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Published: Sunday, 3/12/2006

Job promises, reality clash

BY MARY-BETH McLAUGHLIN
BLADE BUSINESS WRITER
The six-employee Midwest Micro Devices makes silicon sensor chips in a building near downtown Toledo. The six-employee Midwest Micro Devices makes silicon sensor chips in a building near downtown Toledo.
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Metro Toledo's weak job growth over the past 10 years stems from a disturbing cycle of urgency when the local economy is bad and of contentment when it is good.

The result? The area has lost 10,000 manufacturing jobs in the last decade and 14,000 overall positions in the past five years. It ranked No. 196 out of 200 metro areas in the country in a recent study of job growth.

"Toledo has historically been known for fits and starts in the economic development area," said Rick Weddle, who in the mid-1990s led what has become the Regional Growth Partnership.

"It heads in one direction for awhile, and then another direction for awhile."

Mayor Carty Finkbeiner said, "None of us are pulling our weight right now."

The mayor from 1994 to 2002 who took office again in January added: "We aren't performing, we aren't measuring up to where we want to go."

Past and current political and business leaders contend that circumstances are different now and that new energy is being directed at job growth. However, they and their predecessors made similar remarks years ago.

The Regional Growth Partnership's new president and chief executive officer, Steven Weathers, said real change will take 10 to 20 years.

"You'll see progress, but sometimes it's a game of inches, pushing and moving in the right direction," he said.

In the past, big projects have diverted focus from broader employment-growth initiatives, and sometimes lack of attention allowed plans to wither, area experts said. Repeated talk about boosting the area's technology sector has produced limited results.

One example is the Northwest Ohio Regional Technology Alliance, a group of academic, business, and government entities that was absorbed by the Regional Growth Partnership in 2004.

"When I started my business, the city put out of business the only thing that was helping me, which was the high-tech incubator," said Chris Melkonian, president of Midwest MicroDevices.

The company is in the building that housed the Center of Technology Commercialization, an incubator shuttered in 2004 when state and local funds were cut.

A 233-acre technology park launched a decade ago by what is now Medical University of Ohio was supposed to grow into a campus of 2,500 to 6,000 professional and highly skilled employees in bio-medical and scientific research firms and manufacturing companies.

"Everybody was doing high tech, so that's what [we focused on]," said Lawrence Burns, president of the Medical University Foundation, which was involved with the park.

But 10 years later, the park has 100 workers in a few companies, and 60 acres has been sold for other uses. Problems in filling the park included companies not desiring the location because it isn't near a freeway and a feeling that the high-tech theme was perhaps too narrow, Mr. Burns said.

Metro Toledo, consisting of Lucas, Wood, Fulton, and Ottawa counties, has not fared well in job growth.

A recent study of the nation's metro areas by California think tank Milken Institute ranked Toledo fifth from the bottom in added jobs from 2004 to 2005 because of the loss of manufacturing work as well as its inability to attract high-technology jobs.

Overall, the area has picked up about 11,000 jobs in 10 years, but since 2000 it has lost 14,000 jobs, according to the U.S. Bureau of Labor Statistics. In the last five years, it has lost manufacturing, retail, restaurant and hotel, professional, and other industry sectors, and many of those are typically well paid and have good benefits.

Lucas County alone lost 4,328 total jobs, 6,253 factory jobs, and 1,140 professional and scientific posts from 1998 to 2003, according to the U.S. Census Bureau.

The dim picture is not unusual locally.

The Toledo area was reeling from the recession of 1991 when Mr. Weddle arrived in 1993 to head the biggest economic development agency in town.

"There was a sense of urgency, a clear realization that what had been occurring in the past wasn't working," said Mr. Weddle, now president of a foundation that oversees the high-profile Research Triangle Park in North Carolina.

The city's image took a hit when it was revealed in 1996 that local job growth for the previous two years had been grossly overstated by the state.

But by early 1997, greater Toledo employment was at a 25-year high and the city's job creation rate ranked third among Ohio's big cities.

That same year, the owner of the Toledo Jeep Assembly complex announced a $1.2 billion investment in new factories at the city's best-known private employer.

At that point, Mr. