While Washington was absorbing the shock of discovering itself to be no longer recession-proof, in more industrial Maryland and Virginia the recession that began in mid-1981 was being played out in relatively predictable ways.
In Baltimore, where Bethlehem Steel and General Motors are major employers, the slowdown in the economy has taken its toll. In Virginia, industrial employment declined approximately 17 percent, or 2,500 jobs, but defense spending helped bolster the state's large shipbuilding industry.
And in both states, the recession has put on hold new investment and expansion that were anticipated.
"We don't have any numbers for 1981, but the feeling is that while there was not as much capital investment as in 1980, there was probably as much job creation potential," said Maryland's director of economic and community development, James O. Roberson.
"In 1982, obviously some people are going to do very well--defense-oriented people," he said. "But I don't see anything that looks terribly promising for steel or auto or appliance parts. As long as we stay in the kind of national economic doldrums we're in, those three probably are not going to have a good year."
A few years ago, Maryland announced with much fanfare that it planned to lure computer-related industries from California. Since then the semiconductor industry, which makes the chips that run more and more of the world, has suffered layoffs in the face of reduced demand and increased competition from Japan.
"We're continuing to have awfully good prospects, but they're caught up in the same doldrums that other people are," Roberson said. "This is not the best time in the world to persuade anybody to do something."
The sluggish national economy, high interest rates and conservative capital expenditures slowed down growth in Virginia, said Hugh Keogh, director of the marketing division of Virginia's industrial development office. "I think it will be the second half of 1982 at the earliest before we see much movement, and, in terms of major investment for plants and equipment, the whole year may be slow."
One development which would help considerably would be if Adolph Coors Co. were to move forward to build its $500-million brewery in the Shenandoah Valley. Coors officials have delayed the start of construction but assured Virginia officials that they will eventually build.
The brewery would mean about 2,000 jobs, Keogh said. "That alone would have brightened the jobs picture in Virginia this year. It would have taken the jolt out of it."
While traditional manufacturing was in a slump, there continued to be growth in research and development and the location of national headquarters and wholesaling centers in Northern Virginia. That activity created 1,800 new jobs in 1981.
"It may be that the employment base is shifting away from what it was in the 1960s and 1970s, which was manufacturing, to service-oriented jobs," Keogh said. But the state still must attract industrial jobs, particularly to rural areas where unemployment is high.
One major change occurred in Virginia in 1981. For the first time most of the new jobs created were in urban areas, such as Norfolk-Newport News, Richmond and Northern Virginia, Keogh said.
Here is the outlook for major employers in Maryland and Virginia:
* Bethlehem Steel--Like other steel producers, Bethlehem has been hard hit by foreign imports, which have accounted for more than 20 percent of the domestic steel market in the past few months. At its high point, the company had 17,500 employes in its Sparrows Point plant, but layoffs have temporarily done away with 1,550 of those jobs. Although the plant's general manager, Russell R. Jones, announced recently that the plant was resuming some operations, he added that it was not a signal that orders had increased suddenly. The company plans a $750 million modernization of some of its steel plants over the next four years, with half of the projects covered in that planned for Sparrows Point. They include modernization of plate mills, modernization of a 68-inch hot strip mill that makes long steel coils, and installation of a continuous slab caster. All three projects are under way.
"Hopefully that will allow us to sell more steel and be more competitive, which will make us capable of providing work for our employes," said a spokesman at Sparrows Point, but he said that there was no way to anticipate the impact of modernization or the number of jobs there.
* General Electric--In Virginia, employment in G.E.'s seven major plants with more than 13,000 workers is expected to remain static until the economy begins to improve, a G.E. spokesman said. In Maryland, where there are more than 4,000 workers in various plants, headquarters facilities and sales and service offices, the outlook is mixed.
At G.E.'s plant in Columbia, which manufactures ranges and microwave ovens, employment will be influenced by whether housing starts go up and whether consumer spending improves. At the Rockville headquarters of G.E.'s Information Services Co., a moderate increase is expected.
* General Motors--At G.M.'s Baltimore plant, the recession is an old story. Always one of the first industries to suffer, the auto industry has been in a slump for a long time. Approximately 3,000 workers have already been laid off there, some 2,000 of those since December 1979.
"The plant has been relatively hard hit over two years. We don't look for the situation to get any worse," said William H. Noack, regional manager for public relations. The company hopes to be able to bring back a second shift of workers to add to the single shift it is running at the plant now.
"It's an iffy situation. It depends on car sales," Noack said. "We have said we hope it would happen by spring of the year, but it's a day-to-day thing."
In addition to the layoffs in Baltimore, G.M. has also laid off about 160 salaried workers in other operations in the Washington area. The company announced Christmas Eve that it was laying off 2,900 workers in the Baltimore plant, but only for a week. Last week G.M. said it would lay off indefinitely 88 of 236 workers in a small plant in Fredericksburg, Va.
* Newport News Shipbuilding & Drydock Co.--The surge in military spending has not yet produced an increase in orders for the company, Virginia's largest employer. But military contracts are keeping the shipbuilding firm healthy, helping it to sail above the recession.
Right now the company has under contract or under construction two aircraft carriers, 10 submarines and one commercial ship for Union Carbide. The shipyard's last commercial ship was built in 1979, but since then the company has "jumbo-ized' four other commercial ships, said Tom Olds, corporate information manager. While the commercial market has fallen off, the military business has kept the level of activity at the shipyard up, he said.
Net sales and operating revenues in the first nine months of 1981 were $800 million, up from $640 million the year before.
In the past three years, the shipbuilding company has spent $170 million in capital investments, including some improvements that put it in a good position to take advantage of the increase in military spending. In 1981, the company doubled its capability for submarine overhaul and spent more money on a machine shop in Asheville, N.C., that works on submarine overhaul.
An agreement with the U.S. Navy for accelerated construction of one of the aircraft carriers may mean bonus pay for the shipyard if it delivers ahead of schedule, Olds said.
In recent years, Newport News has done several things to try to make it less vulnerable to swings in the economy, Olds said. Among those efforts, the company has improved its marketing operations, and its subsidiary--Newport News Industrial Corp.--takes technology learned from building nuclear ships and applies it to the commercial power generating industry, he said.
The shipyard also sells its excess capacity to other, including using its exotic foundry to do specialized casting for other shipyards.