By Linda Lipp, Greater Fort Wayne Business Weekly
lindal@fwbusiness.com
It wasn't all bad.
While 2008 probably will be remembered in northeast Indiana primarily for the jobs shed by companies as the nationwide recession deepened, there also were plenty of positives on the balance sheet.
Industrial and related employers in a 10-county area announced plans to invest $535 million in new and expanding operations that were expected to create at least 3,257 jobs, according to data compiled by the Community Research Institute at Indiana University-Purdue University Fort Wayne and Business Weekly. That's almost 32 percent higher than the 2,469 jobs companies pledged to add in 2007.
"I expected '08 to show more negative numbers than it did," said CRI Director John Stafford. "But our economy here was performing as it has been for most of the decade."
The first two-thirds of the year saw moderate activity in terms of investment and job creation, as well as in job losses. It was mostly in the last quarter of the year, when the national economic picture, particularly the financial sector, began to fade that the negative effects really began to ripple through the northeast Indiana economy.
"It was almost a bifurcated year," Stafford said.
The pace of layoff and closing announcements picked up sharply as 2008 drew toward a close. Some of the jobs were cut almost immediately; others, such as the 380 to be eliminated at Autoliv in Whitley County, will be phased in through much of 2009 as the plant completes contracts, winds down and closes.
For all of 2008, according to Business Weekly calculations, the number of jobs to be cut due to layoffs, downsizings and plant closings announced totaled 5,341, about 64 percent more than the number of jobs to be created. In 2007, the number of jobs lost was only slightly higher than the number of jobs created.
The 10 counties covered by Business Weekly - Adams, Allen, DeKalb, Huntington, LaGrange, Noble, Steuben, Wabash, Wells and Whitley - saw a mix of wins and losses.
Steuben County, for example, continued its streak of finding new occupants for old buildings to eight, "although one of them (Elite Manufacturing) is since deceased," said Gary Nielander, executive director of the Steuben County Economic Development Corp.
The county scored nine industrial expansions and one new business in 2008. On the down side, two manufacturers, Rittal Electromate and Salga, announced plans to close; and TydenBrammal downsized as it shifted some production to Mexico.
"We've done pretty well, all things considered," Nielander said.
The Steuben organization, founded in 2004, has had to play catch-up as it competed with counties with established local economic-development organizations, but it still came out on top. In September, Steuben was named by the state as the top county in Indiana for per-capita job creation since 2005.
Huntington County scored 10 wins from companies that pledged to invest $29 million and create 160 jobs, said Mark Wickersham, executive director of Huntington County United Economic Development. But it also saw three big closings that have or will eliminate 635 jobs.
"We're not all that different than what was going on nationally and regionally," Wickersham said. "The last quarter was difficult ... but it could have been worse."
Three Fort Wayne companies that did contract sewing for Vera Bradley shut down in 2008, eliminating 537 jobs in Allen County. But the handbag and accessory manufacturer, which also pulled contract work from plants in Van Wert, Ohio, and Rochester as part of a vertical integration strategy, began an in-house manufacturing operation in New Haven expected to create 560 jobs through 2011.
Wabash County lost its second largest employer in 2007 when automotive supplier GDX shut down its local plant. It scored several wins in 2008, most notably a hydrogen/methane plant to be built by ForeverGreen Enterprises and an expansion of Living Essentials' energy-drink production operations.
But the 400-plus gain in jobs was more than offset by the 668 jobs lost through the closings of two other manufacturers, Wabash Magnetics and Dexter Axle, and layoffs at four others.
Although manufacturing still is the largest creator of new jobs in northeast Indiana, "it's difficult for it to be the net generator of new jobs," Stafford said.
The CRI report was produced for the Northeast Indiana Regional Partnership and includes the 10 counties covered by Business Weekly, as well as Grant County, which is outside Business Weekly's coverage area. It reflects public announcements and/or public actions, such as the grant of a tax abatement or other incentive.
Not every business makes an announcement when it expands personnel, purchases a piece of capital equipment, lays off workers or downsizes by not replacing retirees and others who leave, the report noted. The impact of those events usually is not captured until many months later in data produced by the Bureau of Labor Statistics or the Bureau of Economic Analysis.
The Regional Partnership will use the data in its marketing materials as well as in business development efforts. When the partnership's representatives are out meeting with prospects, "the one thing they want to know is that we know what's going on," said Katy Silliman, the partnership's operations manager.
The report does seem to reinforce the partnership's decision to focus on six key areas: food processing, transportation/warehousing, medical devices/software/equipment, finance/insurance, defense communications and advanced manufacturing/materials. About a third of the jobs created in 2008 were in those areas, Stafford noted.
It also makes it clear that, "overall, we have to continue to diversify our economy," Silliman said.
For the first time, the report also tracked job losses and creations in nonindustrial sectors - such as health care and banking and finance - that are important components of the area's economy.
The addition of health care was particularly significant, as hospitals and other medical facilities announced plans to invest more than $629 million to renovate, expand or create facilities in several counties. The lion's share of the investment, $536 million, comes from a single project: the multiyear transfer of tertiary care facilities from Parkview Hospital's Randallia Drive campus to new facilities at Parkview North.
Despite the enormity of the health-care-related investment, however, the projects announced were expected to create just 104 jobs. The chief benefit is that the Fort Wayne projects, in particular, will continue to improve the city's draw as a regional center for medical services.
Other assorted nonindustrial employers, including everything from banks to a LaOtto paintball complex to Taylor University Fort Wayne, which announced in October that it would close in May, added about 100 jobs to the lost column and 26 to the jobs gained category.
The 2008 investment by industrial employers was 28.5 percent less than the $748 million companies pledged to invest in 2007. But, to make comparisons with this year fair, not all the investments and job creations announced in previous years have materialized. In particular, several alternative-fuels projects that drove investment numbers up from 2005-2007 are on indefinite hold or have been canceled.
For 2007, the $748 million in investments planned should be reduced by at least $200 million, to $548 million, to account for the Wabash Agri-Products ethanol plant that still hasn't been built in LaFontaine. The 2006 investment should be reduced $200 million, to $795.4 million, to account for the Ultra Soy biodiesel plant still on hold in LaGrange County; and the 2005 totals should be adjusted downward by $100 million, to $600 million, because ForeverGreen Enterprises never followed through on its initial plan to build in DeKalb County.
ForeverGreen's current plan is to build an expanded plant, pegged at $227 million, in LaFontaine. That single project accounted for more than 42 percent of 2008's projected investment, and its future is by no means certain. The company is still seeking investors and its options on the land are scheduled to expire in February.