ARTICLE

Rural East Iowa towns forced to diversify after manufacturing losses

Art's Way employee Scott Westcott of Maynard (left) and plant manager David Bush of Ringsted walk along with a hay merger as it is moved from a truck onto the factory floor on Thursday, June 10, 2010, in West Union.  (Liz Martin/The Gazette)
Art's Way employee Scott Westcott of Maynard (left) and plant manager David Bush of Ringsted walk along with a hay merger as it is moved from a truck onto the factory floor on Thursday, June 10, 2010, in West Union.  (Liz Martin/The Gazette)

Rural Iowa communities face a steep uphill climb to win back factories lost in the recession, forcing many of them to conclude that there are better options.

The Benton County town of Belle Plaine lost about 160 factory jobs when auto-parts maker Benco Manufacturing shut down production last year. The hopes of getting those jobs back any time soon aren’t too high.

So what are Belle Plaine’s immediate hopes?

“It’s all about qualify of life,” Mayor James Daily said.

Many in the community hope that amenities such as excellent parks, improved school facilities, a main street facade program and a new aquatics center will make the town more appealing.

Daily believes young families with wage earners who work in Cedar Rapids, Iowa City and Marshalltown will like the mix of amenities and low housing prices that Belle Plaine (population 2,878) offers — enough to make a long commute.

“Then, maybe a manufacturer will say, ‘Here’s a place with great employees,’ ” Daily said.

Belle Plaine’s approach may be on the right track, said Dave Swenson, an Iowa State University economist who studies regional economic change.

Historically, rural Iowa towns had low labor costs, low land costs and a strong Iowa work ethic to offer manufacturers. With globalization, Swenson said, places like Belle Plaine, Manchester and Sigourney are competing against low-cost manufacturing hubs in China, India and Slovenia.

“Increasingly, the labor price and land price advantages aren’t that much in these towns,” Swenson said. “They have to diversify. There’s only so much manufacturing activity that they can go after.”

What’s more, small rural towns were already suffering a “brutal loss” of young adults and young families, Swenson said.

As job growth returns, he said, most of the new jobs will be created in the state’s urban centers. He projects the recovery will come first to larger metro areas, such as Cedar Rapids, Des Moines and Iowa City. That will likely cause even more young workers to leave slower recovering rural Iowa.

Rural communities haven’t lost faith, though.

The Jones County town of Monticello managed to keep its 15-plus industries in the recession, City Administrator Doug Herman said. Some cut shifts, but most have now brought back workers and restored one or more shifts.

“Service the businesses that are there,” Herman said. “We are doing well with what we’ve got, and our time is best spent making sure their needs are met.”

West Union Mayor Merlin Dunt said the Fayette County town of 2,549 hopes to attract and keep young families with a comprehensive strategy of energy-efficiency and green design.

The Iowa Green Streets Pilot Project here is a more than $8 million state-backed initiative to rebuild infrastructure in six downtown blocks, adding green amenities such as geothermal heating and cooling, water-permeable pavements, energy-efficient lighting and rain gardens.

The town lost more than 200 jobs with the closings of auto-parts producer Atwood Manufacturing and downsizing of food distributor H & H Distributing, after it was sold.

Art’s Way Manufacturing has purchased the closed Atwood factory, though, with plans to warehouse and distribute its agricultural and forage equipment there. The company also plans to manufacture some products in West Union at a later date. More than 300 people attended a job fair for about 40 positions it plans to create.

One of the harder hit rural communities in Iowa is Mount Pleasant, population 8,600, in Henry County.

Kiley Miller, executive vice president of the Mount Pleasant Area Chamber Alliance, rattles off a list of major closings and downsizings, and it’s not all coming back, he said.

“Southeast Iowa and Henry County were excessively dependent on manufacturing to sustain the economy,” Miller said. “(The recession has) given us a significant impetus to drive toward a more balanced economy.”

Local investors provided funding to help Biomedical Synergies Inc. expand in Mount Pleasant, Miller said. It was a new model of economic development for the community, but important to economic diversity.

“When these factories were built in the 1960s, diversity meant diversity in the type of manufacturers,” Miller said.

Sigourney Mayor Pat Miletich said the loss of Sigourney Foods and its roughly 70 jobs more than 18 months ago is still felt, even though most workers were from out of town. She said it’s hard to get factories to locate in Sigourney because the nearest four-lane road is a 30-minute drive.

