Commentary: Traditional industries provide core strength to the economy

 In July 2018

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Commentary

Take it from somebody who knows a one-lane, unpaved road up the side of Wilkes County’s Brushy Mountain — yes, that’s kudzu creeping across it — GPS isn’t all it’s cracked up to be. So I wasn’t surprised a few weeks ago to find myself on a pot-holed backstreet near Greensboro’s Piedmont Triad International Airport. But I found something else there, too.

At Carolina’s 24-hour diner, sharing pintos and cornbread with big-rig mechanics, truckers and warehouse workers seated in sagging booths, it occurred to me that North Carolina hasn’t altogether outgrown its roots. And that’s a good thing.

Make no mistake, the state is on its way to the top in finance and high-technology. I was in Greensboro on assignment to write about an internet retailer that hopes to rival Amazon, and by coincidence, about the same time, plans were being firmed up for the e-commerce giant to build a 1-million-square-foot, $150 million, 1,000-employee fulfillment center just around the corner in Kernersville. Topping that, Apple is considering a massive office project in Research Triangle Park.

But here on the west side of Greensboro, old and new seem pretty comfortable together. Within earshot of the diner, 1,800 Honda Aircraft Co. workers build the category-killer HondaJet business aircraft. Compared with high-profile companies such as Apple and Amazon, it’s easy to overlook manufacturing’s contributions to the state’s gross domestic product.

The National Association of Manufacturers says we shouldn’t. North Carolina ranks fifth in the nation, with 460,000 manufacturing workers taking home an average $70,000 a year.

Yes, old-fashioned textiles are moribund, and tobacco in next-door Winston-Salem has pretty much been replaced by the techie Innovation Quarter. But look at the transportation and logistics industry.

Here on Regional Road in Greensboro, Ford and other automakers sell heavy trucks, vying for elbow room with shipping-software companies that make North Carolina one of the top logistics states. Just down the road in Thomasville is Old Dominion Freight Line, the nation’s third-largest trucking company, with revenue last year of nearly $3 billion.

The twist? One reason Amazon executives say they’re considering Kernersville is the Triad’s strong transportation industry. That includes shipping giant FedEx and companies such as Old Dominion, both transportation mainstays.

Once I had the Greensboro epiphany, I noticed similar patterns elsewhere. A week later, the forests and scattered farms of the South Mountains and western Burke County unfolded along crossroads named Gilkey, Union Mills and Glenwood. Pioneers said a squirrel could walk across the state without touching ground.

Of course, these woods and fields are no joke to Steve Troxler, the state agriculture commissioner, who’ll tell you he chafes at agriculture’s place in the shadows of Big Tech and Big Banking. “It’s the top industry in North Carolina,” he says, perhaps bragging a bit because ag and manufacturing each pump close to $100 billion a year into the state’s gross domestic product. Both legacy industries employ about a fifth or so of the workforce.

Meanwhile, in Burke County, each passing logging truck serves as a reminder: Yes, the state’s once huge furniture industry has been battered, but it’s not dead. It still employs about 30,000 workers, and the state is the nation’s fifth-largest wood-products manufacturer.

Back in Greensboro, Carolina’s Diner sports vintage Gulf, Coca-Cola and Pepsi-Cola signs, and if you look hard enough, the green-and-white vinyl upholstery looks straight out of a ’59 Impala.

Nostalgia, however, is not in the economist’s lexicon. Thousands of the state’s manufacturing jobs, for example, are in meat processing — low-paying, often dangerous assembly-line work — and many of the logs on those trucks are headed to Asia, stripping Tar Heel forests in order to be sent back as furniture to compete with the state’s remaining furniture makers.

Still, much of the state’s core wealth remains supported by its bread-and-butter base. And those industries aren’t standing still. Not long ago, I saw how one of them is responding: In Beaufort, at 60,000-acre Open Grounds Farms, the biggest farm east of the Mississippi, I climbed up in the cab of a satellite-guided tractor that, hands off, can plant a row of corn a mile long without deviating more than 6 inches.

They sure could use it on Brushy Mountain.

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