News Item: “Motorola Inc. will close its only U.S. cellular-phone manufacturing operation, putting 2,S00 of 5,000 people out of work to ease sagging profits amid increased global competition. Employees who will remain at the 1.3 million square-foot plant that opened in 1996 will focus on research, marketing and other activities for the cellular market…” (“Motorola cuts 2,500 in Harvard,” Rockford Register Star, January 21, 2001).


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The first announcement came like a thief in the night. Only four years ago. Motorola’s Harvard plant had opened to great fanfare: Politicians and business leaders viewed Motorola’s investment in Northern Illinois as a sign that the greater Rockford area was poised to ride the crest of the high-technology wave. Perhaps it would have, if that wave hadn’t come crashing to shore. The Galvin family, who founded Motorola in 1928 and run it to this day, seem to be Midwestern patriots who would rather keep the bulk of their operations in the United States. But the dirty little secret of NAFTA and the NATO was not the immediate job losses—which were covered up by both the Clinton administration and its “conservative” critics— but that the rules of the current “free trade” regime are structured in such a wav that a company like Motorola may not be able to survive an economic recession without transferring jobs overseas. To keep its cell phones, modems, and semiconductors cutting-edge and competitive, a high-tech company must spend vast sums on research and development. It would be economic suicide for Motorola to cut R&D in order to continue employing Americans when it can legally tap a vast pool of lower-wage workers south of the border and overseas.


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News Item: “PrimeCast Inc., a foundry once owned by Beloit Corp., will shut down in March because it couldn’t replace the work lost when Beloit Corp. closed. Atchison Casting Corp…. made the announcement to PrimeCast’s 160 workers Tuesday. . . . PrimeCast opened in 1958 and, at one time, was South Beloit’s second-largest employer with more than 300 workers” (“PrimeCast foundry to shut down in March,” Rockford Register Star, January 25, 2001).


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“The business of America is business,” Calvin Coolidge said in 1925, but Silent Cal couldn’t have foreseen the day when some “American” businesses would employ predominantly foreign workers. What are the long-term prospects of an industrial city like Rockford when national economic growth depends not so much on the sale of American-made products overseas, but the reduction of wage costs for U.S.-based multinationals? What does it mean for the economic health of families in Northern Illinois when the necessities of life—food, clothing, even medicine—may bear an American brand name, but are produced overseas? Since 1973, both trade restrictions and average household income—measured in real dollars—have declined, while the average number of hours worked per household has risen. In other words, fathers and mothers are spending less time with their children simply to maintain a constant income. At best, that means young children spend more time in daycare. Here in Rockford, it usually means more government-school indoctrination: Almost all local public schools have full-day kindergarten, and over half of all preschoolers in Rockford participate in early childhood education. As higher-paying jobs leave our community and fathers and mothers compensate by taking two or more lower-paying jobs, we move ever closer to Hillary Clinton’s “village.”


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News Item: “DaimlerChrysler said Monday it will cut 26,000 jobs—including nearly 1,000 in Belvidere—and shutter six plants outside the United States in an effort to stem losses at its financially struggling Chrysler division. By July, the second shift will be eliminated at the Belvidere plant, where 3,300 workers assemble the Neon. Sales of the small car dropped 11 percent last year, and local autoworkers have been idled since Jan. 22 in an effort to reduce inventories. . . . Chrysler is the largest manufacturing employer in the Rock River Valley but will lose that ranking to Hamilton Sundstrand, an aerospace and industrial parts maker that employs 2,900 in Rockford” (“Chrysler to slash 26,000 jobs,” Rockford Register Star, January 30, 2001).


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The shipping of jobs overseas is simply the latest step in a process of consolidation that has been weakening the industrial base of the Midwest for decades. With its acquisition by Daimler, Chrysler obviously ceased to be an American company, despite the attempt to paint the merger as an “equal partnership.” But the acquisition of smaller American companies by larger ones has been just as damaging. When United Technologies Corporation of Connecticut bought out Rockford’s Sundstrand Corporation in June 1999 and merged it with their Hamilton Standard division, they cut 500 local jobs within three months. The official history of Hamilton Sundstrand (found on the company’s website at www.hamiltonsundstrandcorp.com/ About/history.htm) is littered with dozens of mergers and acquisitions. Like Chrysler, United Technologies may find that an economic slowdown could make it vulnerable to foreign acquisition; to prevent becoming the object of a merger, it may end up moving even more of Sundstrand’s operations out of Rockford.


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News Item: “The domino effect of manufacturing cutbacks at DaimlerChrysler and Motorola has reached another employer in the Rock River Valley—Textron, which is laying off 75 people from its fastener operations. . . . Textron has had its own problems of late, having registered a loss of $218 million in the fourth quarter of 2000. Last fall, the company said it would close up to 20 plants in a major corporate restructuring. Just last week, Textron cut 3,600 jobs and announced the closing of five plants. . . . Textron still has more than 3,000 workers in the Rockford area and remains the fourth-largest employer in Winnebago County” (“Chrysler, Motorola cuts force layoffs at Textron,” Rockford Register Star, January 31, 2001).


