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Today’s Topic: Allentown Mulls Mack Pullout Originally moved for PMs

February 6, 1986

ALLENTOWN, Pa. (AP) _ Jim and Deb Kratzer’s house, a brick three-bedroom place with a refinished kitchen and a new patio, is for sale. For nine years they’ve lived there, less than a mile from the Mack Trucks assembly plant where Jim has worked, but now that’s all changing.

″We feel we’ll have to move out of the area if we want anything permanent,″ said Mrs. Kratzer, seated in her living room where a tabletop ashtray is decorated with the trademark Mack bulldog hood ornament.

About 1,800 people have jobs at the plant, where Kratzer was laid off in November. ″Everybody wants to work for Mack Trucks. They had good benefits and good pay,″ he said.

Citing the United Auto Workers’ unwillingness to give up enough of those benefits and wages, Mack is pulling up stakes for its assembly operation here. By mid-1987, Mack plans to have a new plant operating in South Carolina.

The decision leaves such families as the Kratzers, both 32 and natives of Allentown, mulling whether to move their three children to South Carolina or elsewhere from a community that is steadily moving away from manufacturing.

Mack Trucks Inc., the nation’s No. 2 maker of heavy trucks, has been a part of this area for 80 years. It’s so much a part that each year, Lehigh County’s first dog license goes to a 5-foot model of the bulldog ornament at Mack headquarters.

A few hundred yards from the world headquarters is the 60-year-old factory known as 5-C, which for the last 20 years has produced a line of trucks that Mack plans to phase out for a new line next year.

Renovating the ″outmoded and inefficient″ factory would be too costly, the company says. To replace it, Mack plans an $80 million, ″state-of-the- art″ factory capable of producing 70 trucks a day with about 1,000 employees. The 5-C plant these days turns out 41 trucks daily with its 1,800 workers.

Mack said the UAW refused wage and benefit cuts needed for the plant to be built within 50 miles of Allentown.

″We’re going to be very hard-hit,″ said Josh Tucker, manager of Jaetees gift store in downtown Allentown. When Mack workers find themselves out of work or in lower-paying jobs, he said, ″They’re going to be hard-pressed to buy things of necessity - food,″ and to pay rent.

Kratzer, who proudly wears a UAW ring, said some people criticize Mack workers’ pay.

″We’ve heard people say to us, ’Good, it’s about time you guys take a cut,‴ he said, but added that the critics had applied for Mack jobs and weren’t hired.

The company demanded a cut of $2.04 in an average hourly wage and benefit package of about $23 - a cut that would have applied to all Mack UAW contracts, not only the Allentown employees.

The union also told its members Mack demanded that its workers accept any cuts UAW workers might take at No. 1 heavy-truck seller Navistar, formerly International Harvester Corp., in negotiations next year. Mack spokesman William McCullough declined comment on that and Mack chairman John Curcio declined to be interviewed.

Based in Allentown since 1905, Mack says its headquarters and Research and Development Center in Allentown and an assembly plant at Macungie will not be affected by the new plant decision.

″There’ll be a lot of hard feelings for awhile ’til everyone gets their lives in order,″ said Mrs. Kratzer, who was laid off from her job with AT&T the same month her husband was laid off at Mack. She gets some part-time teaching work. ″Some of us are young enough to be able to move.″

Before Mack announced it was pulling out, the union said 2,500 workers were laid off from 5-C and Mack’s Macungie plant, where 1,600 are employed.

″Obviously the amount of wages being lost here is going to have a significant spinoff effect here,″ said Don Bernhard, Allentown’s community development director.

Further, the plant pullout will hit the tax rolls. Mack’s properties in Lehigh County and in Allentown have an assessed value of more than $18.3 million. The company pays annual real estate taxes of $265,000 to the county, $400,000 to the city and $725,000 to the Allentown School District.

Bernhard and Donald Benner, executive vice president of the Industrial Development Corp. of Lehigh County, said Mack workers who stay may be able to find jobs - but for less money, and in different fields.

Manufacturing jobs in the area were on a downward spiral before the Mack announcement.

Manufacturing employment in a four-county area including both Allentown and neighboring Bethlehem, home of Bethlehem Steel Corp., has fallen from 115,000 in 1974 to 87,400 last November, according to the state Office of Employment Security.

Still, over the same period, non-manufacturing employment rose from 140,400 to 177,100.

″There’s no question that there’s a transition going on here,″ Bernhard said.

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