We've taken a hit.

How will we recover, in The Cities?

[lively music] [music ends] Imagine 2700 job evaporating in less than a week.

If we were in the 1980s in the depths of the farm equipment industry recession, it would be all too painfully fresh.

But now, some 40 years later, it's happening again as Tyson Foods announced the closure of its Joslin meatpacking plant.

But it's not quite the same thing.

The farm crisis hit Deere, Cat, Farmall, Case and other higher paid union workers, decimating the Quad City economy.

Now it's still 2700 families, 2700 paychecks, 2700 reasons to worry about the economic impact.

So we want to talk about that impact.

And we're joined by economist data scientist and Quad Cities Chamber Director of Business intelligence William Polley.

Well thanks for joining us.

As a person who's an economist trained as an economist, but also, a person with both feet deep into reality of day to day operations, did this announcement from Tyson regarding the Johnson plant catch people by surprise?

It did.

This is not something that I think anyone was expecting to happen now.

And and this suddenly in this way.

But, and lookin back on it, it's not something that, we are shocked by in the sense that that this is the kind of thing that is happening across the country.

They've closed other plants.

We know that demand for beef is down.

So looking in the rearview mirror, we understand the reasons for it.

But the timing and and that it happened here in this way is definitely a surprise.

Well, and the fac that it's the suddenness of it, I mean, it's not like a partia closing or just a ramping down.

It's lock, stock, and barrel.

Right, right.

So we've seen that in some other, other communities across the Midwest as well.

Nebraska had a very high profile, closure of, the Tyson plant as well.

And with this one, they're consolidating and in some other states.

So, looking at the reasons for it, it's the decline in demand and the fact that, over the last 20 years or so, we've seen people substitute away from beef towards chicken and fish and those, those other, sources of protein.

And, and so, that's not to be unexpected in this, in this period of declining demand.

That is interesting that I guess, in a way, you don't really think of it in that way that that somebody in New York or California, probably not Texas, is eating less beef, and then it has an impact in the Midwest.

It's all supply and demand.

Across the country and really across the world, because over the last couple of years, we've seen more, with the discussions of trade.

And are we going to import more beef from South America, for example?

What if there's a tariff situation for beef?

All of that factors in and and of course it's affected the supply chains and in the beef industry and making it more difficult, so that those are the reasons and looking back on it, you can say these are the reasons, but it was still very unexpected.

And tell me about the ramifications immediately, because when you think of a big plant closing, I mean, you go back and you think of of IH or Farmall or Case where you have thousands, hundreds and thousands of workers that lose their job.

How does this compare t what we used to see in the 80s and early 90s?

Well, in in the sense that, here's a plant closing with, over 2000 people being displaced.

It's similar in some ways to what we saw throughout the Midwest, not only here in the Quad Cities, but in places like Peoria and Youngstown, Ohio, and all of the places that would later come to be known as the Rust Belt of manufacturing.

Many of those places now, of course, like the Quad Cities coming back substantially from from what we saw back in the 80s.

And that's because that these areas, including the Quad Cities, have diversified a lot.

So it is different.

This is one facility and one type of manufacturing, food manufacturing.

But we have other food manufacturers in the area.

We have other manufacturers in the area.

And, and so the Quad Cities is much more resilient today than it was 40 years ago, for sure.

When you see like, and correct me if I'm wrong because, you know, the the scale of economy here better than I do is that when you think of the manufacturing, like Deere or Case, you'r thinking of higher paying jobs and you think of at a meatpacking plant.

Now, is that an incorrect assumption?

No.

The jobs at the meatpackin facilities are among the lower paying jobs in the manufacturing world.

And so you're talking about people that may not have the ability t find another job right of way, because either their skill set isn't quite there or just the hiring ability, for the market to absorb those people.

Is that where we are right now?

Is that we have some 2700 people?

How do you employ tha level of skill in our community?

Well, there are other food manufacturers.

Like Fair Oaks Foods is coming online now.

And so yesterday we had the, the job fair, where over 100 companies came to the vibrant arena and in Moline and, and we had, hundreds, i not over a thousand people that so I'm told that came to the job fair.

