Jeramey Jannene

Residents of Janesville Flock to Milwaukee and Chicago

By - Jun 6th, 2008 03:31 pm
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The title of this post is purely fiction at this point, but is what this writer believes should happen.

Undoubtedly you’ve heard by now that the General Motors factory in my hometown of Janesville is closing. What many (politicians and residents alike) are not considering is the massive trickle down effect this is going to have on the rest of Janesville as a large source literally abandons the city. Sure the UAW has ensured that many of the employees at General Motors are not going to feel any financial pain for a long-time, but thousands of others are not as fortunate. Employees of Janesville-based GM part suppliers (of which there are many) are going to receive next to nothing as they lose their jobs in coming years.  And that’s just the start

This massive unemployment will have the effect of putting the hurt on numerous other local companies and institutions. The School District of Janesville will be faced to downsize in the face of falling property tax values (despite just having passed the largest referendum in Wisconsin history). Mercy Health System will certainly feel some pain as the number of patients remains largely steady, but their ability to pay diminishes. Oh, and the massive number of chain food choices (both fast and sit-down) that exist along Milton Avenue, look for their numbers to greatly diminish.

Assuming nothing drastic happens (read: no large employers opens shop in town or there is no mass migration from the city) Janesville residents are largely looking at a future of under-and-un-employment. Many of the GM employees will be offered jobs at other plants, but that doesn’t include suppliers and those who relied on serving them (the service industry the city seems to want to tout now).

To make matters worse, long-time Janesville employer Gilman (now split into two companies ThyssenKrupp Krause Inc. and ThyssenKrupp Drauz Nothelfer) announced they were closing and eliminating all 140 jobs. This was a local employer that at one time not too long ago employed nearly 500 people in Janesville, my father included.

Politicians, including Janesville-natives Senator Russ Feingold and Representative Paul Ryan, are already calling for aid packages or more money to be sunk into the city to encourage new employers in Janesville. Most of the companies that have recently opened (or considered opening) shop in Janesville are in the warehousing and distribution industry, an industry highly susceptible to losses from rising fuel costs (much like the SUV’s made in Janesville are). Spending money on tax breaks and credits to attract industry to Janesville seems like a losing battle does it not? Especially since they did just that a few years ago, and now are asking General Motors to pay the state back.

The fact is that companies will either consistently search for the best tax deal (leading to a long-term losing game for cities) or for the best existing environment. Beloit largely has Janesville beat on location in the wake of soaring fuel costs. Beloit is located at the intersection of Interstate’s 43 and 39/90 and is closer to Milwaukee, Rockford, and Chicago. Why would the state look to continue to pour money into Janesville then? Good question.

The state should instead take a radical approach. Jim Doyle and company should largely encourage the unemployed in Janesville to move to Milwaukee (or Madison). Why? There are more jobs in the Milwaukee area, and Milwaukee certainly has the capacity to create more jobs (look no further than the redevelopment occurring Menomonee Valley and soon the 30th Street Corridor). The old adage of “it takes money to make money” holds true in the globalization era. The big cities like Chicago are getting bigger and stronger, while the stagnant towns like Janesville and many other manufacturing towns are getting smaller.

The ironic fact is that a migration of residents to Milwaukee could actually reduce the unemployment in Milwaukee. Creating a larger base of skilled/trained individuals for jobs should only attract more companies to the region, or to expand operations in the case of existing ones.

How do we achieve this migration? Create marketing plans for Milwaukee, bring in relocation specialists to help the unemployed find work in Milwaukee, and offer tax incentives for relocating families.

While Wisconsin politicians for obvious reasons can not advocate residents to move to Chicago, the Windy City offers a substantial number of opportunities, arguably more than Milwaukee.

How do we preserve home values in Janesville and help Janesville adjust structurally? Implement an aggressive urban growth boundary that prevents building outside of designated areas to preserve the value of existing homes. This will not only limit of the dilution of home values, but encourage urban infill (through the redevelopment of existing properties) and encourage Janesville to kick to structurally kick its oil habit through reduced drive distances.

The City Council of Janesville must also actively seek to make opening businesses in Janesville as easy a process as possible. They should also seek to improve the efficiency of existing employers.

Wisconsin and the Wisconsin Department of Highways (formerly Transportation) should also implement a legitimate mass-transit from Janesville to Milwaukee. While Van Galder/Coach USA provides a route to Madison, and Chicago, there is not a mass-transit to Milwaukee. In fact when I go to visit my parent’s house, I must first take a bus to Madison, then transfer to another to Janesville.

