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Florida Power layoffs jolt economy

Effects of the 62 layoffs, triggered by a merger, will ripple throughout the county, experts say.

By ALEX LEARY

© St. Petersburg Times, published February 4, 2001


Watching the economy trip and tumble toward a recession has been a little like watching the Persian Gulf War.

Each night the casualties pile up -- Sears, JCPenney, Montgomery Ward, DaimlerChrysler, Xerox -- but from the living rooms of Citrus County, the grimness has seemed remote, if surreal.

Suddenly, though, things do not look so sanguine.

Last week, the county's largest private employer, Florida Power, laid off 62 workers and Scotty's announced it was closing its hardware stores in Inverness and Homosassa.

A few days earlier, Metal Industries said it was closing its Crystal River manufacturing plant after 22 years, leaving 50 employees with uncertain futures.

"Before, it was almost like it's happening but we don't feel the impact," said Paul Danner, president of the local Regions Bank branches and a member of the county's Economic Development Council.

"But now we will," he said. "These are our neighbors; we see them in church, we see them shopping. At some point we're not going to see some of these people anymore."

Citrus County never has had a stellar economy, in part because of its large retirement population with fixed incomes and its relatively rural landscape. But the economy has not been a disappointment either.

Longtime residents say the collective layoffs, which include those at Pro-Line Boats last fall, could be the first signs of real trouble.

The county has little industry, so the loss of jobs, even if only a handful, can have a greater effect because these workers may be left with few employment options.

"This is the first time in my adult life that I've seen anything of this magnitude happen in this area," said Ed Tolle, a longtime business leader and former Crystal River City Council member.

"When the nuclear power plant was built, everybody expected a lot of increase in growth, and that's what happened," Tolle said. "The job security in the county has always been ascending rather than going down. It's going to be an interesting thing to see what happens."

The loss of Florida Power jobs is particularly troublesome, Tolle and others say.

"It really is an economic dose of cold water," said John Jendro, a financial planner and former Florida Power spokesman. "It won't bring the county down but it's an indication of the changing economic times."

The workforce reductions at Florida Power were triggered by a merger with Carolina Power & Light. When the $5.3-billion takeover was announced in August 1999, the Raleigh, N.C.-based utility said it would cut $100-million, largely by eliminating duplicate jobs.

Some jobs in Crystal River would have been lost regardless. The nuclear plant increased staff to deal with regulatory shutdowns in 1996 and 1997 but those issues have been resolved, officials say.

Since the merger, 160 jobs have been trimmed from the Crystal River plant. Some people left for other jobs and some retired -- but a good portion were squeezed out. And more layoffs are imminent at the four coal-burning plants.

Firm isn't abandoning area, officials say

Florida Power's presence will continue to be felt.

It still employs more than 1,000 people in the area and, officials say, will remain deeply involved in community affairs, from schools to civic organizations, giving generously to charitable causes.

The corporate donation to the United Way was $12,000 last year, but contributions from employees dropped by $32,000, executive director Dawn Arline said. Arline attributed the slump to anxiety over job cuts.

She is optimistic that the levels will increase because the new owner matches employee contributions.

Florida Power spokesman Mac Harris said the people who were laid off this week represented a range of experience. He declined to release average salaries but employees said the range was between $20,000 and $80,000.

Harris played down the significance of the layoffs. "If we said we're shutting down this plant site, that would clearly be a major impact to this area," he said. "I think the impact on the overall area is going to be relatively small because you have a fairly robust economy in this area."

Still, much of that strength is drawn from Florida Power. Its employees, among the best-paid in the county, spend their paychecks at local grocery stores, movie theaters, beauty salons, restaurants, gas stations, and other businesses.

"We'll have to find somebody to fill that void," said William Bunch, owner of Oysters restaurant in downtown Crystal River, a popular lunchtime destination for Florida Power employees.

University of Florida economist David Denslow said that if the 62 Florida Power employees represent a payroll loss of $1-million, the actual effect on the community would be twice that.

It's known as the multiplier effect. The idled workers will continue to buy food and essential items but they will likely hold off on big-ticket items, like new cars or furniture.

Fewer sales at automobile dealerships and furniture stores may mean sales workers lose jobs, and they too must curtail spending until a new job comes along.

"Thank God we've already done our home improvements," said Connie Dearing, 53, a clerical worker who was among those laid off at the power plant. "The little extravagances that everybody takes for granted, like going to the movies and to restaurants, I won't be able to afford now."

The changes also influence those with jobs, Denslow said. People see their friends being laid off and ponder their own future. They also may spend money more conservatively.

"Citrus County is going to weather this shock," Denslow said. "It's a pleasant place to live and other employers will move in. But it takes a while."

Other companies have shown an increasing interest in Citrus. But in recent years, many of the larger employers have been discount stores, such as Home Depot, Wal-Mart and supermarkets. These businesses generally pay lower wages.

The Suncoast Parkway, which opens today, may extend into Citrus and could bring with it a population boom and better jobs. The road already is under attack from environmentalists.

Layoffs' effects may reverberate in county

The loss of Florida Power jobs could reach beyond the obvious financial benchmarks. Tolle, whose family owns a real estate agency, fears a glut of more expensive homes that may be out of reach of retired couples or blue-collar workers.

An oversupply of homes could depress the market, and reduce home values, Tolle said.

Harris, however, disputed that assertion. He noted that Multiple Listing Service recorded 2,500 home sales last year. That's a 10 percent increase from the previous year. Permits issued for new single-family homes also increased last year.

Schools could also be affected. Children of former Florida Power and Metal Industries employees may have to attend different schools if their parents leave the area for new jobs.

"The kids are going to have to make new friends at a critical time in their life," said Greg Rushton, who worked at Florida Power for 21 years before being released Monday. "It could change their whole direction in life. I'm not saying for the bad but it's something they are going to have to overcome."

Florida Power employees always have been involved with the schools, serving as mentors and lending their professional expertise.

Several teachers have spouses who work at the power plant and the district fears that some will move away.

The district also has been contacted by several former plant employees who are interested in teaching jobs.

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