By M.D. Kittle | Wisconsin Reporter
MADISON — Maybe it’s a different world — a tale of two economies.
But amid four consecutive months of Wisconsin workforce contraction and a lingering economic malaise, business is good at Wisconsin Aluminum Foundry Co. Inc. in Manitowoc.
The aluminum- and copper-based alloy castings maker is in full expansion mode, building a 30,000-square-foot addition and planning to add 43 jobs.
“We seem to exist in a different universe than what you hear on the news,” said Jim Hatt, Wisconsin Aluminum Foundry president. “We’ve actually put this (expansion) off longer than we should have. We’ve been busy the last two three years."
Hatt’s story stands in contrast with the tough numbers of a Wisconsin economy that seemingly has been moving in reverse — at least on the job-creation front.
In October, Badger State employers cut 9,700 jobs, according to the state Department of Workforce Development. The contraction marked the largest month-to-month employment percentage decline among all states.
Seasonally adjusted unemployment, while well under the national average rate of around 9 percent, has been hanging in the high 7s in recent months.
Year over year, the private sector had added 14,500 jobs between October 2010 and last month, but the big employment gains earlier this year have all been swallowed up, a significant setback to Gov. Scott Walker’s pledge to create 250,000 new jobs over the course of his term.
“I hope we’re going to bounce back from that number — that was a tough number to take,” Dennis Winters, chief labor economist for the Workforce Development, said of the October employment losses. “Hopefully we will see some growth come back in manufacturing and health care, which has been strong throughout the recession cycle.”
If the past few months of economic development activity in the state are any indicator, better days are ahead.
The Wisconsin Economic Development Corp., or WEDC, the quasi-public development organization that replaced the state Department of Commerce, lists 10 major economic expansions involving state assistance, in the past three months. Those developments alone are expected to maintain and create as many as 2,000 jobs over the next few years, with tens of millions of dollars in plant and equipment expansions expected to create additional construction jobs.
There have been several other big-ticket developments that didn’t make the incentives list, including Waukesha-based generator manufacturer Generac, which plans to hold another job fair Wednesday at its Whitewater plant, where it looks to add 300 assembly positions — many of which must be filled in the next 90 days.
Racine County earlier this month got a big economic shot in the arm when Cree Inc.’s Ruud Lighting subsidiary announced plans for a 208,000-square-foot expansion to its Sturtevant plant, expected to create 469 full-time jobs over the next four years.
The development is among 13 that the Racine County Economic Development Corp., or RCEDC, has assisted year to date, with the prospects of creating nearly 900 jobs and retaining another 1,200 positions, said RCEDC Executive Director Gordy Kacala.
“The companies are very confident these projects are going to go ahead for us over the next couple of years,” Kacala said. “That’s 900 manufacturing jobs. That’s huge.” Particularly for the city of Racine, which habitually posts some of the highest unemployment rates in the state. Racine's jobless rate in October, at 11.8 percent, was the highest among Wisconsin's cities.
Such expansion must be welcome news to a governor who has been hammered hard by opponents critical of his agenda and calls for special legislative jobs sessions.
Politics of job creation
Assembly Minority Leader Peter Barca, D-Kenosha, earlier this month charged that the Walker agenda is costing Wisconsin jobs — a decline of 27,600 since the governor signed what Barca called a “regressive budget in June.” Barca did not return a call from Wisconsin Reporter on Tuesday seeking comment.
“As a small business owner myself, I think the first rule is to keep the jobs you have,” Hulsey said.
That’s what the recent developments, officials have said, intend to do. The list includes battery maker Spectrum Brands, which announced Tuesday it will keep its corporate headquarters in Madison, retaining 470 jobs while creating as many as 60 new jobs. Spectrum, like most of the other companies on the development list, will grow with the help of state assistance — for Spectrum, a $4 million WEDC loan.
“We’re always eager to encourage job creation in Wisconsin,” said Walker spokesman Chris Schrimpf in an email to Wisconsin Reporter. “We believe that the Special Sessions which showed Wisconsin focus on jobs and did things to create the Wisconsin Economic Development Corporation help encourage businesses to grow here and locate here.” As do the budget reforms that shored up a $3.6 billion shortfall, Schrimpf said.
