20 years after plant closure, Kenosha has rebuilt its economy
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A marina, that once stood in the shadow of industrial buildiings on Kenosha's lakefront, now provides an exciting entry to an area of homes, museums and shops. The entire area continues to undergo redevlopment, more than 20 years after the auto plant closed.
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In the place where autos were once made, a trolley now circles a neighborhood of attactive homes, shops and museums. Since the closing of Kenosha'a AMC plant in the mid eighties, the area has been reborn.
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An attractive residential development, two museums, and waterfront public space now occupy the lakefront site in Kenosha where an auto manufacturing plant once stood.
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In 2001, The Kenosha Public Museum opened on a piece of what was once the former site of an auto factory in the city. The lakefront site has blossomed from it's former industrial uses.
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A new small shopping area has grown up adjacent to the lakefront site in Kenosha that once held an auto factory. The bulk of the former inustrial site is residential with two museums and a renovated marina.
KENOSHA — When Chrysler closed its auto assembly plant in Kenosha and eliminated more than 5,000 jobs, many thought the community would never recover.
Local residents predicted a skyrocketing unemployment rate, to be followed by a wave of crime, foreclosures and even suicide.
And then there was Dick Keehn, insisting the plant’s closure would prove to be a good thing.
“I said Kenosha would be better off in the long run, but I had to admit it was going to be hard in the short term,” said Keehn, who retired in 2000 after 31 years teaching economics at UW-Parkside in Kenosha. “That’s not a very popular thing to do.”
Today, Keehn believes his predictions were dead-on.
The local economy did not collapse, but it did struggle for a few years. The area has welcomed new businesses and residents in the last 20 years, and the city has revived its once-ailing downtown.
Most importantly, the local economy is much more stable than it was during the boom-and-bust-years of American Motors Corp., Keehn said.
“(The auto plant) totally dominated the local labor market, but it also meant a very unstable labor market, because AMC was going like a roller coaster,” he said.
Local officials say quick action from community leaders, a helpful settlement with Chrysler and a little bit of luck helped Kenosha get back on its feet after the plant closed in 1988.
That’s not to say the rebuilding effort was easy or quick. Former autoworkers endured lower wages, relocation and unemployment, and it’s impossible to know how many lives were forever altered by the plant’s closing.
“For the people actually involved, it’s been terrible, but in the long term Kenosha is probably doing OK, probably stronger than it was in ’88,” Keehn said.
Devastating news
It certainly didn’t seem like the community was getting stronger when Chrysler announced it was closing its auto assembly plant in January 1988.
Auto assembly had been a presence in Kenosha since the birth of the automobile in the early 1900s—first through Nash Auto, then through American Motors Corp.
The company employed 16,000 at its peak but dropped to as low as 2,000 as American Motors struggled through the 1970s.
Chrysler bought American Motors in 1987. In January 1988, the company announced it was closing the Kenosha assembly plant at the end of the year, eliminating more than 5,000 jobs—10 percent of the county’s workforce—and deserting a 31-acre plant on the shores of Lake Michigan.
Residents reacted with shock and anger, but officials quickly took action, said Donald Holland, a Kenosha alderman who served as city administrator when the plant closed. They had seen too many examples of cities that threw up their hands after losing industry and became “rust buckets,” he said.
Plan of action
Community leaders immediately formed a Kenosha Transition Team to lead a yearlong planning process.
Chrysler agreed to create a trust fund from all the profit made from the sale of vehicles in Wisconsin in 1988. Much of the $23.6 million fund went to separation pay for the workers, but nearly $9 million paid for education for workers and their families in the following 10 years.
“It was something that up to now had never been done before,” Holland said.
In all, Chrysler agreed to a $220 million closing package, including $20 million to raze the buildings on its lakefront plant.
Meanwhile, the transition team worked to attract new industries and jobs, Holland said. It wanted smaller companies that might locate their headquarters in Kenosha, too.
“That meant we had to change some things as far as what might attract somebody to come and live here and raise their families and engage in the local social life,” he said.
The city decided to focus on its lakefront.
It solicited a developer to build HarborPark, a 350-unit condominium project, on the former site of the assembly plant. It built the Kenosha Public Museum next door and beefed up its once-tiny marina, even installing an old-fashioned streetcar system along the lakefront.
