econscius

Stimulus Recipient Among Illinois Mass Layoff Notices… Indiana Welcomes Another Illinois Company

In American Recovery & Reinvestment Act (Stimulus), Economy, Illinois, Indiana, Job Creation on August 3, 2011 at 9:32 pm

Today’s Yahoo News story “Ominous signs of surging layoffs in Illinois, nation” [1] reports mass layoff notices.  Let’ see why these layoffs are happening.  An AP story explains why A-1 Wire was closing its Rockford, Illinois operation, laying off 51 employees:

“ELKHART, Ind. — The Indiana Economic Development Corp. says a producer of high-performance engineering alloys is moving its operations from Illinois to Indiana, creating up to 100 new jobs by 2014.  THE IEDC said Saturday that Special Metals Corp. will move its A-1 Wire division from Rockford, Ill., to a 50,000-square-foot plant in Elkhart starting in September.” [2]

The State of Indiana is one of many that has targeted Illinois companies for relocation after Illinois raised its personal and corporate income tax rates in January 2011. 

On-Cor Frozen Foods is moving 85 jobs out of Illinois [3].  This is interesting because last fall, On-Cor was the beneficiary of Stimulus tax-exempt financing to open a new facility in the Chicago suburb of Geneva. [4]  As reported 11/6/10 in the local newspaper:

“GENEVA – Kane County officials are getting ready to issue $10.25 million in recovery zone bonds to facilitate On-Cor Frozen Foods’ relocation to Geneva.  Under the American Recovery and Reinvestment Act of 2009 the county can issue up to $41 million in bonds to stimulate the economy through low-cost, tax-exempt financing.  The proposed bonds are intended to help companies with financing for buying or improving property or for buying equipment. The bonds do not create an obligation for the county or the taxpayers, but will be paid back by On-Cor, officials said.  Sherry DeMeulenaere, treasurer for a limited liability corporation that owns most of On-Cor, said the bonds will pay for equipment used to process frozen foods… “We have an existing workforce in Chicago and jobs will depend on how many will come out to Geneva.  We have 85 jobs downtown and we expect to create another 46.” [4]

So much for the job creation in Illinois.  46 minus 85 is a negative number.  Might those “46 jobs” at the new Geneva facility be among Stimulus jobs the Administration’s website counts as created? 

“Furniture maker Clarin is closing in Lake Bluff, telling the state that it’s letting 75 workers go due to the sale of its assets. ” [5]  This site is Clarin’s corporate office and manufacturing plant.  Ironically, Clarin’s website is proud President Hebert Hoover sat in a Clarin chair.  [6] [7]  Clarin survived the Great Depression but not the Great Recession.

President Herbert Hoover sitting on a Clarin chair

Atlanta-based Consolidated Container is a good-sized operation with 65 facilities; I could find no word on why they’re closing in suburban Chicago. [8]

Pacific Coast Feather is a large company from Seattle, WA.  No word on why it is closing a facility in Des Plaines, Illinois. [9]
 
Schofield Media Group LLC in downtown Chicago is closing, affecting 107 employees.  Schofield was a $25 million revenue company and is closing operations after “unexpectedly” losing its bank financing. [10] 
 

The Chicago Sun-Times “will eliminate 456 jobs in Chicago starting in late September through year-end. Most of the jobs are unionized and include electrical workers, machinists, mailers, operating engineers, pressmen, paper handlers and Teamsters who serviced the soon-to-close plant at 2800 S. Ashland Ave.” [5]

Some of these closings are not surprising; Borders is closing everywhere.  Retail operations like Shopko, restaurants or garden centers may close due to competitive stresses or because of weakness with local consumers.  A weak economy may reflect high local unemployment, which might be expected when companies like A-1 Wire, Pacific Coast Feather, On-Cor Foods, Clarin Seating and Schofield Media close or leave.  The Illinois economy is not working very well and Illinois does itself no favors with an unattractive tax and regulatory environment.

  

[1] http://news.yahoo.com/blogs/chicago/ominous-signs-surging-layoffs-illinois-nation-132147422.html?bouchon=602%2Cil

[2] http://articles.wsbt.com/2011-07-16/elkhart-county_29783101

[3] http://www.examiner.com/independent-in-chicago/10-large-companies-closing-or-leaving-illinois 

[4] http://www.kcchronicle.com/2010/11/06/on-cor-on-tap-for-bonds-geneva-move/aqusss1/

[5] http://articles.chicagotribune.com/2011-08-02/business/chi-10-illinois-companies-tell-state-theyll-cut-1100-jobs-by-yearend-20110802_1_job-cutting-jobs-in-plant-closings-job-losses

[6] http://www.clarinseating.com/about.php

[7] The picture of Herbert Hoover in a Clarin chair is from Yahoo! Images http://images.search.yahoo.com/images/view?back=http%3A%2F%2Fimages.search.yahoo.com%2Fsearch%2Fimages%3Fp%3Dclarin%2Bherbert%2Bhoover%26ei%3DUTF-8%26fr%3Dyfp-t-892&w=118&h=192&imgurl=www.clarinseating.com%2Fimages%2Fabout_us%2Fabout-us_right_img_2.jpg&rurl=http%3A%2F%2Fwww.clarinseating.com%2Fabout.php&size=5KB&name=President+Herber…&p=clarin+herbert+hoover&oid=8e622c509a44a00989da692e63fb24cd&fr2=&no=1&tt=4&sigr=116rkq78b&sigi=11u46dl55&sigb=12q1bl78i&.crumb=hHoSiPH8Zmf

[8] http://www.cccllc.com/facilities.php

[9] https://www.pacificcoast.com/about-us

[10] http://www.foliomag.com/2011/schofield-media-shutters-u-s-operations

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