The Buffalo News

A SQUEEZE, BUT NO DISASTER, IN LOCAL INDUSTRY

Published on December 31, 2001
Author:    The News Business Staff
© The Buffalo News Inc.

It has been a rough year for business in Western New York. Though a national recession was formally declared late this year, many in business here knew they were ahead of the country in that regard. They had to fight harder and harder to make a buck as the year went on.

The economic chill following the Sept. 11 terrorist attacks contributed to the slowdown that had earlier gripped the Buffalo Niagara region. The region's reliance on manufacturing made it very susceptible to any national downturn, and the slowing automotive industry was hit hard. Yet while headlines from around the country told of layoffs of tens of thousands of people, the local economy was spared such large-scale carnage. The region's "never too high, never too low" economic durability may have shielded us from the massive cutbacks seen elsewhere.

Local signs of the business downturn, efforts to turn things around and several local economic successes were among the top 10 local business stories of 2001:

1. Delphi Harrison fights to survive

The 5,000 folks at the Delphi Harrison Thermal Systems plant in Lockport got a jolt in July when they learned that parent Delphi Automotive had placed their facility on its "troubled plants" list. For other Delphi operations, that had been the first step toward being sold or closed.

Following the warning, the plant's workers and managers battled back. They formulated a proposal to economize and raise productivity. The first result came in November, when Delphi management in Detroit announced it was keeping its Thermal Systems Division, of which the Lockport is the largest part, open for now.

Ron Pirtle, president of the Thermal Division, said that if profitability numbers are met, he believes the plant will stay open.

2. Bioinformatics possibilities

In the long line of potential "silver bullets" that will save the local economy, the plan to nurture a bioinformatics research center may be the most promising. Bioinformatics is the marriage of biology and mathematics to use knowledge of genetic coding to develop medicines. Many of the most specialized ingredients needed for such a research center are already here: world-class research scientists and the facilities where they work, a supercomputer at the University at Buffalo able to handle the data processing, and medical personnel able to help with clinical aspects.

The state gave the plan real life in November when it announced $207 million in public and corporate money and in-kind contributions to help launch a Center of Excellence in Bioinformatics near Roswell Park Cancer Institute, and the federal government has pledged $3 million.

The local private sector is firmly behind the effort, forming the nonprofit agency called BuffLink to help bring products to market.

3. Record home sales

Low mortgage rates and some pent-up demand for homes in the Buffalo Niagara region sparked a record year for home sales. The 9,583 homes sold through November 2001 was up 2.4 percent from the same period in 2000, and 7.4 percent above the same period of 1999.

The median price, meanwhile, rose 3.5 percent to $83,079.

4. HSBC staying put

HSBC announced in January plans to invest $160 million in the region and keep its 4,000 jobs here for at least 15 years. The bank followed up in September with a grand opening of its $57.5 million global data center in Williamsville.

HSBC Bank USA, with headquarters in Buffalo, is a division of the HSBC Holdings global financial empire. The bank employs about 3,200 nonbranch workers downtown and about 800 in Depew.

5. Region losing jobs

The Buffalo Niagara region continued to leak jobs throughout the year. As of October, the region had 2,900 fewer jobs than it did at the same time last year, according to state Labor Department figures.

The number of manufacturing jobs hit an all-time low of 82,400, a drop of 3,700 from the previous year. The slowing automotive industry was the culprit.

Overall, the region had 562,600 jobs in October.

Sectors that gained were service jobs, up 800 jobs to an all-time high of 176,000, and finance, insurance and real estate, up 500 to 30,800.

6. New Era strike continues

The strike at New Era Cap Co. in Derby started in July and quickly attracted national attention. Some of the interest stemmed from the company's high-profile clients -- major-league sports and many colleges.

Like any strike, the picket line has divided longtime friends, with some saying they simply cannot afford to stay out of work.

The company claims the 300-worker Derby plant is its most costly to operate. It switched work to its plants in Buffalo and Alabama since the strike began.

New Era is the last capmaker on U.S. soil. The question remains: Can such an industry exist in America in the age of the global work force?

7. Rich Products investing

Rich Products moved to solidify its presence on Niagara Street, announcing in November a $35 million plan to modernize its operations. The company will invest in new computer systems for manufacturing and order fulfilment, and expand research and development operations and its information technology department.

The 56-year-old Buffalo plant manufactures whipped toppings, puddings and the liquid base for "smoothie" drinks. The family-owned food products company has plants in eight countries and annual sales of $1.6 billion.

8. Economic development targets expand

The Erie County Industrial Development Agency got new leadership and broadened its mission. County Executive Joel A. Giambra nudged longtime ECIDA chief Ron Coan out in April. The following month, Thomas Kucharski, president of the Buffalo Niagara Enterprise regional marketing group, stepped in as interim director. In June, Jim Allen, who has been running the successful Amherst IDA for years, agreed to help steer the Erie County IDA, too.

The region's IDAs soon agreed to a common set of operating principles and allowed development applications to be funneled through the Erie County office.

In December, the ECIDA approved tax incentives and grants for two golf course projects, signaling a much broader interpretation of the agency's mandate. No longer would it help only manufacturing operations. Now, any project deemed to improve the local quality of life, and thereby make the area more attractive for businesses, would be considered.

9. Buffalo Niagara Enterprise recalibrates

The highly touted Buffalo Niagara Enterprise, the five-year national marketing campaign designed to raise the profile of Western New York as a place to locate and expand businesses, had to readjust its target goals this year. The ambitious mission of creating 50,000 net new jobs during five years was dropped.

The five-year marketing campaign will measure success based on six factors, including survey results, project activity, business investment, job growth, per-capita income growth and population growth.

The BNE has $5 million in funding commitments from area companies and some government entities.

10. Albion lands a banking center

When Washington Mutual, a giant West Coast bank, announced it was buying Dime Bancorp, a chill settled over Albion in Orleans County. Dime has a mortgage service center there that employs 450 people, making it the county's largest private employer.

Right away, local, state and federal officials began lobbying Washington Mutual to keep the Albion center open. In November, Washington Mutual announced it would set up its East Coast service center in Albion and add 450 jobs during the next three years.

JAMES P. McCOY/Buffalo News
The University at Buffalo's Russ Miller with a supercomputer monitor.
The university's computing power is a key factor in the hoped-for
advent of a bioinformatics industry in Buffalo.

<
Search again: