City's pool of workers attracts manufacturers
The Business Journal of Milwaukee - by Alby Gallun
Unemployment is normally a bad thing, but it's a big attraction these days for industrial development in Milwaukee.
Coping with the tightest job market in decades, many manufacturers are bypassing the suburbs and taking a closer look at expanding in the city, where it's easier to find workers.
"It's where the workers are, that's why I think that's where you need to be," said Jeff Christofferson, president of Tramont Corp., which recently decided to move its headquarters from Glendale to the former Johnson Controls Inc. valve plant on Milwaukee's northwest side.
It may be a stretch to call it a trend, or even to argue that the decades-long migration of manufacturers from the city to the suburbs is over. Yet the availability of workers is clearly weighing in the city's favor these days and has been a key reason that several firms in the past few years have chosen to expand there rather than in the suburbs.
Production Stamping Corp. is one. By 1998, the metal-stamping firm had outgrown its 40,000-square-foot plant at 7026 N. Teutonia Ave. on Milwaukee's northwest side.
Although the firm looked at sites in Germantown and Sussex, it ultimately decided it would have an easier time retaining existing employees and recruiting new ones if it expanded in the city. About 30 percent of its work force lived in the central city and relied on public transportation to get to work, said company president Jeffrey Clark.
"When I looked at our work force, I would have lost that 30 percent" if the firm moved to a suburban location, he said.
Clark also was attracted by the higher jobless rate on Milwaukee's near north side, providing a pool of future workers at for the company.
In the end, Production Stamping decided to build a 116,000-square-foot plant in the Riverworks Industrial Center, the site of a former American Motors Corp. factory complex. Production Stamping employs 69 full-time employees and 30 temporary employees. The company has added about 15 positions since moving into the new plant last year, Clark said.
"When we entered this neighborhood, we had over 200 applications," Clark said. "We didn't come here to be do-gooders. This was all smart business for us."
The availability of workers also was a big reason Heinn/Trend Corp. and Reindl Bindery Co. decided in late 1997 to buy a factory nearby once used by Square D Co., said James Barry III, principal at the real estate brokerage firm James T. Barry Co. Inc./Colliers International, which worked on the transaction.
The 409,000-square-foot plant sits on the border of Milwaukee and Glendale.
Reindl, which makes hardcover and other binding, had operated out of a plant in Elm Grove, while Heinn/Trend moved from a factory at 3801 W. Green Tree Road.
Finding skilled workers has become a major struggle for many suburban manufacturers, many of which operate vans or buses to shuttle workers who live in Milwaukee to their plants.
Recent statistics illustrate the problem. Waukesha, Washington and Ozaukee counties have a combined unemployment rate of 1.8 percent, according to the state Department of Work Force Development. The labor market isn't quite as tight in Racine County, where the jobless rate is 3.4 percent.
The unemployment rate is 3.4 percent in Milwaukee County and 4.5 percent in the city.
"Sometimes, businesses (in the suburbs) have a difficult time even getting applicants, let alone qualified applicants," said Jim Scherer, economic development officer for Milwaukee's Department of City Development (DCD).
Finding qualified applicants is an issue in the city, too. Even though Milwaukee has a higher jobless rate than that of the suburbs, the workers who are available are often jobless for a reason, either because they have personal problems or lack skills.
Indeed, skilled industrial workers, such as machinists and welders, are still in short supply in Milwaukee.
To address the skills shortage, some firms have worked with economic development groups to set up training programs. Production Stamping, for instance, leases space to the Northeast Milwaukee Industrial Development Corp. for a training facility.
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