And so that's for companies like Fair Oaks Foods, various other companies in the area that are looking to hire.

Skilled workers in their field.

Well, not only the skilled but but some of the, the workers that are, productio workers in food manufacturing, which is not a high skilled activity.

And, and they're hiring for those multiple workers.

When you get up the skill chain a little bit to the, to areas like maintenance and mechanics and the people who keep the plant running, those kinds of occupations, which would be a significant share of, of those jobs.

Those are jobs that are in high demand throughout the Quad Cities, multiple employers looking for those.

And they were at the job fair as well.

So many of those people are going to find alternate employment fairly easily.

I think for the food production workers, it is going to be certainly not all of them are going to be able to find an alternate employment here in the Quad Cities.

They may have to move to, to some other, place.

And we know that, recruiters from Minnesota and Missour have been in the area and, and, all of that is, is certainly what happens.

We've, you know, when you look back at some of the other plant closings in the Midwest, like the one in Nebraska, that certainly that i one of the things that happens.

People are going to move around a little bit.

And that's what I was going to ask you next, of course, is that when you have a hit to 2700, some workers, is there a worry that that you lose a lot of people?

You los a lot of taxpayers, so to speak?

That that just simply leave the area for jobs elsewhere?

Yeah, we know that some will, because there there really isn't that much.

There's not 2000... You can't absorb jobs.

...jobs of that type that are ready to be hired right now.

Maybe a few hundred, but certainly not 2000.

So that, we know there are going to be some people who are going to leave that that's, normal in this kind of a situation.

You did talk about diversification, which is so critical to a local economy, but it's still very much dependent on Deere & Company and the Rock Island Arsenal.

And those are two major, major.

And then you had the health care systems as well, major, major employers here.

How much diversification is there in the Quad Cities?

How does our area compare to, let's say, Cedar Rapids and Rockford, a Peoria?

Well, that's actually a very interesting question because all the ones that you name, of course, they are close competitors, geographically speaking, and and they are all of them involved in similar kinds of manufacturing activities.

All of those are manufacturing towns originally, with Caterpillar being, in Peoria and now in the Rockford area, you have, a lot of aerospace, manufacturing.

You had the, Belvidere plant, for, I believe, Chrysler, so.

And in Cedar Rapids, you have Rockwell Collins, the, the, aerospace... The food processing that goes there.

Right?

And and those communities are diversifying as well.

So Cedar Rapids, very much in the news lately with all the data centers, moving in, Rockford becoming more aerospace oriented and, and the Quad Cities is starting to do some of that as well.

And that's one of the things when we're out there trying to recruit new businesse to the Quad Cities, certainly, data centers are part of that discussion.

As well as aerospace and othe kinds of advanced manufacturing.

And I think that's one of the area where the Quad Cities has done particularly well over the last, say, 20 years or so, is is really upping our game in terms of advanced manufacturing.

There's a lot of manufacturing going on in the quad Cities that people don't see, people don't know about.

It kind of flies under the radar, producing things that you wouldn't think of and, and, but maybe you, you use every day without knowing that it came from the Quad Cities, all over the place, people, manufacturers supplying parts for, other manufacturers.

And, it's it is now a much more diverse economy in the Quad Cities.

Not every manufacturer i dependent on, one supply chain.

They're very diverse.

You also always want to, you always want t keep attention to, on the base, what's already here and and to have kept Kraft, in, in Davenport was a huge deal for the for the city of Davenport, of the Quad Cities.

And I just remember that one of the reasons why that wa given was the shovel readiness for lack of a better way of putting it, of the industrial parks or of the ability of the Quad Cities in order to attract these.

Is that still, an advantage of the Quad Cities, or do we need more shovel ready areas, to, to expand the economy?

Oh, we could always use more....[laughter] ...that's for sure.

Definitely, lack of, shovel ready sites for, for various types of, of, projects, particularly very large projects.

That would be a large manufacturing facility.

That's a fairly limited number of spaces that we would have.

Right, right here in the Quad Cities.

