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Galesburg Closings Less Painful Than Feared

GALESBURG, IL (AP) - Two years ago, even the rosiest optimists worried this western Illinois city's factory-fueled economy would be running on fumes because of plant shutdowns that have siphoned away nearly 2,000 high-paying jobs.

Today, officials say unemployment is less than a third of the 20 percent jobless rate some feared, thanks to more than 300 new positions added this year by a growing rail yard and other businesses, along with hundreds of hirings at nearby factories in Peoria and the Quad Cities.

Business leaders say spending has also held steady, spawning interest in Galesburg from two national retailers and giving holiday shoppers more downtown storefronts to browse than before the plants closed down.

At Innkeeper's, an upscale downtown coffee shop, sales are up 17 percent despite the plant closings and three rival brew houses that opened this year, said co-owner Johan Ewalt.

"It definitely could be so much worse than what it is. We're still holding our breath, but at least we're not 20 feet under holding our breath," said Eric Voyles, president and CEO of the Galesburg Regional Economic Development Association.

Officials are quick to point out that the better-than-hoped recovery masks some who are still struggling after the closings of a 1,600-employee Maytag refrigerator factors and a Butler Manufacturing plant where more than 300 workers churned out pre-engineered steel buildings.

Social service officials say demand increased at least 25 percent this year for food, housing and other assistance programs in this city of about 33,000. About 2,000 people had to be turned away when money ran out to help families pay utility bills.

"It's heartbreaking. These folks were faithful contributors to lots of social and human service organizations and now to not be able to meet their needs is frustrating," said Kristyne Bradford, executive director of the United Way of Knox County.

Officials say the next few months will give a clearer picture of whether Galesburg's economy stays on the road to recovery or hits another bump.

By fall, unemployment benefits that were extended for two years instead of the usual 26 weeks will run out for most former Maytag workers who enrolled in approved retraining programs after their jobs were moved to Mexico, officials say.

In addition, most of the more than 700 displaced workers who took advantage of state-paid job retraining will finish school next year and enter the job market for the first time since the plants closed.

Robin Eastburg, a 20-year Maytag worker, wrapped up her schooling in November but hasn't yet found work as a medical office assistant. For now, the 48-year-old who earned $15 an hour at Maytag is making $6.50 an hour in a seasonal retail job that will end early this year along with her extended unemployment benefits.

"I'm worried, but I have a few more weeks. ... My house is paid for, so I'd rather not move, but I guess I would if I have to," Eastburg said.

Most workers who have completed training have landed jobs in fields ranging from health care and computers to truck driving, said Mike Haptonstahl, manager of a state-run transition center that has spent about $4.5 million for schooling and other assistance programs since it opened in 2004.

Hundreds more were hired when Moline-based Deere & Co. and Caterpillar Inc. in Peoria targeted displaced Galesburg workers to fill jobs created by surging demand for heavy equipment," officials said.

"It offers a pretty neat talent pool, so we certainly want to reach out to anyone who has that kind of experience and is looking for an opportunity," said Caterpillar spokesman Rusty Dunn.

Officials say Galesburg is steadily creating its own jobs through small business development programs that have brought in several new shops and light manufacturers in the last year and helped existing businesses expand.

Officials predict the jewel of Galesburg's economic turnaround is a city-owned industrial park now ready for development by small manufacturers and distribution companies. The sprawling site along Interstate 74 could ultimately yield several new businesses and more than 1,500 jobs, said Voyles, head of the region's economic development group.

"We've got more interest in the property than we've ever had. Now, all we need is that first big break," Voyles said.

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