Area jobless rates are roughly double what they were a year ago.

By Don Shilling | March 25, 2009 at 12:00a.m.

The recession is so brutal that even prosperous local companies are cutting jobs to save money.

City Machine Technologies, a Youngstown company that rebuilds and repairs industrial equipment, posted record sales of more than $10 million last year. Now, it has nine of its 84 workers on lay off, including three who were furloughed last month.

Sales are running about 25 percent behind last year’s pace because power plants, steel mills and other factories have reduced their spending, said Mike Kovach, company president.

“We’re trying to be optimistic, but we’ve had to make small cuts in our budget and in our work force,” he said.

Cutbacks at companies such as City Machine Technologies are creating high unemployment in the Mahoning Valley.

Figures released by the state Tuesday showed that jobless rates in February were similar to those of January, when rates jumped to their highest levels since the early 1980s.

Area jobless rates in February were:

• Mahoning County, 12.6 percent, down from 13.4 percent in January.

• Trumbull County, 14.5 percent, down from 14.8 percent.

• Columbiana County, 13.2 percent, up from 12.8 percent.

The jobless rates are roughly double what they were a year ago.

In Pennsylvania, Lawrence County’s jobless rate was 9.3 percent in January and Mercer County’s was 9.2 percent.

Bill Turner, administrator of the Trumbull County One-Stop, said he’s hoping the Mahoning Valley’s stable numbers from February, though bad, are an indication that the local economy isn’t getting worse. He doesn’t want to see a return to 1982, when Trumbull County unemployment rates reached 24 percent and Mahoning County rates hit 21 percent.

“Maybe the tourniquet has been applied, and we can start healing,” Turner said.

He admitted, however, that recovery is a tall order when the area’s larger manufacturers are hurting.

For instance, Severstal Warren has shut down steel making at its Warren mill for an indefinite period and has nearly 1,000 people laid off. General Motors is in the process of laying of 2,800 workers at its Lordstown complex as it cuts car production from three shifts to one.

Those who are laid off are having a tough time finding work, he said.

No one is conducting large scale hiring, and one strong area of growth locally — health care — has been thrown into uncertainty with the bankruptcy filing of Forum Health, he said.

“It’s just a matter of right place at the right time. There are some openings here and there,” he said.

Turning Technologies of Youngstown was a company that was adding workers steadily until corporate spending ground to a halt at the end of last year. The company, which produces hand-held response devices and software, laid off 29 of its 166 workers in January because its 2008 growth rate wasn’t as much as expected.

Mike Broderick, company president, said one of the laid-off workers has been brought back. Turning Technologies, which had $30.7 million in sales last year, expects to increase that by 10 percent to 12 percent this year. If the economy rebounds and sales exceed expectations, then Turning Technologies will need to add workers, he said.

Exal Corp. was another job-producer in Youngstown in better times. The maker of aluminum cans and bottles added about 100 jobs in 2006 and 2007 after building a second plant in the Salt Springs Industrial Park.

The recession has caused the company to delay plans to build a third plant, but Exal has been able to keep all of its nearly 400 employees working, said Brenda Oman, company vice president of finance and administration.

“Our products sell for between $3 and $10, so someone who can’t go out and buy a refrigerator or a car can buy hair spray and feel better about themselves,” she said.

Many manufacturers don’t have a strong order book like Exal. Turner said the One-Stop office is continuing to receive calls from area manufacturers who are laying off workers because of slow sales.

Consumers and businesses nationally will have to start spending for these companies to see a pick up in orders, he said.

Kovach said some orders at City Machine Technologies were supposed to be completed by now, but the customers have pushed them back to later this year. In some cases, his company has completed orders, but the customers have asked him to hold off on delivery so they can delay payment.

Not everything is bad, however, Kovach said. Some steel mills and other factories that had planned to shut down for maintenance are continuing with those projects, which means business for his company.

“It’s not all gloom and doom,” he said.

shilling@vindy.com