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Northern Indiana update: top business news in the last year.

Successes in 1991 and early 1992 were by far the norm rather than the exception in the northern region. "The downside to this recession has been pretty gentle," says Rob O'Brien, president of the Greater Warsaw Area Chamber of Commerce. "Stories of the Rust Belt's demise were greatly exaggerated. I know in this region there has been a pretty good mix of business and industry and that softens the impact on any one segment." Ten years ago, hardly anyone would have predicted that St. Joseph County would benefit from a steel boom. Nor would anyone have predicted that during a recession, Elkhart County's job force would include 107,950 workers, compared to about 65,000 in 1982.

"The jobs are here because we are perfectly positioned between Detroit and Chicago," says David Germaine of the Greater Elkhart Area Chamber of Commerce. "The trend is smaller cities and towns." Ron Barger, marketing manager for Project Future in St. Joseph County, articulates those same reasons for landing National Steel Corp.'s hierarchy. "People here are safe. People are getting tired of traffic jams. The trend is to move to green-belt communities that are within striking distance of big cities."

Even the greenest towns of the green belt--Warsaw, Plymouth and Rochester--are getting new 100-plus employee Wal-Marts without jeopardizing their downtowns. "You keep hearing about downtowns drying up," says Dave Damron of the Fulton Economic Development Corp. "The storefronts are in good shape and almost everything is full. Retail is as healthy as it's been for a long time."


The second phase of the Inland Steel-Nippon Steel Corp. project--I/N Kote--injected $550 million into the Indiana prairie as 1,280 construction workers labored in 1991 on the 260-foot-high, 1,500-foot-long plant that adjoins the I/N Tek plant. The I/N Kote facility, with 130 new employees, put its two lines into operation in September and November, joining the 260 full-time employees at I/N Tek. Eventually, the combined operations will employ 500. Both finishing facilities take steel milled at Inland's East Chicago works. I/N Kote applies a "hot dip" process that feeds rolled steel through a molten bath of zinc. Its second process involves electrogalvanizing. Both are in high demand in the auto industry. "Tek is still on the learning curve," says George Landsley, spokesman for I/N Tek. "By the end of the year, we will be at the million ton a year rate. I/N Kote will be on a learning curve for a year to 18 months."

Mishawaka Mayor Robert Beutter calls National Steel's decision to move its headquarters from Pittsburgh to a 124,000-square-foot, $10 million office building "the ultimate compliment." The nation's fourth largest steelmaker will bring in 380 families with $50,000-plus incomes.

Project Future will spend much of its energy this year on the Airport 2010 Project that will combine an office park, golf course, corporate hangars and an industrial park tied in with Michiana Regional Airport. That facility will offer direct access to U.S. 31, the Indiana Toll Road and the South Shore Railroad commuter line. Airport 2010 is an outgrowth of the Airport Industrial Park project, which is in its fifth and final stage of development, sporting 90 buildings, 120 firms employing 4,700 workers and an annual payroll of $121 million.

Another goal is to lure the College Football Hall of Fame from King's Island in Ohio. Barger estimates the museum, which would further capitalize on the legacy of the University of Notre Dame and Knute Rockne, could funnel in more than 100,000 visitors a year to downtown South Bend's Century Center complex.

Also, the Pentagon announced that LTV's AM General will continue to produce the Humvee all-terrain vehicle at its Mishawaka plant, giving the area its biggest defense-related contract. The one potential blotch will be the proposed loss of a Uniroyal division at its aging Mishawaka plant. Barger says the loss could be mitigated if Uniroyal expands another local division.


There was a "spooky" period for the recreational-vehicle industry in September 1991. "Many of the companies had a three- to four-week backlog of orders," says Germaine of the Elkhart chamber, "but at the end of the month, there were none. It was like someone turned off the tap."

Then General Motors told van-conversion companies that all 1992 orders had to be submitted to its Lordstown facility by December 1991. That required van converters to make huge orders in the midst of a bleak economy. "We had a lot of vans sitting around here earlier this year," says Germaine. "The van industry is doing well. Orders are up."

In 1991, 50 new businesses opened and 36 expanded in the Elkhart area, Germaine says. Shelter Components, LaVanture, Daman Corp., Four Winds, Dexter Axle, Alternative Mobility, AcuCom and All-Pro Industries all announced sizable expansions. The best news, however, came from Miles Inc., maker of vitamins and other pharmaceuticals. It announced a $60 million expansion project with a potential for 90 new jobs after its parent company, Bayer A.G., had announced it was moving Miles' corporate offices out of Elkhart.

The biggest dose of bad news came with anticipated loss of 650 jobs at Whitehall Laboratories after American Home Products moved its production of Advil and Anacin to Puerto Rico. "There are not many $13- to $14-an-hour jobs to replace those," Germaine says. "That represents less than 1 percent of our work force. Will it devastate the economy? No. Will it devastate those people? Yes."

Concludes Germaine: "When you go back and ask people about 1991 and what they remember about it, people will say 'The terrible economy.' But all in all, we did very well."


Kosciusko Development Inc. was formed back in 1984, but 1991 became its watershed year of ideas. It had been a player in bringing an industrial park to Pierceton and sewers to Mentone, but in recent years, had been dormant. O'Brien saw Warsaw enjoying great success with its orthopedic firms, but discovered towns like Syracuse and North Webster "had a desire to have sufficient infrastructure to look for new firms. High school basketball has done more to promote turfism in Indiana," he says.

Yet, when KDI reached out to smaller communities, they accepted. "KDI will help Syracuse become more aggressive in attracting light industry," says Don Strouse of the Syracuse/Wawasee Chamber of Commerce.

