland announced Friday that it planned to close packaging plants in Elizabethton and Hattiesburg, Miss., eliminating a total of 235 positions, approximately 150 of which are in Elizabethton. Inland will continue to operate its small sheet plant at 152 Iodent Way.
   City Manager Charles Stahl said Inland's decision took the community by surprise. Stahl, Mayor Sam LaPorte, and County Executive Dale Fair want to know if there is anything the community can do which might cause Inland to reconsider its position.
   "I've already placed a call to Inland corporate [headquarters]. The mayor, the county executive and I have talked to the local representatives here in Elizabethton. We'd like to be in a position to have some dialogue with the corporate office. Whether that would be productive or not is anyone's guess, but we certainly feel like we need to have some dialogue with them," Stahl said.
   He acknowledged that salvaging the industry operation might be difficult in light of the fact that the decision to close was announced Friday to employees.
   Unfortunately, Stahl may be correct.
   The Star contacted Doyle Simons of Timber-Inland in Austin, Texas, Monday to ask whether a local bail-out was a possibility.
   Simons said that a press release regarding the closure already has been issued "and the decision has been made to close those box plants. Unfortunately, it's for economic reasons. As you know, it's a very difficult economy out there right now, and these are steps we determined were necessary so that we could remain competitive in this industry."
   He said he understood the city's and county's offer to help, "but I think the decision has been made."
   The departure of Inland also casts doubt on the future of East Tennessee Railway operations in Elizabethton. The railway has been serving this area since 1881.
   Since the closure of North American Rayon in September 1997, the number of employees, as well as railroad customers, has steadily declined. The railway now has two local employees and with Inland's departure, only one remaining city customer -- Blossman Gas.
   East Tennessee Railway headquarters is expected to release a statement today concerning Inland's impact on the railway. Stahl said the loss of businesses which utilized the railroad has had a definite impact in recent years. "I know they were hoping to hold their own and hopefully looking at some business expansion possibilities, but where Inland's announcement comes into play here, it may create a serious setback for them."
   The loss of Inland also represents a significant monetary loss for the city and Elizabethton Electric System.
   Inland is the city's fourth-largest source of property tax revenue, according to Stahl. Inland paid $50,544 for the tax year which ended June 30, 2002, based on audit information. "We have not calculated the water/sewer revenue losses yet," Stahl said.
   Inland's closure also means roughly a $250,000 annual revenue impact to Elizabethton Electric System, which operates on a small margin, according to Phil Isaacs. Approximately half of that $250,000 goes to Tennessee Valley Authority, from which EES purchases the electricity it sells to its power customers.
   "Inland has been a good, steady customer and it will be a definite revenue impact on our system. It's not good news. We're ready and willing to help them in any way. There are some programs through TVA that we could make available to them to help soften their economic problems," Isaacs said.
   According to Stahl, the loss of Inland is not only a large one in personal and real property taxes, but a loss to the community as well.
   "This is a good corporate citizen, a good industry that has been a prominent part of our industrial base for over half a century. You can't calculate the real, true loss to the community when you consider the loss to not only employees, but families, and what the industry indirectly generates to other businesses in town -- the purchasing power of those employees," he said.
   "It's easy to dismiss the loss of this industry to the national economy or whatever, but the bottom line is we're losing part of our community when we're losing Inland; but I would say that about the others we've lost as well."
   More and more, industry appears to be shifting manufacturing operations to foreign countries where a day's wages are often comparable to what U.S. workers are paid hourly.
   "Obviously there's some national economic issues here regarding impact on manufacturing operations," Stahl said. "Is our economy shifting from manufacturing-based to service-based? I'd like to think that we can accommodate both."
   Stahl said the city is not excluding any business possibility when it comes to future economic growth. "I think we need to keep all options open and move forward with a strong plan of what we're looking for," he said.