Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, February 8, 1991 TAG: 9102080837
SECTION: VIRGINIA PAGE: A-1 EDITION: EVENING
SOURCE: GEORGE KEGLEY and MARK LAYMAN STAFF WRITERS
DATELINE: LENGTH: Medium
Earl C. Smith, an Allied-Signal vice president who has spearheaded development of the company's Bendix Automotive Systems Group plant at Glenvar, said the company was considering three alternatives: reducing the size of the project, manufacturing a different product line at the site or canceling the project entirely.
The brakes that were to be manufactured at the Roanoke County plant as soon as next year will be shifted to another Allied Signal plant, Smith said at a news conference this morning at the Roanoke County Administration Building.
"I believe the odds are very good that we'll do something here," Smith said. Allied-Signal already has spent more than $1 million for design, site preparation and purchase of land for the plant.
Allied-Signal's contract with Roanoke County requires that construction begin by July. Smith said it was unlikely that deadline would be met and the company will discuss the matter with county officials.
Roanoke County Administrator Elmer Hodge said Allied-Signal is the county's "preferred customer," but the county will market the site to other companies in case Allied-Signal decides to cancel the project.
"I don't think the site will be there long," he said.
Roanoke County spent $800,000 to buy the 177-acre site for Allied-Signal and was ready to spend another $600,000 to extend water and sewer lines to the site. Hodge said the county would go ahead with the utility work.
The plant would have employed 30 people at its opening and as many as 300 by 1995, according to the company's original plans.
Smith said the company has to move the first brake production contract to another facility to meet its schedule with automobile manufacturers.
But he said a slowdown in automobile sales, war in the Persian Gulf, uncertainty among consumers and a reduction in capital spending by Allied-Signal led the company to its decision to halt construction.
Allied-Signal's fourth quarter earnings were down, forcing the company to pull $200 million out of its capital spending plan.
Smith said other products the company might manufacture at the Roanoke County site included hydraulic boosters and master cylinders.
Smith said the company also may consider the location for its aerospace or engineering groups "before we give up the site."
Speculation about the future of Allied-Signal Automotive's plans had been widespread in the two weeks since the Southfield, Mich., company announced last month a delay in construction.
The automotive products firm put the site development work, being done by H & M Construction of Nashville, on hold. The company cited uncertainty of the business environment during the economic downturn and the Persian Gulf crisis as reasons for halting the construction.
Thomas Bros., a Salem excavation company, had done almost 15 percent of the grading for the 190,000-square-foot building when the hold was ordered.
A strong suggestion that Allied-Signal might proceed with some type of project came with the recent announcement that Smith, vice president of program management for the Automotive Systems Group, will be the speaker at the Regional Partnership's annual meeting on Feb. 21. Local business leaders did not expect to hear from Smith if the company were abandoning its plans entirely.
by CNB