“All of these things, in themselves, it’s not much, but we’re starting to put a package together,” Holland said. “We’re getting a lot of notoriety, as in, ‘Hey what in the H is going on in Kenosha?’ This old rust bucket is now becoming a shining jewel on Lake Michigan.”
Short-term pain
Still, a new condo development and streetcar didn’t turn Kenosha’s economy around overnight. According to a Dec. 19, 1993, article in the Kenosha News:
-- Kenosha’s unemployment rate shot up from 3.6 percent before the plant closed to 8.8 percent in April 1989.
-- The city lost $26.7 million in tax base as Chrysler shrunk assets.
-- Water bills rose an average of 23 percent over five years because Chrysler had been the city’s biggest water user.
-- Property taxes increased an average of 22 percent in five years, although it’s impossible to tell how much of the increase is attributable to the plant’s closing.
But not all the dire predictions for Kenosha came true.
Housing prices increased as people from northern Illinois discovered the lower cost of living just over the border in Wisconsin. In fact, Kenosha’s location along Interstate 94 between Milwaukee and Chicago turned out to be a Godsend for the community, Holland said. The plant closing came just as the northern suburbs of Chicago started spilling into Wisconsin.
“We knew that we were strategically located for companies to look at,” he said. “We were north of the Illinois border, which meant that our cost of doing business was substantially less than the northern Illinois area …. Companies that were looking in northern Illinois all of a sudden looked at southern Wisconsin.”
Long-term gain?
Actually, the plant’s closure put Kenosha in a better position to receive those new companies, Keehn said. American Motors’ domination of the local labor market and its high wages had intimidated other companies from locating there.
In the years since the plant’s departure, the city has developed two industrial parks with many small companies, Holland said.
Wisconsin Electric announced plans in 1987 to develop an industrial park in Pleasant Prairie, a suburb of Kenosha. Today, LakeView Corporate Park holds dozens of factories and warehouses and has created about 7,000 jobs since it opened in 1988, according to a 2003 Kenosha News article.
By 1996, Kenosha County’s unemployment rate had dropped to 3.6 percent, though it rose to 5.4 percent by 2006.
The community is on a roll, now, Holland said.
“When you see activity like that occurring, the marketplace starts looking at what’s happening,” he said.
“We’re doing pretty good right now. We’ve now got a posture where people in the community are really proud of the community.”
But not everyone thinks the plant’s closing was good for the community.
Rudy Kuzel, now retired, was president of Kenosha’s United Auto Workers chapter when the plant closed.
“Anyone who is so petty and slow-minded that they think 5,000 people losing good family-supporting jobs is a good thing isn’t even worth commenting on,” he told the Kenosha News in 2003.
“The only thing that has happened in Kenosha since those 5,000 good-paying jobs were lost is they’ve created more low-wage jobs.”
LESSONS TO LEARN
Kenosha officials immediately made a plan when Chrysler announced it was closing its lakefront assembly plant there and eliminated more than 5,000 jobs. Here are some actions Kenosha took and lessons Janesville can learn, experts said:
-- Diversify your economy: Kenosha focused on attracting small- and medium-size employers with 200 to 1,000 employees, said Alderman Don Holland. That way, the local economy doesn’t rise and fall with the fortunes of one company, and a plant closure—while still a blow—doesn’t cripple the community.
-- Focus on your strengths: In the years after the plant closing, Kenosha built up one of its greatest features—its lakefront, Holland said. It created a condo development on the site of the former lakefront assembly plant, built the Kenosha Public Museum, remodeled its marina and installed a streetcar system along the lakefront.
The city’s efforts created greater quality of life in the community and helped attract potential businesses, Holland said.
-- Emphasize education: City, state and union officials negotiated a closing package with Chrysler that included a revolutionary trust fund. The fund, created from the profit made by Chrysler on vehicles sold in Wisconsin in 1988, offered separation pay to workers but also paid for education for workers and their families. The fund paid out nearly $9 million for education purposes in 10 years.
Janesville should use its educational resources—the Janesville School District, Blackhawk Technical College and UW-Rock County—to encourage plant workers to get new training and the next generation to learn skills that will help them in today’s economy, said Dennis Kaufman, an economics professor at UW-Parkside in Kenosha.
-- Look to your neighbors: Kenosha benefited from its strategic location between Milwaukee and Chicago. Janesville isn’t quite as well situated, but it isn’t far from Madison and could try to lure new residents and companies through that connection, Kaufman said.
