Posted: Jul 19, 2010 6:04 AM by Sharlee Barriere
Updated: Jul 19, 2010 6:05 AM
NEW ORLEANS (AP) - In the blink of an eye, the economic focus in
Louisiana has shifted from recession recovery to avoiding actual
and potential job losses piling up at a staggering rate.
And there's very little that the state can do: The tally is due
to the Obama administration decisions affecting petroleum, defense
and space - all coming together in a perfect storm.
For Louisiana, those sectors represent some of its best-paying
jobs. Thousands are at risk - and the task of replacing them, at
the same pay and in the same numbers in the foreseeable future, is
shaping up as a pipe dream.
Last Tuesday, Northrop Grumman Corp., faced with tighter
Pentagon spending and Obama administration priorities aimed at
Afghanistan and away from the Navy, said it would shut its Avondale
shipyard - the state's largest industrial employer with about 5,000
workers - in early 2013 after two military ships are finished.
Avondale already was the subject of concern, since the program
to build amphibious assault vessels will end in 2016, but Northrop
decided to build the last two vessels at Pascagoula, Miss.
Another source of misery is the deepwater petroleum drilling
moratorium in the Gulf of Mexico. The six-month "pause" that the
Obama administration insists on could kill the drilling business
off the Louisiana coast for years, industry and government
Of the 33 deepwater rigs in the Gulf when the Deepwater Horizon
exploded, two found new long-term homes in Egypt and off the coast
of Africa within a week - just as the industry promised would
Louisiana State University economist James Richardson said a
six-month moratorium could slash 18,000 to 20,000 jobs. With that
prediction, consider that the entire state, at the lowest point of
the post-2008 economic meltdown, had lost about 49,000 jobs.
On top of that, Treasurer John Kennedy says about a third of the
state's $210 billion annual economy is tied to petroleum in one
form or another.
The oil spill already has had a well-documented effect on
fishing and tourism along the coast. Quantifying a number is
difficult - the first state jobs report since the moratorium and
the full arrival of the spill is due out July 23 - but state
officials already have warned that it won't be pretty.
Then there's the end of the space shuttle program. Earlier this
month, the last external fuel tank expected to fly rolled out of
the Lockheed Martin Corp. operation at the NASA Michoud Assembly
Facility in New Orleans. By the end of September, only about 200
workers will still be around from a payroll of 2,700 in 2008 and
5,000 during the mid-1980s.
There's not much in sight for NASA either: The Constellation
space program, which was being counted on for 1,900 jobs at
Michoud, is the target of an Obama budget cut, though Congress will
have to go along.
We're not talking about minimum-wage jobs. Louisiana's annual
median income is about $28,000. Shipbuilders in southeastern
Louisiana take in an average $43,000. Many jobs in petroleum and
the space program soar into the hundreds of thousands of dollars.
The administration of Gov. Bobby Jindal has been courting new
business, and, according to the administration's count, secured
commitments last year to retain 7,900 jobs and eventually create up
to 21,400 new positions.
But all of the long-term recruitment in the world won't block
this funnel: As an example, just hours before Northrop Grumman
dropped the bomb on Avondale, Jindal announced that a satellite
telephone provider, Globalstar Inc., would move its headquarters to
Covington - with 490 jobs by 2018.
The state says it is working to find new business for Michoud,
as well as the General Motors Co. plant in Shreveport that will be
shuttered by mid-2012. Now added to that list is Avondale. The
state's congressional delegation is lobbying for new Navy business
for the shipyard - and some members are pushing to save the
But politics aside, what are the chances Louisiana's economy can
avoid a long-term flight due south?
"There is a national trend that most of the growth is in small
businesses," said University of New Orleans economist Janet Speyer
said. "When we lose a large business, we cannot necessarily expect
to replace their employees."