Economists and manufacturing analysts suggest the time has come to think small when courting businesses to replace Sony Corp. after it pulls out of Westmoreland County.
Smaller companies, entrepreneurial ventures and specialty products manufacturers each could fill sections of the 2.8 million-square-foot plant in East Huntingdon, creating employment opportunities for Sony's displaced workers and others in the region, experts say.
"There's a difference in the manufacturing economy in this region today than there was 10 or 15 or 20 years ago. Our economy is not as tied to any large industry, like steel," said Larry Barger, director of the manufacturing services group for the financial services firm Alpern Rosenthal, Downtown.
"We're seeing a fair number of small manufacturers and a lot of entrepreneurial types that are more nimble and able to react to market conditions."
Following a trend of global belt-tightening, Sony Corp. on Tuesday announced drastic cuts in its work force that include shuttering the flat-screen production plant that employs 560 people. Meanwhile, another project planned for the Sony complex will not happen, and the future is uncertain for a second one.
Plans have been scrapped for an ethanol plant at the site of the former American Video Glass plant because officials from Commonwealth Renewable Energy LLC could not secure financing. The company in 2006 proposed building a 200 million-gallon ethanol plant at the former glass plant.
"The project has been put off. You just can't get financing for anything in this economy," said Stephen C. Frobouck, the company's president.
Although they remain positive, Westmoreland County development officials say they do not have a signed lease from Solar Power Industries for a power plant expected to create 1,500 jobs. Company representatives could not be reached for comment.
It's a sign of the times, according to experts who say companies around the world are unable to raise money and secure credit for all types of projects.
"These are grim times," said Hank Cox, a spokesman for the National Association of Manufacturers.
His colleague, economist Dave Huether, agreed, saying the worldwide economic slump has spread to most manufacturing sectors. Huether predicted a bleak outlook for the first half of 2009, sparked by a sharp decline in consumer confidence.
"People are pulling back on big-ticket items, like cars and boats and TVs," Huether said. "I think the next six months will be challenging for manufacturers, partly because the slowdown is extending globally."
Achieving long-term success always has been a challenge for companies housed at the Westmoreland County site, history shows.
In 1969, Chrysler Corp. built the frame, walls and roof of the plant but went no further with plans to set up a production facility. The site sat vacant until German automaker Volkswagen rolled into town nine years later -- fueled by a $100 million incentive package -- and opened its first U.S. assembly plant.
After a 10-year run riddled with frequent work stoppages, labor disputes and sagging sales, the automobile assembly line shut down for good. Sony took over the site in November 1990.
Now, local officials realize that bigger might not be better.
"Our goal is to make it a multitenant facility, rather than try to hit a home run and bring in one large owner," said Larry Larese, Westmoreland County's planning director. "My first choice would be to bring in manufacturing businesses because they would have the most value in terms of jobs and spin-off opportunities."
Larese envisions a multitenant center that would house firms in sections of about 200,000 square feet each. He said there is much work to be done beforehand, adding that it must be determined whether Sony will continue lease payments until it owns the site or give up the lease and have the property revert to the state, he said.
John Skiavo, president of the Economic Growth Connection of Westmoreland, a nonprofit development agency, said there would be an advantage to placing smaller firms in the complex because the community would not be as hard hit by the closure of a small business in the event of its failure.
For any small business to succeed, Pennsylvania must step up and help, according to Brian Kennedy, vice president of government relations for the Pittsburgh Technology Center.
Kennedy said the state, during this recession, should focus on increasing competitiveness, creating an attractive business tax structure and preparing a work force for jobs of the future. He added that the state should work to preserve jobs at small, family-owned manufacturers who can't afford losses from the economic downturn.
Chuck Ardo, spokesman for Gov. Ed Rendell, said the governor would consider tax breaks and incentives "on a case-by-case basis." He said the state will do "what is reasonable and responsible" in working to attract employers.
"The governor believes that in the economic downturn, it's especially important for the commonwealth to make strategic investments in the economy. So, we will do what we can as opportunities arise," Ardo said.
Experts insist the best opportunities might be in vastly different fields -- including alternative energy -- and considerably downsized from the plant's past occupants.
Robert Ady of Chicago, president of Ady International Co., represented Volkswagen in its search for a location three decades ago. He said it's unlikely a manufacturing firm of that magnitude would be interested in the facility again, even with the offer of incentives.
He predicted the Sony complex will be split up among a number of companies but added it would be suitable for warehousing space for a "big box" retailer such as Wal-Mart, Best Buy or Lowe's.
"I would say those types of companies are always looking for space, and what's nice about the Westmoreland site is that it's strategically located, from a market standpoint," Ady said, noting the site is close to densely populated East Coast markets.
DeWitt Peart, executive vice president of the Allegheny Conference on Community Development and president of the Pittsburgh Regional Alliance, said the site holds tremendous potential for alternative or renewable energy and suppliers for those industries.
"That facility, its location and the work force that's in proximity all fit nicely into what's being demanded in that sector," Peart said. "Companies that make solar panels, companies that make windmill components. ... We're seeing more interest in our region to manufacture that type of product."
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