Region must move beyond what's been Triad-and-true.

• Position: Economic Outlook

No part of the state has been immune to layoffs and plant closings, but the Triad, with its high concentration of manufacturing jobs, seems to have taken more big hits lately. UNC Greensboro economist Donald Jud discusses how his region finds itself in this position and what the future might hold.

BNC: What's going on in the Triad?

Jud: The short answer is that our traditional industries are in decline, being challenged from overseas competition. It has resulted in a substantial loss of jobs over the past two years. It's really not something new. But the pace has accelerated with the advent of NAFTA in '94 and then with this recession. So we've lost a substantial number of manufacturing jobs, basically in textiles, apparel, furniture and tobacco. We've lost jobs that are not likely to come back, and the prospect is that there are a lot more jobs that we are likely to lose.

How so?

Textiles, apparel and furniture still represent about 10% of the jobs in the Triad. We could lose over half of those jobs over the next five years. Of 632,600 jobs in the Triad, we could lose 31,600 jobs. They will be lost to the challenges of international competition.

Would scaling back NAFTA or changing tariffs help?

I am a free-trade person, so I think if you go down that road, that won't be a road to prosperity. It will be a road to further recession. Anything that we do in the area of restrictive trade agreements, other countries can retaliate against us. The president intervened and changed the tariffs on steel. Immediately, other companies complained because they couldn't get the cheaper, imported steel.

Before its recent merger announcement, R.J. Reynolds Tobacco said it was cutting about 1,600 jobs in Winston-Salem.

Most of these Reynolds workers are going to have reasonably attractive severance packages, and a good percentage are going to be able to take early retirement, which will certainly help. But if we are going to lose 1,600 to 1,700 jobs in Winston-Salem, that's going to hurt. Cigarette-manufacturing jobs are the hardest to replace. The folks who were making $40,000 to $50,000 are going to have a very hard time finding other work that will pay them as much as they were earning at Reynolds.

How can the region replace lost jobs?

The Triad has a very significant comparative advantage for any firms that sell and operate in the Southeast because we are at the juncture of four interstate highways, and we have the FedEx hub scheduled to open in 2009...