STERLING – A top local economic development official doesn’t sugarcoat the effects of the closure of the steel mill a decade ago.
“It was a tragedy for the area,” said Betty Steinert, director of Whiteside County Economic Development.
On May 18, 2001, the company, Northwestern Steel and Wire Co., announced the shutdown. It took effect just 2 days later – 10 years ago today – when 1,400 people lost their jobs.
Founded in 1879, the company blamed the shutdown on a shortfall in critical raw materials to maintain the electric furnace operations.
But it wasn’t a complete surprise. Northwestern had started operating under Chapter 11 bankruptcy 6 months earlier.
Three years before, the company announced its intention to cease production of most of its wire products.
More than 400 people were laid off or re-assigned at that time.
Video: Heather Sotelo talks about the local economy
A long trend
The Midwest has been shedding manufacturing jobs for decades.
But the pace has picked up over the past decade.
The steel mill wasn’t the only local hit. Another was Lawrence Brothers, which made hinges. National Manufacturing is set to close soon.
“A lot of our companies are being purchased by larger nationally known companies,” Steinert said. “They keep them open for a few years, then they think they would do better keeping the jobs in one place.”
That’s what’s happening to National Manufacturing. It’s already occurred with two Morrison factories, Altronic and Climco Plant No. 1.
Still, the region has seen its economic development successes in recent years.
Five years ago, the Walmart Distribution Center opened near town, employing more than 900 people.
“The state knew that we had some good people here who needed jobs and that they were hard workers,” Steinert said. “Companies used to look for high unemployment areas.”
She said many of the jobs at the distribution center pay more than $15 an hour to start, but steel mill employees received higher wages. She knows because her late husband was a machinist there.
“Those who worked at Northwestern Steel and Wire made good, decent wages,” she said. “We weren’t rich, but we could pay our bills, buy cars, refrigerators and not go into drastic debt. The manufacturing base always paid good wages.”
The steel mill jobs had their hazards, so the workers deserved the higher pay, Steinert said.
These days, the United States imports much of its steel.
“I don’t understand why the United States would let nearly all steel be made overseas,” Steinert said. “For America, we need to have American-made steel.”
These days, the site of the steel mill includes Sterling Steel, Rock River Lumber & Grain, and a company that refurbishes railroad cars. Only Sterling Steel is listed among Whiteside County’s top employers, with about 260 employees.
Sterling today
So, 10 years later, has Whiteside County suffered a net loss of jobs because of the steel mill closure?
Steinert said it’s hard to keep track. And statistics provide no clear answer on whether Sterling is poorer.
The U.S. Census Bureau lists Sterling’s per capita income at $27,041 in 2009, an increase from $21,587 a decade earlier.
But state numbers show that the percent of low-income Sterling public school students has increased from 27 percent in 2000 to 50 percent in 2010. Similar jumps were seen in Rock Falls and Dixon, both of which had many people working at the steel mill.
Other cities in the region also showed increases. Perhaps that’s an indication the working-age population has taken a hit because of the loss of manufacturing jobs.
Positive signs
Doug Wiersema, president and CEO of the Rock Falls Chamber of Commerce, said the effects of the steel mill closure undoubtedly linger.
“Gradually, we rebounded,” he said.
Wiersema said Sterling has become a mini-retail destination. East Lincolnway has seen growth over the years, including the recent opening of Kohl’s department store.
“It’s not Rockford or the Quad Cities,” he said. “But you have Bergner’s and others. You can do one-stop shopping.”
CGH Medical Center also has seen tremendous growth, he said. The hospital now employs nearly 1,000 people.
“CGH is a tremendous asset for the community,” Wiersema said. “With all of its expansion in the last 10 or 15 years, it not only has provided skilled jobs, but also a lot of construction jobs.”
The national media have reported an upswing in manufacturing in the United States.
“These Chinese and Japanese companies are coming to the United States and looking to place manufacturing back here,” Steinert said. “They found they need to have it here for Americans to buy it here.
“They don’t keep warehouses full of products like they did in the 1970s and 1980s. If it takes 3 weeks to get it shipped over here, that’s causing problems,” she said. “I’m also hearing that the quality of product is not what it was when it was manufactured in the United States.”