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The Honolulu Advertiser
Posted on: Wednesday, December 7, 2005

Proprietors adapt to plant closings

By Joyce M. Rosenberg
Associated Press

NEW YORK — The news was painful and familiar for small-business owners in Doraville, Ga., when General Motors Corp. said it planned to close its assembly plant in the Atlanta suburb. They had already been through a GM closing in 2000, and the shutdown of a nearby steel plant.

But Tommy Galloway, who owns Galloway Hardware in Doraville, sounds optimistic about the future. The area has coped with change in the past, and so his small business has survived.

"It's going to affect Doraville for at least a while," said Galloway, noting that the GM plant is a big contributor to the city's tax revenues. But, he said, "we adapt."

GM's announcement last month that it would close the Doraville plant and 11 other U.S. facilities was followed by Merck & Co.'s news that it would shut down or sell five of its plants. The news obviously was unsettling for the small-business owners who depend on the big plants or their employees for their livelihood.

But a nearby plant closing isn't necessarily a fatal blow to a small business, even though there have been many stories over the years about towns that withered as their factories disappeared or military bases were dismantled.

The chances for the survival of a small business can depend on whether local officials are successful in bringing in other big employers, but also on how the company itself adjusts.

Galloway's business took a huge hit when GM shut its nearby parts center.

"They were one of our better accounts," Galloway said, estimating that he had between $10,000 and $12,000 in annual sales from GM. "It just went kaflooey all at once."

But Galloway's store has persevered amid an influx of new residents to the area. And he noted that other plant sites closed and sold off in recent years have been developed, helping other small businesses.

"People are talking about this being something similar, only bigger and better," he said.

Often the hardest hit when a plant closes are the restaurants, diners and bars that have been gathering places for workers before and after their shifts.

Cheryl Purifoy bought the Cardinal Cafe in Camden, Ark., around the time that International Paper Co. closed its plant in the town, in January 2001. "For the first six months after I bought it, it was really bad," she said.

Since then, business has improved, in part because diners are coming from an industrial park that has been developed in the past few years. But Camden's population has nonetheless declined as people moved away — it's been estimated that 1,000 jobs were lost when the IP plant closed.

Purifoy said she makes enough money to pay her staff of 16 and give herself a small living, but little more. Still, she said, "it's just me, so I don't require a lot."