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Northwest Indiana update.

Although the Calumet Region has been in an economic slump lately, things may be looking brighter for the region. Among other hopeful signs, Northwest Indiana is being eyed by a Fortune 500 company as home for a testing facility.

Boeing Co. says Portage is one of five sites being considered for a $1 billion wind-tunnel research center to test aircraft and components. If Portage is selected, it will mean 300 jobs, although the facility won't be operational until 1996.

The Northwest Indiana site has several factors working in its favor. Electricity and water are abundant and inexpensive in Portage, and only 90 miles away is Purdue University, with which the company has a long-standing relationship. The five sites were chosen from an original list of more than 150; other finalists are in Ohio, Kansas, Tennessee and Idaho. A decision on the wind tunnel is expected in the next few months.

Another positive development in the past year was the opening of the Hammond Marina. The multimillion-dollar facility has more than 1,100 slips, making it the third-largest in the nation. Though much of its impact is still on the way, it is expected that people using it will begin to spend more time--and money--in Northwest Indiana. Developers hope it will be a catalyst for other area developments, including a shopping center or a golf course.

But the biggest potential plum on the horizon is the planned third Chicago-area airport. Five locations are vying to win approval for the multibillion-dollar project, two of which include Indiana acreage. Gary Regional Airport is one of the proposed sites, and another straddles the Indiana-Illinois state line in western Lake County. The other three sites are in Illinois.

The Northwest Indiana Forum last summer commissioned a telephone survey of 400 Indiana and Illinois residents, and found that the Gary site was the most-favored location. Residents of both states listed it ahead of the other four locations. In second place was the so-called "bi-state" site west of Cedar Lake, which includes some 2,500 acres of Indiana land. Again, it was the second choice among both Indiana and Illinois residents.

The economic-development organization is promoting the Gary site as the "fair-share airport solution," because it is expected to deliver a roughly even share of economic benefits to both states. There has been no announcement as to when the final choice will be made by a committee with members from both Illinois and Indiana, but it could come as early as this month. It is not expected that the third Chicago-area airport would be operating before the late-1990s.

But even with such hopes being generated by what could happen this year and beyond, Northwest Indiana's economy still is driven largely by steel, which suffered some disappointments and took some heavy hits this past year.

Most recently, Northwest Indiana's hopes of landing a Fortune 500 company headquarters were dashed when National Steel Corp. chose to build its main offices in Mishawaka instead. The nation's fourth-largest steelmaker currently is based in Pittsburgh, but said it wanted a headquarters located closer to its mills in Portage and the Detroit and St. Louis areas. A site in Merrillville was in the running, along with a site in St. Louis, but the company in early December picked Mishawaka.

The past year began with uncertainty over a contract with steelworkers at U.S. Steel's Gary Works and ended with a strike by independent steel haulers that was aborted in court. But even with those contract problems seemingly solved, the numbers for many of the region's mills were decidedly red.

Bethlehem Steel Corp., the largest employer in Porter County, posted a $66.9 million loss in the third quarter. At Inland Steel Co., which has a plant in East Chicago, the third-quarter loss was $18.8 million. At National Steel Corp., red ink was $3.3 million in the third quarter. And Dallas-based LTV Corp., which has a plant in East Chicago, remained bogged down in a Chapter 11 bankruptcy proceeding.

As a result of those numbers, Inland Steel is threatening job cuts from its work force of 14,000. Already, it has laid off 1,000 workers. National Steel President Ronald H. Doerr made the same types of threats when he visited the Midwest Division in Portage in September. He told the division's employees there that the company was instituting an austerity program and that wage cuts, layoffs and even bankruptcy were possible, if the bottom line did not improve.

But despite the slump, steel makers are looking to the future. U.S. Steel plans to invest $20 million to upgrade its electrogalvanizing line at its Gary Works, and in September last year, the company dedicated a new $240 million continuous caster. In the past year, it also has invested some $20 million in modernization of its plate mill and $110 million for a complete rebuilding of a blast furnace. The facility's casting capability has grown to more than 7 million tons annually, which is the largest in North America.

There was other hopeful news as well in the past year. In Porter County, Magnetics International Inc., a subsidiary of Inland Steel, opened a new $25 million pickle liquor plant in Burns Harbor. Magnetics employs 40 people in a 35,000-square-foot plant and produces about 25,000 tons of iron oxide a year from depleted acid solutions it salvages from the region's steel mills.

The area's banks also grabbed headlines, not because of problem loans but because they were attractive targets for larger, out-of-state banks.

National City Corp. of Cleveland purchased Merchants National Corp. of Indianapolis, parent of First National Bank of East Chicago, for $641 million. Once the merger is completed, National City will become the 24th-largest bank in the country. Though Merchants subsidiaries like the East Chicago bank will keep their names for now, National City is expected to pass along its name sometime in the future.

Detroit-based NBD Bancorp acquired Gainer Bank, Northwest Indiana's largest with more than $1 billion in assets, for $134 million. When the merger is completed, Gainer will push NBD to 27th-largest in the country.

The housing sector also reflected confidence in the region as well. Western Lake County is one of the hottest real-estate markets in the state, because of the fact that houses and land in Lake County are cheaper and taxes lower than in Illinois. Illinois residents are finding they can buy almost twice as much house in Indiana as they can for the same money in Illinois.

The hottest segment of the residential real-estate market is for houses costing $150,000 or more. Communities such as St. John, Munster, Schererville and Dyer in Lake County all saw increases in the number of building permits last year. The story was the same in Valparaiso, Chesterton and Portage as well as in unincorporated areas of Porter County.
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Title Annotation:economic conditions
Author:Richards, Rick
Publication:Indiana Business Magazine
Date:Jan 1, 1992
Words:1143
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