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Will unfinished aerospace plant finally take off?

Arkadelphia Area Hopes Green Light Coming Soon for $25 Million Complex

Clark county boosters have gained new hope that a mothballed factory which never opened for business will finally begin production.

They are expecting to receive word this summer on what officials at Rohr Inc. intend to do with their dormant plant in Arkadelphia.

"We have been in contact with them on a routine basis," says Percy Malone, president of the Clark County Industrial Council. "We were told they would make a decision about what they are going to do by July or August."

Rohr, an aerospace company based in Chula Vista, Calif., was formally welcomed to Clark County at a public announcement on Feb. 24, 1992.

About 75 percent of the planned 225,000-SF plant was built, but none of the equipment was installed in what was to be a $25 million facility employing 150 workers by 1995.

The company halted completion of the 65-acre development when aircraft part sales nose-dived. Executives had to take drastic steps to try and return Rohr to financial stability.

Those measures have included jettisoning hundreds of employees. The corporate payroll has dropped by more than 50 percent in the last five years.

The 300-member workforce at Rohr's two other Arkansas plants in Heber Springs and Sheridan have felt those cuts less keenly.

Most of the layoffs have impacted operations in southern California, where Rohr expects to lighten the corporation by 300 more jobs.

Bad News, Good News

Where is the glimmer of hope for the unfinished Arkadelphia plant amid all this fiscal damage control?

First, industry analysts are optimistic Rohr is not in an irretrievable dive and should survive to profit from an expected rebound in the commercial aircraft market.

The number of worldwide jet passengers is projected to double by 2005 and triple by 2013, and that will mean lots of new planes. Rohr makes parts for about 85 percent of today's fleet of large passenger aircraft, and sales should take off accordingly.

Second, Rohr executives are increasingly disenchanted with some of their West Coast operations. Sales fell by 20 percent to $918 million in fiscal year 1994, and 1995 figures are forecast to tumble to between $775 million and $800 million.

Rohr leadership has vowed to continue slashing costs to reach a 30 percent goal. That could result in production and jobs landing in Arkadelphia and at other plants.

Robert Rau, president and CEO of Rohr, has confirmed that plant closings in California are a real possibility. Such a public stance makes for a nice bargaining chip as the company enters negotiations for a new labor contract with its machinists union.

The specter of relocating work to a right-to-work state like Arkansas raises the ante, especially with a mostly complete plant waiting in Arkadelphia.

Late last year, a consulting firm representing an industrial prospect asked if the Rohr facility in Arkadelphia was for sale. Company officials at Rohr said no.

"That gave us more confidence they were looking at getting the facility open for production," Malone says. "We don't know what their decision will be. We're hopeful more than encouraged that they will get this facility open."

The decision not to sell by the hard-pressed company bodes well for Arkadelphia, at least for the short-term. If Rohr does finally set up shop in Clark County, the good news trumpeted three years ago will be welcomed once again.
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Title Annotation:Rohr Inc.'s mothballed plant in Arkadelphia, Arkansas
Author:Waldon, George
Publication:Arkansas Business
Date:May 8, 1995
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