This year, KDI is seeking companies that offer distribution, telecommunications and marketing. "These are the types of companies that will help diversify our base," O'Brien says.

That base is already heavily into exports. Sun Metal of Warsaw, for example, is setting up a new plant in North Manchester to manufacture spoked wheels for its expanding markets in the Far East. Chore-Time Brock of Milford, which makes grain bins, egg handlers and feeders "just had a terrific year," O'Brien says. The 600-employee company is pushing exports to Eastern and Western Europe and the Pacific Rim.

Add to that the great success of the four biggest orthopedic firms--Zimmer, Biomet, DePuy and Danek, which all expanded--and it's no wonder O'Brien sees a bright future. Zimmer is completing a 100,000-square-foot headquarters near Center Lake in downtown Warsaw. Danek, formerly Warsaw Orthopedics, offered stock publicly and is expanding into hip and knee replacements. The orthopedics segment of the county work force is near 4,000 directly and hundreds more jobs in supplier capacity.

The big setback for the county came with one of its most durable employers. The publishing firm of R.R. Donnelly & Sons went through a downsizing at a cost of about 50 jobs. "Donnelly had been a stalwart," says O'Brien. "While the loss of jobs wasn't that big of an impact, it got people's attention. When you talk of R.R. Donnelly and what happened there, it added impetus to KDI.


The Plymouth area has seen a lot of its existing industries expand, but is bracing for the potential loss of 280 jobs at its United Technologies plant. A decision has yet to be made there. The gains have come with companies like Citrus Hill, which doubled in size with 50 new employees who will make a new drink line, Sunny Delight. Aker Plastics, Astro Val Corp. and R&J Manufacturing--the maker of Hoosier Racing Tires--are all adding 10 to 30 employees. A new company, Illumicell, will add 30 jobs with a new plant that will make cellular towers.

Plymouth has been able to attract a number of small businesses such as Carter Lumber, Wendy's, Dunkin Donuts, Super 8 Motel and, later this year, Wal-Mart. "We've weathered the recession pretty well," says Bill Neal, executive director of the Plymouth Economic Development Corp. "Obviously, we are concerned about the status of United Technologies. To lose them would be a big blow."

But in the next breath, Neal reports that downtown Plymouth virtually has reached full retail and office capacity and the city's industrial park with 65 companies is "getting close to filling out." He adds that his agency will be pushing industrial ground available.

Neal's pitch for 1992 is access to highways--U.S. 30 and U.S. 31--and "fair labor rates. We've got a suburban setting and good access," he says.


This is a county that dodged what would have been a painful bullet. In 1991, McMahan-O'Connor Construction Co. announced it was going to liquidate this fall. That would have meant the loss of 100 jobs for the 60-year-old company. But E&B Paving of Anderson purchased the company and offered jobs to all employees. Rochester will lose Safeway Steel Corp. which is consolidating operations in Charleston, S.C., but with a loss of only 15 jobs. It once had employed 60 people.

Like Plymouth, Rochester is benefitting from about 150 new jobs at a Wal-Mart store. "The downtown merchants had initial fears, but it hasn't forced any businesses out and may be bringing more business in," says Damron of the Fulton EDC. A new 60-room Comfort Inn gives Rochester first motel capacity. Fulton Industries, a precision machining firm, has pending a 30-job expansion to its 110-worker base. A&T No. 2--a division of Almega Tru-Flex, which builds wiring harnesses for appliances--is expanding from Bremen, bringing 25 to 30 new jobs. Field Power, which makes cylinder sleeves for engine blocks, has called back all of its laid-off workers and now has around 130 employees. And local officials currently are working to attract a pork or beef processing plant. The Fulton EDC's message to prospective employers, in Damron's words is, "quality of life, low utility rates and land prices, and the availability of labor."


This is Indiana's fastest-growing county in population rate, but as far as a potential accompanying industrial boom, "We don't want it," states Debra Terrell of the LaGrange County Chamber of Commerce. Terrell would be happy if a quality hotel chain would build 100 rooms at the intersection of Ind. 5 and U.S. 20 to handle the 45,000 tourists each week that flock to the Shipshewana Flea Market from 10 states. The county has only 180 hotel rooms.

"Tourism is what I would like to focus on," Terrell says. "It's clean and manageable. You can start out selling bread and pies along the side of the road. Then you can build a stand. Then you can add vegetables and then you can build a bakery," she says. The Indiana Toll Road has made Shipshewana a big draw--on the scale of Cedar Point or Six Flags amusement parks--except that instead of all the kids, buses bring tourists with fat wallets from Chicago, Detroit and points beyond, and folks regularly cruise in with their $100,000 RVs. "They come here to spend money," Terrell emphasizes.

That's not to say the county turns its back on development. A countywide sewer district was established last year, in part to keep water quality in its dozens of lakes from deteriorating. "If we ran a sewer line up to Howe, I'm sure it would take off," she says. The town of Topeka lost one big employer, Harris Cap, which moved 130 jobs to Fort Wayne. Some workers make that 60 mile commute. Harris left, in part, because of high fire insurance rates--there is no full-time fire department there.

Several companies are looking at Topeka to relocate. That's fine with Terrell, but she seems even more excited about more bed and breakfasts opening up, or the nine office spaces that opened in the town of LaGrange last year that were quickly filled, or that 12 new small businesses opened up to replace the six that were lost.
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Title Annotation:Regional Report North
Author:Howey, Brian A.
Publication:Indiana Business Magazine
Date:May 1, 1992
Previous Article:Is bigger better?
Next Article:Overnight in Northern Indiana.

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