State of Suburbs: A manufacturing renaissance?
The suburbs could be experiencing a renaissance for manufacturing, as new companies are coming in and existing ones are expanding.
An improved economy, more trade and educational programs for high school students, and jobs remaining here instead of being sent overseas have all helped to boost manufacturing around the suburbs, experts said.
But don't get your hopes up too high. The Bureau of Labor Statistics shows Illinois had 572,100 manufacturing jobs in May, compared to 580,000 in May 2014, a loss of 7,900 jobs. Manufacturers of transportation equipment have been doing well, compared to those making durable goods and fabricated metals.
Manufacturing jobs statewide are down and companies want a more stable state government, said Mark Denzler, vice president and chief operating officer for the Illinois Manufacturers' Association.
"We're hopeful that more companies will come here, since we are centrally located and offer great transportation and infrastructure, but a lot depends on what happens with our state government in Springfield," he said. "Companies want stability and predictability, and we don't have that right now."
Still, many suburban leaders report interest in manufacturers wanting to settle in their towns.
Elk Grove Village, which is home to one of the largest industrial parks in the nation, holds an annual trade show for local companies that allows them to network and link up with suppliers and services close to home, said Gary Skoog, president of the Golden Corridor Advanced Manufacturing Partnership, which includes Hoffman Estates, Schaumburg and Elk Grove Village.
"We are seeing suppliers and manufacturers making more connections here to keep all the business here," Skoog said.
The Golden Corridor is also helping the towns boost their workforces by making more local educational connections and encouraging high school programs and training in needed skills, Skoog said.
"We have more training over the last five years because we're working with the high schools," Skoog said. "There are more students now going into these jobs. The word is getting out there."
In Schaumburg, Takisawa, which makes specialized machine tools, IAI America Inc., which focuses on motion control systems, and Shigiya, which makes machine tool parts and grinders, are all building new facilities and bringing in new employees. Others like Hi-Grade Welding & Manufacturing, AA Truck Repair, Redlock Productions and TouchTunes Music Corp. are expanding their workforces, said Matt Frank, assistant director of community development for Schaumburg.
"This has all been encouraging," Frank said. "Many of these companies are re-shoring and bringing back manufacturing to the United States."
Elk Grove Village Industrial Park
Investing millions of dollars in infrastructure, being more aggressive with tax incentive packages and running a yearlong marketing campaign have all helped Elk Grove Village keep its industrial park modern and growing.
About $55 million has been invested over the last 10 years to improve roads, landscaping, signs and intersections around the 62 million square feet of industrial property. Another $38 million was earmarked last year for improvements to sewage systems, said Josh Grodzin, director of business development and marketing for Elk Grove Village.
The village also has invested in a $500,000 marketing and branding campaign with billboards and broadcast ads. Those combined efforts, along with a more aggressive approach to providing tax incentives, could be why the village has seen a reduction in vacancies. Business vacancies have dropped from 12.5 percent in 2010 to 5.9 percent this year, Grodzin said.
"Cook County taxes are very high, so these property tax exemptions for a new company coming in or an existing company who wants to expand to a new building have helped us to remain competitive," he said.
Companies such as Abbott Rubber Co. Inc. and Savage Bros. Co. both stayed in the village by moving into larger, vacant buildings and taking advantage of the tax incentives, he said.
In addition, Atlas Forklift is planning to build a showroom in the industrial park over the next year, he said.
"If a company wants to expand now, they know they can call me and we can help, before they look to move out," he said.
Sunstar is leaving Chicago and moving to the suburbs. The 82-year-old manufacturer of oral health care products outgrew its aging facility near the Edens Expressway in Chicago and could not find an appropriate site for growth in the city.
So it selected Schaumburg for its North American headquarters because of the town's access to transportation and a large pool of potential employees.
"Sunstar is thrilled to be making a major investment in the Chicago metropolitan area and is looking forward to expanding our world class manufacturing capabilities at our new facility in Schaumburg," said Rick McMahon, managing director and chief financial offer for Sunstar Americas Inc.
The company, which also has operations in Elgin, started in Japan as a manufacturer of bicycle parts and rubber glue. It now makes its international headquarters in Switzerland and has a diverse portfolio.
The Chicago facility has about 225,000 square feet and the new facility in Schaumburg has more than 300,000 square feet. The Schaumburg campus offers room for expansion.
Office employees are expected to move after Labor Day. Machinery and other employees will move from October through about January. Some employees from Elgin also will move to Schaumburg, but the Elgin facility will remain in operation.
IDI Gazeley owns the business park along Route 173 between Route 45 and the Tri-State Tollway in Antioch. The company has had longtime plans for a $25 million office, warehouse and manufacturing building. The company also has spec buildings under construction in Bolingbrook and Joliet.
"The Antioch property was purchased in 2007 ... right in time for the recession to begin," said Jeff Lanaghan, vice president of asset management. "In spite of our poor timing, we remain optimistic that the product we are planning is in demand for this area. The fantastic start to our initial building seems to prove out that optimism."
The park is designed to support more than 1.2 million square feet of distribution, manufacturing and research facilities.
The Antioch Corporate Center started construction on Building A in mid-2014. The 454,276-square-foot docked facility is scheduled for occupancy this summer, Lanaghan said.
"We are fortunate to have an international pharmaceutical company as our lead tenant taking 47 percent of the project," Lanaghan said.
Also around the suburbs
• Oelheld, a German company that produces machine oils, fluids and lubricants, will move to the Oakview corporate Park in West Dundee, possibly in 2016. It is outgrowing its facility in Elgin. The company bought the 28,000-square-foot building to be used for production, storage and office space, according to the village.
• Rosemont-based Principle Construction Corp. is building a 75,363-square-foot expansion for Dynamic Manufacturing Inc., which makes automotive, off-road, industrial and racing powertrain products in Hillside. The site expansion will accommodate a larger warehouse, new water main and sewer.
• The Technology Center of DuPage plans to reopen high school Manufacturing Technology and Welding programs this fall. TCD opened in 1974, when more than 20 percent of all U.S. employment was in manufacturing. But as the industries waned, so did the programs. Now, manufacturers say they can't find enough new people with the appropriate skills. So more programs have been added.
• In recent years, various companies have expanded. Acme industries expanded its workforce to make locomotive engine components, mining truck steering arms and other parts in Elk Grove Village. Bison Gear & Engineering Corp. in St. Charles has returned to assembling gear motors here instead of China. And Peerless Industries in Aurora, which makes audiovisual mounting solutions, returned its manufacturing to Illinois after concerns about rising labor costs and protecting its intellectual property.