“My suggestion for Janesville would be to look north, north and a little bit west toward Madison, to see if they can’t tap into some of the level of economic activity there,” he said.
-- Don’t live in the past: Kenosha officials considered suing Chrysler to try to force it to keep its assembly plant open, but instead settled for a $220 million closing package. Dick Keehn, a retired UW-Parkside economics professor, recommended Janesville follow Kenosha’s lead and not try to force General Motors to stay.
“I don’t think they should waste time trying to do that,” Keehn said. “It’s an old plant, and it’s not particularly well-located to ship cars.”
NOT LIKE THE OTHER
No doubt, the closing of the General Motors plant in Janesville will create many of the same experiences felt by Kenosha when its Chrysler lakefront assembly plant closed in 1988. But a few key differences exist between the two cases.
Scale:
-- The Chrysler closing eliminated more than 5,000 jobs—about 10 percent of Kenosha County’s workforce.
-- The GM closing in Janesville will eliminate 2,600 jobs, including the jobs of about 600 hourly employees who will leave with buyouts later this month. The closing probably will mean the loss of an additional 1,000 jobs at local GM suppliers.
That’s about 4.3 percent of Rock County’s labor force, according to the Wisconsin Department of Workforce Development.
Location:
-- Kenosha benefited from its location along Interstate 94 between Chicago and Milwaukee. Its easy access to those cities helped keep property values up and attract new companies, local experts said.
-- Janesville isn’t as well situated, but it is close to Rockford, Ill.; Beloit and Madison and should use those connections to its advantage, said Dick Keehn, a retired UW-Parkside economics professor.
Timing:
-- Wisconsin faced a different economy when the Chrysler plant closed in 1988 than it does today, said Dennis Kaufman, economics professor at UW-Parkside. Domestic manufacturing was much stronger back then, so Kenosha was able to lure other, smaller manufacturers to its new industrial parks.
Janesville might have a tougher time attracting manufacturers and probably should focus on other sectors, such as information technology, Kaufman said.
Jun 11, 2008 at 4:57 a.m.
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I believe Webster's defines a generation as approx. 23 years...I can't wait a generation..I will follow the work..
Jun 9, 2008 at 7:25 a.m.
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I don't think most of us can wait 20 years for rebuilding. I hope the city is already taking steps to bring in employers to fill the void that will be left by GM and the others in the area like Lear and Stoughton Trailers.
Jun 8, 2008 at 10:02 p.m.
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20 years ago, the industrial age was still prevelant. This is a whole new "ball game".
Jun 8, 2008 at 9:31 p.m.
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Where was the contingency plan that Janesville made in case something like this could, should, or would happen? I am not looking to dwell in the past either. I see this as a great opportunity for Janesville to become something more than a GM town. I believe the community needs to try to address what positives this area has for prospective businesses. Janesville has a strong workforce. We have outstanding transportation, both by rail and interstate. We are a stones throw away from Madison, Milwaukee, Chicago, and Rockford. This should be open arms to invite businesses to our great city. I do not want Janesville to be known as the commuter city. I also don't want to see it being transformed from the city of parks to the city of vacant lots. We should be shopping for a new city manager. Do whatever it takes to get businesses in here. Janesville can always do classifieds to pull businesses here!
Jun 8, 2008 at 9:21 p.m.
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Bill -
"The entire United States is paralyzed at this point in history by crippling regulation "
Have you ever been outside of the U.S.? I'll bet you haven't. If you had, you would see comparatively massive regulation in prosperous economies all around the world. The solution to our current economic woes is to learn from the best of other cultures, to debate and adapt new ideas. Our problem in America is exactly the opposite of overregulation.
Jun 8, 2008 at 9:11 p.m.
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Well, I didn't think the point was that we should copy Kenosha and build condos. The point was that a community that unites with a focused effort can rebound from even a very difficult loss.
Jun 8, 2008 at 8:40 p.m.
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Exactly. I'll move back to Janesville in 20 years then.
Jun 8, 2008 at 6:16 p.m.
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BADGER....I was being sarcastic. Most people don't have 20 years to wait....
Jun 8, 2008 at 5:50 p.m.
