Illinois manufacturing sector seen as idling as Toyota steers away
The recent decision by Toyota and Mazda against locating their new factory in the DeKalb area has left frustration if not downright puzzlement in its wake, especially since Illinois ranked fourth among the finalists, according to DeKalb County Board Chairman Mark Pietrowski.
Some are ready to blame what could be termed an “anti-business” atmosphere for the loss, according to an editorial on the website of WVIK, the Quad Cities NPR affiliate.
Quoting an interview from Crain’s Chicago Business with Mark Peterson, president of Intersect Illinois, WVIK said that Peterson blamed the state’s lack of a right to work law, which prevents unions from requiring workers to join.
The three other contenders, all apparently in the southeast, have right to work laws, according to Peterson.
The Illinois Manufacturers' Association (IMA), a 4,000-member trade association and lobbying group, has taken a middle-of-the road approach when assigning blame for the state’s failure to land the new plant, waxing optimistic while recognizing the need for change.
IMA Vice President Mark Denzler acknowledged the so-called anti-business atmosphere and the impact it has had on job growth, saying that since 2000, Illinois has lost 300,000 manufacturing jobs while neighboring states like Wisconsin, Indiana and Michigan have added jobs in the sector.
“Illinois continues to shoot itself in the foot with higher taxes and more regulations,” Denzler told Prairie State Wire. "We’re significantly higher when it comes to workers' compensation and unemployment insurance costs, so I would say taxes and regulations make it more difficult to do business in Illinois.”
But giving up on the state’s prospects is not something the IMA recommends, according to Denzler, despite the loss of a plant with 4,000 potential new jobs.
“We have great advantages," he said. "We have a central location, we have a great workforce, there’s access to clean water, we have great colleges and universities, we have a great infrastructure system. So we have a lot of advantages going for us.”
The political fault lines in the battle to reform the state’s business environment become clear when leaders discuss solutions. In a press release, Jake Lewis, director of Illinois Working Together (IWT), blamed Gov. Bruce Rauner for the Toyota/Mazda failure, as well as the loss of 12,000 manufacturing jobs.
"Today's announcement is yet another example of the economic damage Gov. Bruce Rauner has inflicted upon Illinois," Lewis said on IWT’s website. "Gov. Rauner has created widespread economic uncertainty that has caused long-lasting damage to Illinois' business climate. While Gov. Rauner trashes' Illinois economy, job growth has sputtered and our bill backlog has soared.”
Denzler disagreed, arguing that Rauner has “championed (the state’s) economic climate.”
“He’s called for tax reform and workers' compensation reform; he’s issued a number of points to make the Illinois economy better,” Denzler said. “But he’s been rebuffed by Democrats in the General Assembly.”
The situation in Illinois mirrors that nationally, with the Trump administration, like Rauner, urging policies that are more conducive to business, according to Denzler. These include tax and regulatory reform, two areas the current administration has promoted, he said.
The federal Bureau of Labor Statistics forecasts that the number of manufacturing jobs will drop to 11,374,200 by 2024, down from around 14 million in 2004. Part of that could be the result of advancing technology, according to a New York Times article from December.
Despite these changes, Denzler remains positive about the industry.
“Automation has changed the face of manufacturing, no doubt about it,” Denzler said. “But someone (still) has to make those machines. Manufacturing creates wealth in this country, and manufacturers will continue to be innovative, be entrepreneurial and create groundbreaking products.”