Her hopes are in efforts to teach entrepreneurship in Sigourney schools and encourage young people to stay and start businesses.

ISU’s Swenson said the loss of young people is a sobering trend for small towns, and their best hope is to become regional trade centers, as consolidation takes place in areas such as health care, education and finance.

Rural Iowa communities face a steep uphill climb to win back factories lost in the recession, forcing many of them to conclude that there are better options.

The Benton County town of Belle Plaine lost about 160 factory jobs when auto-parts maker Benco Manufacturing shut down production last year. The hopes of getting those jobs back any time soon aren’t too high.

So what are Belle Plaine’s immediate hopes?

“It’s all about qualify of life,” Mayor James Daily said.

Many in the community hope that amenities such as excellent parks, improved school facilities, a main street facade program and a new aquatics center will make the town more appealing.

Daily believes young families with wage earners who work in Cedar Rapids, Iowa City and Marshalltown will like the mix of amenities and low housing prices that Belle Plaine (population 2,878) offers — enough to make a long commute.

“Then, maybe a manufacturer will say, ‘Here’s a place with great employees,’ ” Daily said.

Belle Plaine’s approach may be on the right track, said Dave Swenson, an Iowa State University economist who studies regional economic change.

Historically, rural Iowa towns had low labor costs, low land costs and a strong Iowa work ethic to offer manufacturers. With globalization, Swenson said, places like Belle Plaine, Manchester and Sigourney are competing against low-cost manufacturing hubs in China, India and Slovenia.

“Increasingly, the labor price and land price advantages aren’t that much in these towns,” Swenson said. “They have to diversify. There’s only so much manufacturing activity that they can go after.”

What’s more, small rural towns were already suffering a “brutal loss” of young adults and young families, Swenson said.

As job growth returns, he said, most of the new jobs will be created in the state’s urban centers. He projects the recovery will come first to larger metro areas, such as Cedar Rapids, Des Moines and Iowa City. That will likely cause even more young workers to leave slower recovering rural Iowa.

Rural communities haven’t lost faith, though.

The Jones County town of Monticello managed to keep its 15-plus industries in the recession, City Administrator Doug Herman said. Some cut shifts, but most have now brought back workers and restored one or more shifts.

“Service the businesses that are there,” Herman said. “We are doing well with what we’ve got, and our time is best spent making sure their needs are met.”

West Union Mayor Merlin Dunt said the Fayette County town of 2,549 hopes to attract and keep young families with a comprehensive strategy of energy-efficiency and green design.

The Iowa Green Streets Pilot Project here is a more than $8 million state-backed initiative to rebuild infrastructure in six downtown blocks, adding green amenities such as geothermal heating and cooling, water-permeable pavements, energy-efficient lighting and rain gardens.

The town lost more than 200 jobs with the closings of auto-parts producer Atwood Manufacturing and downsizing of food distributor H & H Distributing, after it was sold.

Art’s Way Manufacturing has purchased the closed Atwood factory, though, with plans to warehouse and distribute its agricultural and forage equipment there. The company also plans to manufacture some products in West Union at a later date. More than 300 people attended a job fair for about 40 positions it plans to create.

One of the harder hit rural communities in Iowa is Mount Pleasant, population 8,600, in Henry County.

Kiley Miller, executive vice president of the Mount Pleasant Area Chamber Alliance, rattles off a list of major closings and downsizings, and it’s not all coming back, he said.

“Southeast Iowa and Henry County were excessively dependent on manufacturing to sustain the economy,” Miller said. “(The recession has) given us a significant impetus to drive toward a more balanced economy.”

Local investors provided funding to help Biomedical Synergies Inc. expand in Mount Pleasant, Miller said. It was a new model of economic development for the community, but important to economic diversity.

“When these factories were built in the 1960s, diversity meant diversity in the type of manufacturers,” Miller said.

Sigourney Mayor Pat Miletich said the loss of Sigourney Foods and its roughly 70 jobs more than 18 months ago is still felt, even though most workers were from out of town. She said it’s hard to get factories to locate in Sigourney because the nearest four-lane road is a 30-minute drive.

Her hopes are in efforts to teach entrepreneurship in Sigourney schools and encourage young people to stay and start businesses.

ISU’s Swenson said the loss of young people is a sobering trend for small towns, and their best hope is to become regional trade centers, as consolidation takes place in areas such as health care, education and finance.

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