02 Feb GM Choice is Great News, But Wisconsin’s Economy Must Keep on Truckin’ to Prosper in a New Era
MADISON – It was all cheers and high-fives in Janesville last week as General Motors announced it will continue to roll trucks off the city’s GM assembly line, a decision that will keep high-wage manufacturing jobs in southern Wisconsin.
The news that GM will invest $175 million in the Janesville line means the plant will stay open for the foreseeable future, even if the company won’t say whether the plant’s total of 3,900 jobs will grow or shrink over time.
While a welcome relief, the GM announcement was also a reminder of the challenges facing Wisconsin’s economy. Keeping jobs we already have is one thing; creating new jobs is quite another.
In the same week GM decided to reinvest in Janesville, Kraft Foods said it will cut 6 percent of its global workforce, or about 6,000 jobs. That includes 1,300 salaried jobs in North America alone, and 75 at the company’s Oscar Mayer Foods’ headquarters in Madison.
Also released in late January were state Department of Workforce Development figures that showed Wisconsin lost manufacturing jobs in 2003, the fourth straight year the industry had reported a decline from the year before. The state counted an average of 515,000 manufacturing jobs per month last year, down more than 13,000 from 2002 and 79,000 from 1999, the year before the slide began.
Most forecasts say 2004 will be a much better year for the manufacturing sector – and Wisconsin can only hope that’s true. The state is so dependent on manufacturing (it accounts for nearly one in five jobs) that even a modest upswing in demand will mean better days for Wisconsin companies and workers.
But manufacturing alone is unlikely to keep Wisconsin prosperous. Across all sectors in 2003, Wisconsin had an average of 2.78 million jobs per month in 1978, up about 20,000 from the year before. Other sectors must grow, especially technology and business services, in order for Wisconsin to move ahead.
State economists, academics and business leaders have been warning for years that Wisconsin’s long-term economic health is threatened. They say manufacturing must continue to transform itself through improved technology and by producing more high-end products, which will guarantee an increasing share of the global marketplace. The GM decision to upgrade the Janesville plant is no accident: The Tahoe, Suburban and Yukon trucks being produced there must compete with trucks manufactured elsewhere in the United States and around the world.
There are encouraging signs that Wisconsin manufacturers are rising to the challenge. Exports of manufactured goods from the state are climbing, a sign that Wisconsin may be retaining and even growing companies that fit that high-end niche.
State government may be coming to the rescue, too. Four developments in the past year will yield results over time:
The state did not raise general sales or income taxes in its 2003-2005 budget, even though a multi-billion budget gap made it tempting to do so.
The state has begun shifting to a “single sales” system of calculating corporate taxes, which means companies that expand here won’t be penalized for doing so.
After years of letting its electricity generation and transmission grid slip into disrepair, the state is allowing utilities to move ahead with much-needed improvements.
The Legislature has passed and Gov. Jim Doyle has signed a regulatory reform bill that will reduce uncertainty for companies seeking to invest in new plants and equipment.
Keeping jobs we already have is only part of the solution. In fact, Wisconsin may continue to lose manufacturing jobs in sectors where state firms can no longer compete. But it may be able to add jobs in those industries where cutting-edge design, the latest technology, quality workmanship and customer service matter. That’s the future for Wisconsin manufacturing.
Still is president of the Wisconsin Technology Council and the Wisconsin Innovation Network. He is the former associate editor of the Wisconsin State Journal in Madison.
The opinions expressed herein or statements made in the above column are solely those of the author, & do not necessarily reflect the views of Wisconsin Technology Network, LLC. (WTN). WTN, LLC accepts no legal liability or responsibility for any claims made or opinions expressed herein.