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Nobleone, I'll rain on your parade. Do you think the budget strapped UW system is going to add a 4 year college in Janesville 20 miles from Whitewater and 40 from Madison? We have Blackhawk tech and U-Rock already. An expansion of U-Rock has happened with the new engineering building and cooperative with UW-Platteville for 4 year degrees from there in engineering. A new campus is not in anyway realistic.
Jun 8, 2008 at 5:23 p.m.
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to Optimism:
Only 20 years? One has only look at Flint Mi to how long it can take for a city to bounce back (if ever). Flint Mi still hasn't came back from what started in 1974. Take a look at Buick City (25,000 workers at high water mark),now is a small pile of bricks and sand.Flint North (41,000 workers at high water),now 3100 and getting smaller.Flint Truck and Bus,may be closed soon.Flint South,should be close at end of 2011,and I won't even start on how many plants are closed that were AC Delco (upwards of 50,000 more workers).Kenosha has done a fine job at building a better city and industrial center. Janesville I hope takes Kenosha's lead and not Flint's lead. Flint still looks like a big almost dead city.
Jun 8, 2008 at 5:19 p.m.
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I agree, this article was well researched and well written.
Momof5: I believe the author is not trying to compare apples and oranges, hence the section entitled “Not Like The Other’. I believe the intent is, instead, to give Janesvillians hope that there was another town with a cloudy future that was able to ‘make lemonade out of lemons’ as someone else had mentioned.
I am more worried about the “leaders” that will be qualified to do the types of negotiations for Janesville that Kenosha was able to do. Who is qualified to do this type of work? And I am not asking because I am not happy with our city management, but rather I am wondering what city position has had such training? The city attorney? Our Economic Development department? Or do we have to get us some big-city hired-gun?
It would be devastating to allow GM to slip off the hook and leave us taxpayers with the burden of the plant and the other fallout that will hit because of its closing. GM needs to be held responsible to the full extent that Janesville can demand, but we need the right person to head this effort.
Jun 8, 2008 at 5:12 p.m.
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Janesville's location on the I90 Midwest Commerce Corridor is superb for business development. The entire United States is paralyzed at this point in history by crippling regulation and unproductive nonsense. Losing GM, which has provided so much, to so many, for so long is truly a tragic death to be mourned,and honored for what GM provided. Janesville's City officials have been effective in diversifying the Cities economy prompted by prior GM stumbles. Janesville could now put together a shopping list of the types of business it would welcome and offer regulatory fast tracking to help existing businesses expand and rapid start ups for new businesses. GM is leaving, the economy is a mess, but things could be terrific in Janesville.Smart people, great location,Janesville could shake up the World.
Jun 8, 2008 at 4:33 p.m.
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It took ONLY 20 years to bounce back? That's encouraging.
Jun 8, 2008 at 3:36 p.m.
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So what they are saying is that it's taken 20 years to recover and gain a bunch of lower paying jobs. In addition, Kenosha has a better waterfront and location then Janesville.
I feel much better now, nothing to worry about here.
Jun 8, 2008 at 3:33 p.m.
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Yeah I really dont see why it wouldn't work but i am sure someone will come up with a reason. Look at all the jobs that have been created just from a a UW being in madison. We are gettting a new Dean heathcare center, what would make more sence than having a college to train the out of work Lear/GM workers and to drive up the demand for housing in this area granted crime might go up a bit being a college town.
Jun 8, 2008 at 3:23 p.m.
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nobleone: that could be an idea. Build a 4 year campus on the current GM campus site. It would certainly help Janesville get away from the uneducated stereotype.
Jun 8, 2008 at 3:23 p.m.
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Janesville as a college town would work. Just get rid of the GM plant build a large UW. Watch property values go up, along with the tax base. Janesville would also benefit from new business start ups. Then maybe Janesville could break the stereotype of a town full of uneducated auto workers. Just think all the bars in jaesville could stay open with a group of people to support them
Jun 8, 2008 at 2:50 p.m.
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UW-Janesville
Jun 8, 2008 at 2:16 p.m.
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Well written article. However, it is comparing apples to oranges. Kenosha (and the timing) is so much different than Janesville. Kenosha has it's lakefront, easy access to Milwaukee and suburban Chicago, a 4-year UW college (as well as Carthage). I mean NO disrespect to the folks who live in the Delavan Drive area, but let's face it: dozing the GM campus and erecting multi-million dollar condos and high-rises would look very out of place. Not to mention that sort of development would be a waste. The housing market already has a surplus of inventory and the value of the dollar becomes weaker with each passing day.
