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Friday, July 20, 2012

Tom Still: Life after General Motors - Janesville area economy on its way back


By Tom Still
Jeff Helgesen, one of Rock County's largest developers, doesn't parse words when he's asked if the Janesville area is better off today than it was when General Motors Corp. was the 800-pound gorilla in town.

"No question about it: I think Janesville is much better off today," said Helgesen, president of Helgesen Development Corp. "We've shifted to a more technological type of business and to (computer-driven) manufacturing. We were forced to come to grips with our future."

There are still plenty of laid-off GM workers who would disagree, but the rebirth of a diverse economy in Janesville, Beloit and the rest of Rock County is a success story in the making. It bears watching by other communities in Wisconsin.

The closing of the Janesville GM assembly plant in late 2008 meant 5,000 jobs at GM and other auto-related firms were wiped out, sending Rock County into a tailspin just as the worst of the recession hit Wisconsin and the nation. The county's unemployment rate peaked around 13 percent.

Of late, however, the news out of Janesville and Beloit has been much better. Companies such as Kettle Foods, United Alloy, Universal Recycling Technologies, SSI Technologies and Kerry Ingredients have expanded.

Emerging tech companies such as NorthStar Medical Radioisotopes and SHINE Medical Technologies have announced plans to build production facilities. ANGI Energy Systems will keep its production local by moving from Milton to Janesville, and Data Dimensions, which produces business automation solutions, continued its growth by acquiring Data Exchange Center Inc. of Brown Deer.

The story may be best illustrated by the renaissance of a building that was once occupied by a succession of GM suppliers.

The 700,000-square-foot Helgesen Industrial Center was empty a few years ago but is now fully leased by companies such as John Deere Central Consolidated, Cummins Engine, Lowe's Millwork and Freedom Graphics. The latest to sign up is Miniature Precision Components, which will add about 90 jobs to its existing Wisconsin workforce of 1,000 people over the next three years.

Recalling the closing of Eau Claire's Uniroyal plant in the mid-1980s and how that facility was revamped, Helgesen decided to "subdivide and conquer." He carved the 700,000-square-foot building into smaller sections, adding the amenities and utility systems that would allow each unit to function independently. Leases were written to allow more flexibility for tenants, as well.

"Our absorption rate in the last year has been phenomenal," said Helgesen, noting the same is true for owners of many other once-empty sites in Janesville.

More than 1.2 million square feet of space in Janesville alone has been reoccupied in the past 18 months, according to Vic Grassman, economic development director for the City of Janesville. The city has a "shovel-ready" industrial park of 224 acres ready for expansion, he added, as well as a business incubator and some aggressive incentives.

"We're trying to fulfill all of the major legs of economic development – retention, expansion, attraction and entrepreneurship," Grassman said.

Other signs of progress in the area include a revival of plans to expand Interstate 90/39 between Madison and the Illinois border, as well as improvements to access roads in Rock County, which are now recording as much truck traffic as they did before GM shut down. Also, St. Mary's Hospital opened its new facilities in the last year and Janesville Mercy Hospital completed its expansion.

Communities that once feuded over development issues have also found common ground, as evidenced by joint city events such as Rock County Days in the State Capitol and a recent trade fair with more than 160 booths.

Not everything is wine and roses for Janesville and Rock County, of course. Unemployment remains well above the statewide average, one recruited firm chose not to relocate and many people are holding their breath over the drought's effects on the farm economy.

"Psychologically, however, we've turned the corner," Helgesen said. "We had to cope and we are."

The 800-pound gorilla is gone and the GM plant itself remains shuttered, but Janesville and Rock County are moving on. Crisis sometimes has a way of doing that.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal.

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