So, yes, shovel ready sites are an issue.

And and that is something that we are working on very hard, at the Chamber and Grow Quad Cities to, to help the, the cities, the municipalities within the region, to help, people who, who have the, the land to, to be able to prepare that land for, potential development.

You brought up, Cedar Rapids and data centers, with multi-billion dollar plans, on us, on the southwest side of Cedar Rapids.

You've seen i on the west side of the state.

The the data centers.

You've seen it in the Des Moines area.

Just prospering.

You haven't really seen it on a large scale in the Quad Cities yet?

Right.

I think the the drawback to, the Quad Cities for a large scale project is the, the lack of, shovel ready site, and that would meet the specifications that, that they require, especially for the very large ones, very smaller size, moderate sized ones.

We would have room for, but a very large facility.

I drove by one in Indiana not too long ago.

That's under construction.

It's huge.

We don't really have the space for something that large that is going in at a lot of places around the country, and those are the ones that, you know, when you see some of the backlash against data centers, certainly it's the very large ones that are, of course, generating the most backlash.

Smaller moderate sized ones, you know, we we could fit those into the available land.

Power and water requirements are not as, extreme with, with the moderate sized ones.

Is that something that, that the Quad Cities at least as far the chambers point of view, is that Quad Cities is missing out on or is it something that you sit there and you see people protesting, you see neighbors saying, oh, I'm worried about the noise pollution or the light pollution, or any other, pollution that comes along with these and that you're kind of sitting there going, yeah, let them have the problems, let them sort out what's going on so we can jump on the bandwagon a little later?

Like any kind of developmen there going to be pros and cons.

Certainly with with data centers, there are issues that people have raised and there are issues with various other kinds of manufacturing facilities as, as well.

And, and that's why we, you know, we have to work with, municipalities, make sure that that they are what they are wanting to do with, with the land that they have to develop.

As an economist once again, and we're talking about diversified, economy in the Quad Cities, how important are the high tech jobs and where is that going?

I guess if you knew that you would be, you know, hitching hitching your, car to the stars and, an being able to cash in on that, but where do you think it is going?

Is is it more of an information based economy that we're heading into, even more so?

Well, the Quad Cities is is not Silicon Valley and and Silicon Valley is and California is where a lot of the original development of some of the AI and, and the very high tech types of jobs that you would see at, at the hyperscaler companies.

We don't have that here.

And, and it's unrealistic to to think that we would suddenly be able to transform into something like that.

But where the Quad Cities does have an advantage is in the merging of those technologies into our manufacturing base.

And, and so when we talk about advanced manufacturing here in the Quad Cities, that includes AI and and AI is becoming part of the manufacturing process.

If you go back a year or two, there weren't many people talking about that.

But now all kinds of people are talking about that.

And, at Grow Quad Cities, we have been involved in in discussions with, with companies that are interested in bringing AI into their manufacturing process.

And, and with AI companies that are that, that have something to offer to our, to our area.

And, and it's not it's more than what people would normally think of with I think most people when the think AI, they think of ChatGPT you type in a prompt and things like that.

Yeah.

Well, when you're talking about manufacturing, it's not like that.

It might be something where you're working with a piece of equipment and you need a machine to turn it in a certain way and make a weld in a certain way and assemble a part.

All of those things that you want a machine to do autonomously that that, would require maybe several people to be able to, to do it manually.

But you have machines that can do the moving and the welding and things like that.

And if you had the abilit to speak to the machine in plain English and say, turn the piece this way and, and that, that is using some of those AI techniques and AI concepts in the manufacturing process, there's there's an AI machine that is running to process the commands of the user.

And, and here's why that's important.

The, the the manufacturin processes of today and tomorrow are not going to be heavy, manually intensive things where you have lots of people working with brute strength.

You have to take advantage of the fact that machines are going to be doing more of the automation because the supply of labor is decreasing.

We've seen that in in other areas of the country, here in the Quad Cities, the population is essentially flat.

We're not decreasing in population, but we aren't growing very fast either, growing very slowly.

And and so the labor market is changing.

