While some in the state are still enjoying the resurgence of their beloved Chicago Cubs baseball team, many will not recall the summer of 2017 so fondly. Recently, a number of announced plant closings and consolidations have hit the Illinois manufacturing community very hard.
Medical device manufacturer Medtronic plans to lay off 185 people as it closes its Joliet distribution center west of Chicago. Medtronic is one of the world's largest medical device manufacturers, but is closing the facility after consolidating operations. The facility, which opened in 1998, receives and ships a variety of products, but primarily those involving minimally invasive therapies.
Amcor Rigid Plastics is also laying off 110 workers in Batavia at a plan that manufactures plastic bottles for the food industry. Amcor, which has four other plants in the Chicago area and 29 throughout the U.S., will also redistribute the work to other plants.
Standard Refrigeration announced the cutting of 102 union jobs with the closing of its Wood Dale plant. The company is discontinuing the line of tubular heat exchangers currently made there.
PPG Industries is also closing its south Chicago plant that manufactures coatings for industrial applications. Consolidation is again the culprit in the community’s loss of 55 jobs. Finally, Pace Industries, which manufactures wood kitchen cabinets and countertops, announced plans to lay off 120 people at locations in Chicago's Lawndale neighborhood.
Insights
Similar to other geographies, manufacturing in the Midwestern United States carries a unique set of challenges. On the positive side, the region’s workforce is highly regarded for its skill and work ethic. Additionally, a well-maintained infrastructure translates to quality roads and air hubs for shipping product and accessing raw materials.
The reality, however, is that better workers mean higher wages. And better roads come from higher taxes. Throw in the strong union influence, especially in and around Chicago, and it makes Illinois-based facilities an easy target for consolidation. Additionally, although the location and infrastructure of Chicago is increasingly attractive, individual and corporate tax rates in Cook County are among the highest in the country.
While the state has done a great deal in terms of tax incentives and purchasing programs to help lure more manufacturing to the state, the Land of Lincoln continues to offer an economic trade-off pitting quality resources against higher production costs.