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News Item: “If the production line remains permanently idled, . . . 25 percent of the displaced Chrysler workers will never re-enter the area job market. . . . ‘For every assembly job at Chrysler, there may be six to seven jobs affected in the regional economy,’ said Mike Flynn, director for the office of automotive transportation at the University of Michigan” (“Chrysler layoffs cause ripples,” Rockford Register Star, January 31, 2001).


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Rockford’s congressman, Don Manzullo, used to trumpet his support for free trade on his congressional website. After the recent job losses in his district, however, the website now notes that he “has been a leader in promoting and encouraging exporting opportunities for small businesses.” Perhaps the rhetorical shift is just savvy public relations, but it’s also possible that Congressman Manzullo has come to realize that “free trade” today does not imply David Ricardo’s “comparative advantage.” While Ricardo never states it explicitly, his understanding of the benefits of specialization and trade assumes that the profits of production remain at home. In his famous example of comparative advantage —England specializes in producing cloth while Portugal turns to wine-making—Ricardo never considers the possibility that the Portuguese might try to buy up the English textile mills so that they can keep all of the profits for themselves. Today, however, Rockford and other cities throughout the industrial Midwest are beginning to resemble colonies of East Coast, West Coast, and foreign corporations. The only profits that remain in our community are those that are spent on wages.


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News Item: “ShopKo Stores Inc. . . . will close 23 discount department stores, including one in Rockford that opened 20 months ago on East State Street. The ShopKo closings are the result of a restructuring plan that will cut 2,500 jobs, including 114 in Rockford, most of which are part-time positions” (“ShopKo to close Rockford Store,” Rockford Register Star, February 1,2001).


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News Item: “Home sales in Winnebago, Boone and Ogle counties declined in January by 13 percent from the same month last year. . . . Brooks Precision, a metal grinding shop . . . , announced that it is closing. The move throws 38 people out of work. And Foresight Financial Group, which operates four area banks at eight locations, reported a 29 percent drop in net earnings” (“Local home sales down; new layoffs,” Rockford Register Star, February 2, 2001).


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As corporations have cut manufacturing jobs in Rockford, the rest of the local economy has suffered as well. Over the last 20 years, locally owned businesses in Rockford’s downtown have fallen victim to chain stores and restaurants on East State Street. Now, as larger chains enter the Rockford market and compete successfully for declining income, many of the smaller and older chains are shutting their doors. And with each round of consolidation and closings, more personal income leaves the area. Even though Rockford is the “most affordable housing market” in the country (thanks largely to our decade-long school-desegregation suit, which has made Rockford’s property-tax rate one of the highest in the nation), home sales continue to decline. Tasting the blood in the water, Chicago developers are planning to build low-income apartments and townhouses on the edge of our town—to siphon off more local money.


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News Item: “Textron Inc. . . . said it will lay off another 500 workers. It wasn’t immediately clear . . . how many of these job cuts will be made in the Rockford area. Estwing Manufacturing also has laid off 25 of the more than 400 workers at its Rockford plant” (“National unemployment rate grows as more local jobs cut,” Rockford Register Star, February 3, 2001).

News Item: “Textron . . . laid off 40 production and salaried workers Friday at local operations formerly known as Elco” (“58 local jobs lost at two fastener plants,” Rockford Register Star, February 8, 2001).

News Item: “Another wave of layoffs is hitting Ingersoll Milling Machine Co. employees, with 50 to 70 workers losing their jobs this week and next…. Less than two months ago. Milling Machine laid off an undisclosed number of workers. Earlier in the year, the company eliminated more than 70 jobs” (“Ingersoll adds to its layoffs,” Rockford Register Star, February 10,2001).

News Item: “Eighty-five workers lost their jobs this week at Textron’s fastening system operations in Rockford and Belvidere.” (“Textron cuts 85 more at 2 local plants,” Rockford Register Star, February 10, 2001).


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In 30 short days, the Rockford area lost two businesses, well over 4,000 manufacturing jobs, and over 100 retail sales positions. And that’s just the tip of the iceberg: The Rockford Register Star reports that, in the preceding 18 months, nearly 20 area companies “downsized.” As any high-school physics student knows, there are two ways to inflate a balloon; Blow air into it, or tie it off and place it in a vacuum. From our vantage point here in Rockford, it’s beginning to appear that the “longest period of economic expansion in American history” was the result of that “great sucking sound” Ross Perot warned us about.


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News Item: “Kelly-Springfield Tire Co. will lay off 100 workers for two months because of slowed sales of light trucks. Two years ago, the company trimmed 850 jobs —half the work force —at the Freeport plant. Its parent, Goodyear Tire and Rubber Co. . . . , sought to reduce costs by moving operations outside the country. More permanent cuts could be coming to the Freeport site: Goodyear said Wednesday that it will slash 7,200 jobs worldwide to stem financial losses” (“Tire maker lays off 100 for 60 days,” Rockford Register Star, February 16, 2001).