Left behind

There’s no going back, but some places can’t get ahead in the face
of forces that took away what they once had.
By Chris Richter and Frank Maley

Ken Burnette knows what’s in the long, narrow box the second he sees it leaning against a wall at East Coast Plywood Co. in Rocky Mount. “My golf club came!” he yells to his only employee, who’s sweeping sawdust and dirt off stacks of plywood. “My golf club is here!” Tan, with a full head of brown hair and wearing an oversized white golf shirt and khaki pants, he opens one end of the box and pulls the plastic from around the Callaway driver, inspecting it. He lines up a mock shot but doesn’t swing.

Behind him, an industrial saw slumbers untended in the middle of the factory floor. A machine for staining and finishing wood sits silent in a pitch-black side room. Plywood is stacked atop a pallet, Made in China stamped in black on the brown wrapping that binds it. Not long ago, East Coast Plywood had around 25 employees who turned out as many as 54,000 drawer bottoms a day for bedroom furniture. Customers included American Drew, Kincaid and Stanley Furniture. Broyhill accounted for about $1 million of its business each year, Burnette says, and annual sales reached $6 million. “Until about six or seven years ago, this place was absolutely humming.”

As American furniture companies shifted work overseas, his business withered — just one example of a local trend. From the first quarter of 1997 to the first quarter of 2007, Nash and Edgecombe counties — Rocky Mount lies in both — shed almost half their manufacturing jobs, a decline nearly 20 percentage points greater than the dip statewide. Burnette tried to adapt by making bottoms for kitchen cabinets, but his customer went out of business, leaving him with hundreds of thousands of dollars of inventory and a 50,000-square-foot mausoleum on a dead-end road about half a mile from Rocky Mount Downtown Airport. Now he just wants out. “I better [sell] it now, when my business might be worth something for somebody, instead of waiting for two or three more factories to shut down, and then my business isn’t worth squat.”

Manufacturing isn’t the only thing that has been leaking from Rocky Mount. At times, it has seemed the disorienting currents of global commerce — not to mention the floodwaters of Hurricane Floyd nine years ago — were slowly pulling down the entire city. It was built on tobacco, textiles and finance, and one of its homegrown businesses, Hardee’s, became famous throughout the South. But it lost not only its hamburger chain, but the headquarters of one of the state’s largest banks, many of its mills and its tobacco warehouses. Per capita income, adjusted for inflation, rose just 1.7% between 2000 and 2005 in Edgecombe and 2.7% in Nash. It increased 4.7% statewide.

Rocky Mount isn’t the poorest place in the state nor the only one struggling with a changing economy. Most of those places never had what Rocky Mount did — and maybe never will. But like them, it’s feeling its way toward a future where few things are certain. “We can’t go back,” says Patrick Woodie, vice president of business and natural-resource development at the N.C. Rural Economic Development Center. “It’s not simply a matter of replacing, job for job, the manufacturing jobs we’ve lost with new manufacturing jobs. It’s going to take a much more diverse, multifaceted approach to economic development.”

About two miles down Church Street from East Coast Plywood, a few cars and people move along downtown’s streets and sidewalks. Houses in the surrounding neighborhood look worn, and for a Tuesday afternoon, there are a lot of working-age people sitting on front porches. It’s no fluke. In October, Rocky Mount had the highest unemployment rate of the 14 metro areas tracked by the state Employment Security Commission.

Twenty-five years ago, downtown would have been bustling. In late summer, farmers would haul in bundles of golden leaf to be sold in cavernous warehouses around town. “Rocky Mount had a little bit different flavor during the months when the tobacco market was in full swing here,” says Mayor David Combs. Tobacco money not only fed farmers’ families and paid their bills, it nurtured two local banks, Planters and Peoples, which merged in 1990 to form Centura Banks, one of the 10 largest in the state.

But the economic landscape already was shifting. In the ’60s, shopping centers began luring retailers from downtown. The last big blow came when Belk closed its store and moved two miles to Golden East Crossing mall in the ’80s, Combs says. Change continued into the ’90s, as federal tobacco allotments were cut and tobacco warehouses, which operated on commission, started closing. Jimmie Smith, now a builder and developer, got out of the business in the mid-’90s. “You could see the writing on the wall.” Since 2001, most tobacco has been sold on contract, not at auction. “There’s not a pound of bright-leaf tobacco sold in Rocky Mount now,” says Eddie Baysden, CEO of the Rocky Mount Area Chamber of Commerce. “At one time, we were the second-largest tobacco market in the world.”