Baby boom generation is retiring.

That's a whole generation o manufacturing workers who relied more on the the physical man... Hands on.

...hands on techniques.

And now you have a ne generation of people coming up.

And if you want to get them into manufacturing, you're going to have to bring in some of those more advanced techniques.

And, and that's where the Quad Cities can really excel.

I think the Quad Cities has the potential to be an area of the country that could be known for the integration of A and other advanced technologies into manufacturing processes to make them leaner and and to be able to do more with the same amount of workers or perhaps even fewer workers because of the way the labor market is changing.

And the Quad Cities isn't standing still when it comes to developing, land.

And I just want to point out, like in June, the Illinois Economic Development announced the launch of a regional research pilot program for planning, support and East Moline in Rock Island, also sharing in a state regional site readiness program, some $35 million for infrastructure.

So, I mean, these are things that are major investments that that the chamber and local manufacturers or other businesses are really banking on to move us forward.

Absolutely.

And those two that you mentioned, those are very important.

In fact, we just met yesterda with, the representatives for, for that R2, P-2 program.

That's really exciting for us because it's a partnership with the state to be able t have more data at our disposal.

And that's really what I do.

[laughs] Right.

That's my my main areas is, data, and having the state to help us, provide more data and, and help to help our cities and our businesses to make better data driven decisions.

That program is going to be very beneficial for us.

The other programs that that you mentioned, the the grants to and in this case, East Moline and Rock Island for a couple of sites, And that's mostly infrastructure.

Yes, and you talked about shovel ready sites... Exactly.

...and in both of those cases you know, here's an example of, of some really well placed plots of land that just need a little bit of help to make them more attractive to businesses that would want to come to the Quad Cities.

So the Tyson plant closing in, Joslin obviously a hit to the economy.

There's plenty of negatives to that, but you seem very optimistic because because once again, we get back to diversity or the fact that there is growth in the Quad Cities.

There's definitely growth.

There's there's opportunities for more.

The job fair at the Vibrant Arena yesterday was just a really great example of that because, here you had over 100 companies that were looking to employ not only the worker who were displaced from Tyson, but that was open to the entire community.

And and certainly, a lot of those companies were in manufacturing and and other areas that really are, are looking for, for workers right now.

When, when I look at the dat on the Quad Cities labor market, and I talk about this a lot, I have a blog on our website, we do a quarterly market report where we talk about these things.

And when I look at the local employment data, I can see that there's a lot of hiring going on, and there's, the labor market in some sectors is pretty tight.

So for example there's a category in the data.

It's mining, logging and construction.

Well, we don't do a lot of mining and logging in the Quad Cities a little, a little bit.

But but the biggest category there for the Quad Cities is construction.

It's at decades high level.

That particular series goes back to 1990, and we're at the highest ever since 1990, since that series began.

So that means that we are seeing the highest level of construction employment her in the Quad Cities in 36 years.

That's pretty that's that's something and, and manufacturing.

Now manufacturing has been down slightly from its most recent peak.

But the that's not necessarily because there's less demand, for the, manufacturing workers.

It's, there's less supply.

And I think you see that when, when you have a job fair like we did and, and manufacturers are looking to hire when you look at the job posting data.

I saw something yesterday, job posting overall for full time workers, the the duration of the post.

So that's an indication of how long it take to find the qualified workers, something like 23, 24 days, something like that, mid 20s days.

And in manufacturing it's more like 19, much faster than the overall economy.

What does that tell you?

Tells you that that th manufacturers are hiring faster, that they are really, looking intently and they're filling those jobs.

They're not just those are not just imaginary job postings.

Those are real job postings that, that these, manufacturers are hiring for.

And so when you look at the, the Quad Cities overall, I think you see a labor market that is that is really pretty strong.

We have fairly low unemployment, cyclical variation in employment, certainly.

But but really overall very low unemployment.

And of course the the plant closing in Joslin is going to spik that unemployment a little bit.

But over time, many of those, workers will find other employment here in the area.

Our thanks to Quad Cities Chamber Director of Business Intelligence William Polley.

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