State Rep. Donna Seidel, D-Wausau, in a news release following an event earlier this month announcing the location of tech company Collaborative Consulting to Wausau, credited the expected creation of 200 jobs with legislation forwarded by Democrats in the 2009-11 budget.
“This effort shows how we can grow our economy when job creation is truly the top priority,” Seidel said.
'Not out of the woods'
State Rep. Bob Ziegelbauer, I-Manitowoc, countered that some fundamental legislative changes this year will help business growth in the long term, but the stagnant national economy, the tax climate and pending health-care insurance requirements are “suffocating job uncertainty out there.”
“It’s not all roses,” the lawmaker said. “We maybe hang our hat and want to have a parade anytime we have any good news, but we’re not out of the woods yet by a long shot.”
That's a fact, said Bruce Hansen, a professor of economics at University of Wisconsin-Madison.
“Right now there is an incredible amount of uncertainty,” said Hansen, noting the crises in Europe and the U.S. debt questions. “I’m not expecting employment figures to be improving in the near future. But there have been some good signs, but the uncertainty swamps the positives.”
There remains an economic irony in play. In the face of long unemployment lines, many Wisconsin employers can’t find the skilled and unskilled workers they need.
“As a foundry, we’re a little lower on the food chain in terms of skills,” Wisconsin Aluminum’s Hatt said, “but they still have to pass a drug test and basic math skills, and sometimes that’s hard to find,” even at $15 to $20 per hour.
At least three Manitowoc-area firms have purchased billboard space advertising for employees.
“That’s one of the reasons we were hesitant about expanding … ‘Can we fill up and man the expansion property to meet our customers’ requirements?'” Hatt said.
The Assembly’s Committee on Jobs, the Economy and Small Business had hoped to further explore the issue of job training at a hearing this month, but it appears that won’t happen until early next year due to scheduling conflicts.
WEDC's recent 10 major economic development projects are:
- Franklin-based private-label baker Baptista’s Bakery's $75 million expansion project, which is expected to create of up to 240 new full-time jobs. WEDC allocated up to $2.260 million in economic development tax credits.
- Adhesive and sealant company Bostik Inc.'s consolidation of its research and development facilities in Wauwatosa to create up to 76 new full-time jobs. WEDC allocated up to $1.5 million in economic development tax credits.
- Air carrier Air Wisconsin Airlines Corp.'s plans to maintain 242 jobs at its corporate office in Appleton. WEDC provided a $600,000 loan.
- Power tool builder Milwaukee Electric Tool Corp.'s expansion of its Brookfield research and development center, which is expected to create 103 new jobs. WEDC allocated up to $1.5 million in economic development tax credits and a $250,000 loan.
- Aluminum- and copper-based alloy castings maker Wisconsin Aluminum Foundry Co. Inc.'s expansion project, which will create up to 43 new jobs. WEDC allocated up to $210,000 in economic development tax credits to the Manitowoc company.
- Business and technology consulting firm Collaborative Consulting Inc.'s plans to locate its new technology services development center in Wausau and create up to 200 jobs. WEDC allocated up to $2.250 million in Jobs Tax Credits.
- Information technology services firm Bluestar Infotech America Inc.'s establishment of a new global travel technology delivery service center in Bayside to create up to 250 full-time jobs. WEDC allocated up to $3.75 million in economic development assistance.
- Battery maker Spectrum Brands' plans to maintain its corporate headquarters in Madison and retain 470 job and create up to 60 new jobs. WEDC has provided a $4,000,000 loan.
- Conover-based contract engineering and manufacturing company Transthermal LLC's establishment of an office and research and development space in Eagle River and continued development of the company’s cooling technologies to create up to 234 new jobs. WEDC has approved certification for the Qualified New Business Venture and the Qualified New Business Venture Capital Gains programs for investors in the company.
- Hardware and software developer Quter Inc.'s development of its technology and aggressively pursue commercialization to create 100 new jobs. WEDC has approved certification for the Qualified New Business Venture for investors in the company.