The departures of Centura and Hardee’s also were anticipated long before they happened. Royal Bank of Canada bought Centura in 2001, and many figured it was only a matter of time before it moved. Kel Landis was promoted from president of Centura to CEO of RBC Centura Banks, Royal Bank of Canada’s U.S. banking arm. But a year later, the bank paid $80 million to rename a hockey and basketball arena in Raleigh the RBC Center. A year after that, President Scott Custer, the bank’s No. 2 executive, moved his office to Raleigh. Landis left in 2004. Custer became CEO and stayed in Raleigh. A year later, the company moved its headquarters there. It wanted to be in a city with a better airport and bigger pool of potential customers, Landis says.

He’s quick to point out that RBC Centura has more jobs in Rocky Mount than Centura did. And the pressure to consolidate was so strong in the banking industry that Centura would have had a hard time remaining independent. Rocky Mount would have fared worse, he says, if Centura had been bought by a bank with a similar geographic footprint. Royal Bank of Canada needed Centura’s employees to grow in the U.S.

Still, the buyout took discretion away from local decision makers, and the move of RBC Centura’s headquarters completed the shift of top jobs out of Rocky Mount. Landis says Centura got the best deal it could for its hometown, but he won’t say that Rocky Mount is better off with more jobs and no headquarters. “That’s a hard one. I don’t know that I’d want to be quoted on that.”

The first Hardee’s opened in Greenville in 1960, but the headquarters moved to Rocky Mount a year later and stayed there four decades, even after the company was bought by Imasco, a Canadian conglomerate, in 1981, and by California-based CKE Restaurants in 1997. After Hurricane Floyd flooded Hardee’s Rocky Mount headquarters in 1999, CKE moved about half the jobs to California. Two years later, it moved the rest to St. Louis. “Hardee’s was a big thing,” says Mayo Boddie Sr., chairman of Rocky Mount-based Boddie-Noell Enterprises, Hardee’s largest franchisee. “They were big in the community. When they pulled out and went to St. Louis, nothing has taken their place.”

The hurricane wreaked havoc on the city’s economy. Some businesses never recovered. Baysden, the chamber chief, says water covered nearly a quarter of the city, and it took two years to clear storm debris from the streets. Floyd didn’t affect as many Americans as Hurricane Katrina would in 2005, but its effect on Rocky Mount was just as painful. “When you’re about to drown and you’re on the second story of your home waiting for a rescue boat from the fire department, I don’t care whether you’re in Rocky Mount, North Carolina, or New Orleans.”

Meanwhile, the city’s textile industry was shrinking as companies shut down or moved jobs offshore in the years after the North American Free Trade Agreement went into effect. Textile Prints closed a plant with 350 workers in 1999. Pillowtex shut down a bedding mill with 180 workers in 2001. That same year came one of the toughest closings of all — a 600-worker Texfi Industries woven-fabric mill. It didn’t help that it stood near the junction of Interstate 95 and U.S. 64, two important approaches to the city. “It looked like a ‘closed’ sign could go up at any minute, because our city looked like a Western ghost town,” Baysden says.

About 30 miles northeast of Rocky Mount is Scotland Neck, home to about 2,400 people. Like Rocky Mount, it’s struggling to find its place in the new economy. “The jobs that used to be there — the cut-and-sew operations, the textile companies, tobacco and manufacturing — are just gone,” says Landis, who’s also chairman of Foundation of Renewal for Eastern North Carolina.

Robert Partin is more optimistic. After college, he returned to Scotland Neck to teach school, and he later became a principal and coached football. He was mayor from 1997 to 2007. “The biggest challenge,” he admits, “is to just keep looking, keep a positive attitude and try to get people interested in coming to a small rural community with not a whole lot of a traffic and a lot of the benefits of living in a small town.”

Traffic in Halifax County should be getting easier to handle because the population declined 3.2% between 2000 and 2006, according to U.S. Census estimates. At least some of that decline is driven by a weak economy. The average real private-sector weekly wage in the first quarter of 2007 was 4% lower than in 1997. Nearly a quarter of residents live below the poverty line, almost twice the state average. And like many of the places strug- gling with economic change, the majority of the town’s population — more than 70% — comes from racial or ethnic minorities.

Most people commute to neighboring towns for work, Partin says, many to Caledonia Correctional Institution in nearby Tillery. Some jobs have come to town recently but not enough. In 2005, Air Boss, a Canadian air-compressor maker, opened a plant that employs about 40. In March, Carter & Mayes, a West Virginia-based uniform maker, said it would open a factory that would create more than 100 jobs by 2010.

