Trimming the deficit: Local job growth is slow, incremental

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Sunday, January 29, 2012
— Shortly after the start of the Great Recession in December 2007, Rock County suffered swift and severe job losses.

Drill down a little deeper, and the majority of job losses can be found in the county's manufacturing sector, long the county's economic bedrock.

Between December 2007 and November 2011, Rock County lost 8,800 non-farm jobs, according to the U.S. Bureau of Labor Statistics. That's a drop of 12.5 percent, far worse than the state as a whole, which experienced a 4.6 percent decrease in jobs during the same period.

While it's uncertain whether Rock County will ever fully regain its lost jobs, there have been gains in recent months as well as indications that companies are considering expanding or relocating here, economic development officials say.

About 5,000 of the local jobs losses—nearly 57 percent—came in the manufacturing sector. Statewide, the manufacturing sector contributed about 42 percent of the total losses.

Rock County's severe job losses primarily can be traced to two factors: the overall economic downturn and the collapse of the local auto industry.

As independent events, each would have been significant. When combined in 2008 and 2009, the job losses were catastrophic.

"Both shoes fell, and they fell at the same time," said James Otterstein, Rock County's economic development manager. "That really took a huge bite out of our manufacturing sector, particularly our durable goods manufacturing sector.

"We had nearly 30 plant closings in two years."

More than 3,000 jobs were lost with the demise of the local auto industry, anchored by the Janesville General Motors' plant and supported by its local legion of just-in-time suppliers.

Gradual gains

Local economic development officials such as Otterstein agree that the job losses were analogous to falling off a cliff: The drop-off was sharp, and the pain at the bottom was excruciating.

The recovery, they say, will be gradual, and there's evidence that it's started.

Several employers have added jobs in the last the last year or so. Several new companies have moved into the area. Unannounced deals are in the works to create even more.

In fact, Rock County added 1,700 jobs in the first 11 months of 2011. The year before, the county added 1,500.

Employers such as United Alloy, SSI, Prent, Evonik Goldschmidt and Data Dimensions all have added employees in Janesville. So, too, have Morgan Corp., Lowe's Millwork and HUFCOR.

Around the county, payrolls have grown at Kettle Foods, Stoughton Trailers, Freedom Graphics, Kerry Ingredients and Edgerton Gear.

"All of these businesses have added jobs," Otterstein said. "Granted, they go through cycles where employment levels fluctuate, but on balance the net job situation has been positive."

Most, he said, were done with little fanfare as companies added five or 10 workers. Others added 30, 70 or 110 over a period of months.

Other businesses have moved into the community and brought jobs with them. Melster Candies relocated from Cambridge to Janesville with 120 jobs and St. Mary's Janesville Hospital opened earlier this month with 325 new employees.

Fat Wallet fled tax increases in Illinois and moved its business and 55 employees to Beloit last year.

Still others are contemplating a move to Janesville.

The Janesville City Council has approved a tax increment financing package with the Walworth-based Miniature Precision Components that could lead to up to 90 distribution and light-assembly jobs in leased space at the Helgesen Industrial Center on Venture Drive.

NorthStar Medical Radioisotopes, a medical isotope maker, plans to break ground this year on a $194 million plant in Beloit that's expected to create more than 150 high-paying jobs by 2016.

SHINE Medical Technologies, another medical isotope manufacturer, announced Tuesday that it will build a plant south of Janesville that will require more than 100 hi-tech jobs that would pay in the neighborhood of $50,000 to $60,000 per year.

"The combined impacts of SHINE and NorthStar have the potential to assist with reshaping Rock County's manufacturing image," Otterstein said. "While technically still considered manufacturing, these projects represent the convergence of medicine, technology and production into a single offering.

"This type of clustering hasn't occurred in Rock County."

Change in direction?

Otterstein said it's refreshing to work on expansions and relocations rather than plant closings and mass layoffs.

"These announcements are reflective of the county's increasingly diversifying economic base," he said. "If you take a look at the 50-plus projects that have advanced since 2008, you can see the range of industry sectors—food processing, advanced manufacturing, logistics, health care and medical and information technologies—that have moved forward."

All are examples of activity that has or will shrink the jobs deficit.

"In my opinion, demand and sales create jobs," said Vic Grassman, Janesville's economic development director. "In the last couple of years, we've heard about companies sitting on a lots of cash because there wasn't the demand or the sales to warrant investment.

"Now, inventories are low, sales or commitment for sales are increasing, and these companies are recognizing the pent-up demand for their products, and they are looking to expand and hire people."

Grassman referred to these companies as survivors of the economic downturn that now see market opportunities that they're willing to invest in.

"What we're seeing in Rock County is really not that different than what's going on around the country," Otterstein said. "There's growth, but it's sluggish and on an incremental path.

"… There is more interest now in Rock County, and I would suggest that's because we've aggressively increased our competitiveness while some other areas have not. What that translates to remains to be seen."

Last updated: 7:13 pm Thursday, December 13, 2012

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