Tom Still column No. 37-06
“Is Wisconsin’s economy stronger, weaker — or just changing?”
FOR IMMEDIATE RELEASE (7-4-06)
By Tom Still
MADISON – If you read this batch of headlines, you might conclude Wisconsin’s economy is headed straight for a rusty dumpster.
- “Plant buyouts hit home: GM, Delphi workers take buyouts”
- “About 260 at Briggs & Stratton to retire to secure health deal”
- “Walworth County loses bid as Honda picks Indiana site for plant.”
But if read these news stories, you might just as easily think the state economy is humming down the path to prosperity.
- “Nursing home supplier to expand in Milwaukee”
- “Green Bay area gaining 1,000 call center jobs”
- “Manitowoc Co. lands Coast Guard contract”
- “Oshkosh Truck makes deal: It will buy maker of specialty vehicles”
- “Investors to revive Park Falls mills”
- “Tax credits could lead to 500 jobs at Bemis Co.”
All of those stories broke in the last week of June. Collectively, they paint the picture of an economy that is stronger in some vital sectors and weaker in others — but mainly they portray an economy in transition. We might as well get used to it: The fits-and-starts evolution of Wisconsin’s 21st century economy may continue for years to come.
The shakedown in the automotive industry has hit Wisconsin as hard as any state outside Michigan, with workers at GM’s Janesville plant and Delphi’s two plants in Oak Creek taking the brunt of the cutbacks. While the Janesville assembly plant will remain open, some fear the auto parts plants in Oak Creek will close. With state help, Walworth County put together a late bid to attract the Honda plant, a $550-million facility that will be built southeast of Indianapolis. In the end, however, the proximity of other Honda facilities to the Indiana site proved too much to overcome.
As the U.S. auto industry transforms itself, Wisconsin could once again become a place where those types of manufacturing jobs are created instead of lost. But it will take time.
The “good news” stories demonstrate that manufacturing is far from dead in Wisconsin, where 567,000 people still make a living in that increasingly diverse sector. They also show that higher-end service jobs can help fill the gap for jobs that are lost.
Direct Supply Inc., one of the nation’s largest suppliers to the nursing home industry, announced it will add hundreds of jobs at its Milwaukee headquarters. UnitedHealth Group said the “vast majority” of the 1,000 jobs it will add in Green Bay will come with full benefits and starting pay of about $23,000; some tech-based jobs will pay more.
The Manitowoc Co. was part of a partnership that won a $600-million, eight-year contract to build up to 350 high-tech vessels for the Coast Guard, and much of the work will take place in Marinette. Oshkosh Truck Corp. continued its diversification strategy by announcing it will buy the specialty vehicles division of HealthTronics Inc. A group of investors from the Hayward area say they will reopen the Park Falls paper mills by the end of August, putting about 300 employees back to work in a leaner, more efficient facility. In Neenah, packaging maker Bemis Co. has been offered $3 million in state tax credits that could result in 500 new jobs over the next several years.
Free-market economies are never static. As some industries decline or belatedly embrace innovation, new industries are born and rise. That’s happening in Wisconsin, although not yet at a pace that would guarantee long-term prosperity.
In a report released by the American Bankers Association Advisory Committee, a group of bank economists forecast slower growth for the nation throughout the rest of 2006. They predicted Wisconsin will experience “well-balanced, moderate growth” in employment and income during the same six months. The economists said Wisconsin’s economy continues to grow faster than those of most other Great Lakes state – but not as rapidly as the nation as a whole.
“Sluggish population growth is a headwind, but overall Wisconsin is well positioned for healthy, sustainable growth,” the economists said.
There will be setbacks and successes for Wisconsin in the years ahead, sometimes simultaneously. In today’s national and world economies, “change” has become the new norm.
Still is president of the Wisconsin Technology Council. He is the former associate editor of the WisconsinState Journal in Madison.