Scotland Neck’s best opportunity to thrive might be in ecotourism, Partin says. He’s quick to talk up the Sylvan Heights Waterfowl Park and Eco-Center, a nonprofit for conservation, research and breeding that’s home to 170 species and the largest captive population of waterfowl in North America. Not a bad place to visit, but it’s not exactly Yellowstone. “Basically, what we’re doing is developing what we have,” he says. As in many small towns, economic development here starts from within and often is low-tech — even pre-industrial. Partin points to entrepreneurs who have started hunting preserves, including one in nearby Hobgood that has 20,000 acres and draws participants from all over the country.

Hunting and ecotourism might not produce the economic boost that, say, a big assembly plant would, but at least folks in Scotland Neck aren’t holding out for a large company to save them, the way many depressed small towns have. “For a long time, there was this sense that it wasn’t permanent. Something would happen. It could be turned around,” says Rick Carlisle, state secretary of commerce from 1998 to 2001 and managing partner of Dogwood Equity, a Raleigh venture-capital firm that invests in small companies, rural regions and small towns. Eventually, he says, people have come to terms with the change. “You weren’t going to be rescued by new investment. Rather than getting depressed about that, people became realistic about it and said, ‘If this is permanent, if this is where we are, what can we do now?’”

Rocky Mount’s boosters will tell you they’ve done plenty to revive the city. The number of jobs there has increased 5% since December 2004, though it’s down 2% from December 2000. The city still boasts one big homegrown business, restaurant supplier MBM, a private company that grossed more than $5 billion in 2006, according to Hoover’s Inc. Recent arrivals include a Cheesecake Factory bakery slated to employ at least 500 by 2010 and a West Corp. call center that employs 900. Crown LSP Group, a logistics company, occupies the old Texfi plant.

Hurricane Floyd destroyed the city’s oldest shopping mall, which stood empty seven years. Two years ago, it was knocked down, and last year, a Sam’s Club opened there. “That’s the last remnant of Hurricane Floyd that was standing, and it now is a beautiful new retail center,” Baysden says.

Rocky Mount isn’t bereft of so-called new-economy jobs that often pay better than old-line industries. Illinois-based Hospira, the largest private-sector employer in the metro area, has 1,800 workers making medical supplies such as syringes. The Milken Institute, a California think tank, ranked Rocky Mount’s high-tech economy fourth among 179 small cities nationwide in 2006. Its one-year growth ranked first. More jobs are on the way. In August, Aquantum Pharmaceuticals, a start- up, said it will employ 150 within five years making over-the-counter pain killers. There’s even a chance Nash County could wind up with the holy grail of Tar Heel industry hunters: an automobile assembly plant. In mid- January, rumors began making the rounds that Volkswagen was considering a 1,022-acre parcel along I-95.

There are positive developments downtown. An old tobacco factory is now a museum and an art gallery. And the city is redeveloping a section that once was the economic and cultural hub of black residents. Baysden talks of the city’s recovery from Floyd’s floodwaters as “the Rocky Mount Renaissance,” but Landis is less sanguine. “It has a lot of positive momentum now, but it clearly is not where it was 15 years ago when all those other companies were there.”

Much of the metro area faces a disadvantage in an economy that will demand better-educated workers. A 2007 report by the N.C. Department of Commerce says nearly a quarter of all new jobs in North Carolina during the next decade will require at least a four-year degree. Just 8.5% of adults at least 25 years old in Edgecombe County had one in 2000. Only two other counties in the state fared worse. Nash County ranked 26th with 17.2%. An effort by local leaders to nudge North Carolina Wesleyan College into the University of North Carolina system failed last year because UNC said the region didn’t have enough academically qualified students.

Those without four-year college degrees face a world of shrinking options in manufacturing — historically a safety net for high-school grads. They certainly won’t get job offers from Burnette.

At East Coast Plywood, he opens a closet in a darkened hallway. Stacked against a wall inside are about a dozen framed, golf-themed prints. His wife wouldn’t let him hang them in their house. Now he’ll have to find someplace else to put them. “Maybe if I was younger,” he says, “I’d go out and find another niche. But, at 56 years old, no.” He isn’t sure what he’s going to do, but he’s better off than most. He owes creditors nothing, he says. All that’s left is to get as much as he can for what’s left of his business. “This is my retirement.”

Chris Richter is a Raleigh-based freelance writer.