Janesville has a substantial agricultural base on which it can seek to orient itself around in the “ethanol era” where food prices currently only go up.

The most difficult thing that must be done in Janesville is to redevelop the Delevan Drive Industrial Corridor, for as it turns out Gilman and General Motors were not only in the same city, but next-door neighbors. This will likely mean dividing those properties into smaller units so businesses can locate there.

Wisconsin needs to do everything in its power to avoid Janesville becoming like Flint and so many other towns that have lost their largest employer. That starts with not pouring money into Janesville to give residents false hope.

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6 thoughts on “Residents of Janesville Flock to Milwaukee and Chicago”

  1. KeVroN says:

    Great article with hard truths that need to be voiced. After the weekend in Portland I see what a city with long term growth plans can do and the perseverance it takes. Their downtown is really torn up right now but the city will be amazing by 2010 with amazing light rail. Keep up the in depth pieces and insight into MKE.

  2. Fonzie says:

    Very well said. What can we do to encourage this?

  3. WorkingWriter says:

    Interesting ideas. There will still be some need for retraining dollars, as Milwaukee is “The Machine Shop to the World” no longer. But certainly there’s a need for expanding the job pool here, and if it takes a starter set of skilled and semi-skilled folks from Janesville to prime the pump for more good jobs in the central city, I’m all for it. So long as there is a mass-transit option–I can see some of these folks getting hired at GE Pewaukee, but speaking of transit-commute nightmares! It’s nearly 2 hours to get from West Allis to GE on the bus! But I digress.

  4. Andy says:

    So how are all these people migrating from Janesville to Milwaukee going to afford housing in Milwaukee? They obviously (based on your doomsday ideas) will never be able to sell their houses, or will take a huge hit on them. The cost of a new construction home in Janesville currently will get you a 50+ year old home with maybe 75% of the sq. footage. janesville’s economy is must more diverse than it is made out to be. In fact, GM has eliminated more jobs at GM over the past decades than are being lost with the closing of the plant. And during that time, how much has Janesville and the surrounding area (Milton) grown?

  5. Jeramey Jannene says:

    @Andy Thanks for the comments.

    Your figures on them getting a home with 75% of the square footage are for where? Janesville or Milwaukee?

    I think it’s interesting how you (and many others) mention Janesville’s diverse economy, but never mention other major employers. If the economy is diverse who are these other employers that are going to hold Janesville strong? Mercy, the school district, and all of the companies that feed GM with parts are at the mercy of GM.

    GM just eliminated 2,700 jobs. I believe the peak employment at the plant was 7,000. Many of those jobs that were lost many years ago were shifts to using out-sourced providers. In recent years certainly they have been eliminating jobs, but having been doing it with large buyouts. The GM employees that are about to lose their jobs are certainly going to be well taken care of, but what about all the other companies that depend on GM? Those 2,700 jobs will for sure be gone, which will eliminate roughly that many home owners. How is the school district going to handle shedding jobs as there are fewer students? How are the employees at restaurants going to fair? What about the employees that aren’t protected by the UAW at suppliers?

    There is going to be a lot of pain.

    To make matters worse the former Gilman Automation plant is closing. Those employees that previously had good paying jobs are now scrambling to find other work, in other cities. I’m watching that play out already.

  6. Jeramey Jannene says:

    @Andy

    I reread your comment and you must be talking about getting a home in Milwaukee. I don’t know how you got that figure, but for the sake of the debate I will assume it’s right for now.

    What is wrong with a 50 year old home that has only 75% of the square footage? If many of the new homes in Janesville were to be 75% of the size they are not, they would still be extremely comfortable to live in. It’s not like they’re moving from a hut to a tent. With your new to 75% size scenario, they would be simply eliminating excess.

    How would they afford it? They have options. The state instead of sinking money into propping an already sinking community (Janesville in the post-GM area), could reward people with financial assistance to relocate in the state. Whether that is helping pay for the new house, buying the old house from them, I don’t know.

    Another option is of course declaring bankruptcy. Buying a new house might be difficult then.

    For those that could afford it, they could simply move.

    For those that can’t sell their house at a market rate, but need some cash, there are plenty of companies that buy homes up in mass now. I’m not saying that’s good for the seller, but it is an option to get some money.

    Others could carpool and still live in Janesville. A number of former Gilman employees are doing this already to Chicago and Rockford.

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