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I will be the first to admit I was wrong, but I do not see Janesville following in Kenosha's steps.
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The State of Wisconsin truly holds the key in all of this. The City can intice employers to the area all they want. If the State is not willing to wheel and deal when it comes to incentives and breaks, not much will happen I am afraid. Why would a business want to relocate to Wisconsin when we are the highest taxed state in the land?!!
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On a different note: It would be nice of GM to offer some sort of settlement package to the suppliers who will now have vacant buildings peppered through out Janesville.
Jun 8, 2008 at 1:57 p.m.
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Nobleone: I hope you don't mean what I think you mean with that comment. If it is, then Janesville will be glad to see you sell your property and be on your way. If I took your comment the wrong way, then please clarify what "dark in your area" does mean.
Jun 8, 2008 at 1:29 p.m.
Jun 8, 2008 at 12:38 p.m.
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The right people haven't been stepping up during the normal operation of the city, It will take a "housecleaning" of the current poeple as well as the right people coming in to manage things properly. If Kenosha's loss - with a better location than Janesville AND a closing financial package from Chrysler (and without the last 20 years of national job-outsourcing) - resulted in a 23% increase in water bills and a 22% increase in property taxes, I'm concerned what the freespending management of the City of Janesville will do when the GM plant pulls the plug.
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I want to build a home soon, but I'm wondering if I should choose Milton or Edgerton, rather than Janesville, to avoid large tax increases. It would be nice to see some follow-up reporting on towns outside of Kenosha and what impact the Chrysler plant closing had on them. In light of tippiwoo's comment, I think it would be helpful to have more information from multiple sources about how the plant closing in Kenosha affected the area. How do their taxes and fees today compare with the pre-plant-closing (allowing for normal inflation) and how does Kennosha's current and pre-closing credit ratings from bond companies and other lending institutions compare?
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It would be nice if the State of Wisconsin could force GM to clean up all environmental hazards on the property when they shut down production so the taxpayers don't get stuck with that bill. Perhaps our dismal state legistature and Governor could improve their deservedly poor reputations by actually doing some constructive work on that.
Jun 8, 2008 at 11:28 a.m.
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Anybody ever heard the saying "When life gives you lemons, make lemonade?" I think if the right people get involved, Janesville has just as much of an opportunity as anyone else to take advantage of a bad situation only to end up better off in the end.
Jun 8, 2008 at 10:57 a.m.
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It's going to be a long haul for the Rock County area in general. American manufacturing is gone, for good or bad, and the region has little to offer in the way of natural resources or attractions that you can't find all over the midwest. Rockford is dead, so I'm not sure why that is a plus for the region. In the end, location does matter. People stayed here, grew up here because of the GM economy, (mostly, anyway. I do realize no everything is related to GM here) and the $$ that was possible in times of prosperity, however when corporations move, you have to take a look around and ask yourself, "why are we here?"
Jun 8, 2008 at 10:10 a.m.
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Having lived in Janesville for 3 years and now a resident of Kenosha, let me tell you I would give ANYTHING to live back in Janesville. What this article has shown you is not the norm here in Kenosha, drive on the north side of town or even a few blocks from those overpriced condos and you will see a quite different scene.
Jun 8, 2008 at 9:57 a.m.
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I agree, hatch.
Jun 8, 2008 at 9:19 a.m.
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Kenosha had/has lake front.....J-ville..Rock river. No, no comparison. Unless you compare the mercury content in the fish.
I say with all the talented, smart people in this area (yes we have some here) we should look for green technologies....ie: electric autos, small wind turbines that people can install in their yards, solar.
Rock county, southern Wis/northern Il and Janesville have a golden opportunity to rise above the corporate biggies and make the next great thing that will put the spotlight on the good/great people of this area.
Jun 8, 2008 at 8:33 a.m.
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I'm not surprised by Rudy Kuzel's comment. I lived in Kenosha in the '80's and it was him and his belligerent union that was largely to blame for the plant's closing. The case was much different in Janesville. Unlike Kuzel and his militants, Mike Sheridan and his union worked with management and kept our plant alive probably 5 years longer than it would have been otherwise. Had John Jarstad and Gary Giles remained here instead of Sheridan and Gary Malkus, this plant wold already be long gone.
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