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|Eisenstadt: Guide plant prospect would yield big dividends for area|
In the 18 years that ULM's Dr. Robert Eisenstadt has lived in the area, he has not seen an economic factor as big as the proposed automotive assembly plant that's considering locating in old Guide Corp. building off Interstate 20 east of Monroe.
The automotive assembly plant in question was surfaced late last week when outgoing Gov. Kathleen Blanco discussed it at a luncheon in Baton Rouge.
Eisenstadt, an associate professor of economics, said the proposed auto manufacturer could be a "virtual replacement of Guide," which closed its operations in 2007.
Blanco said she expects the automobile manufacturer, which has not been named, will move into the former Guide plant and initially employ 200 people. She said the company could employ 800 within five years.
However, the agreement between the state and the manufacturer is "not a done deal," The Ouachita Citizen was told last week.
"I'm always reluctant to talk about something before the ink is dry, but the governor is touting this pretty heavily and I don't think she'd be out there front and center unless she was pretty darn certain that this thing would happen," Eisenstadt said.
Northeast Louisiana has been due for some good news, Eisenstadt said, after Guide shut down in 2007. Also, State Farm closed its regional offices here in recent years.
The combined effect of those two companies vacating the area was a $200-million hit on the local economy, according to Eisenstadt.
"Our economy obviously doesn't appear to be in nearly as tough of shape as we predicted," he said. "The reason for that is nothing stands still."
"We made those predictions with the assumption that everything would stay equal, and nothing would come down the pipe," Eisenstadt added.
Several opportunities opened up in the retail sector here, though, and one of the biggest draws was Accent Marketing, which recently opened operations in the former State Farm facility on U.S. 165.
"Those employment gains have offset some employment losses," Eisenstadt said. "However, they have not entirely offset the loss of payroll income."
"The average job at Guide and State Farm probably paid well in excess of $40,000 a year," Eisenstadt continued. "The jobs that have come along -- they're not paying near that amount, maybe $20,000 to $25,000 a year."
"If you look at actual wage and salary employment in northeast Louisiana, we're down probably 2,000 jobs from a few years ago," he said.
Eisenstadt said the automobile assembly plant is huge news for the area since it appears it will provide high-paying jobs, and produce a product that can be exported, which will bring in more income from outside the area.
"We know this is an automotive manufacturer," Eisenstadt said. "We think it will be a specialty car manufacturer like the smart cars over in Europe.
"This is an economic developer's hat trick. We expect it to be a high-tech manufacturing facility that will produce a very high-valued added product that is destined for export well outside the Monroe economic service area.
"The fact that it expects to employ up to 800 over five years puts them well in the category of a labor-intensive production process. Hence, it's reasonable to expect this facility to pay high wages. We don't know that for certain, but that's our expectations.
"This is a very good thing for the area. I cannot comment on the payroll size, or the economic impact, because we don't know what the numbers are, but if they have 800 jobs and they pay on average $40,000 a year, that's a $32-million payroll. You can probably roughly double that and that would be the approximate affect on household income in the area.
"Now, that's a very crude approximation. But one of the nice things about this is it holds the promise of being an employer that will not just provide high-paying opportunities to local residents, but it also is the kind of plant that would attract potential employees from outside of the area," Eisenstadt said.
One of the things that northeast Louisiana is sorely lacking, he said, is in-migration. He said northeast Louisiana has a very anemic population growth pattern, which typically causes home prices to languish. However, if the proposed assembly plant draws skilled workers from outside the area, it will only boast the housing market.
"In the best of all worlds, when you lose a major employer like the Guide plant, you replace that loss with a company with similar, if not equal, impact," he continued. "What little we know of this particular plant, it holds the promise of a near virtual replacement of the loss of Guide."
"That is an extremely fortunate turn of events," Eisenstadt added.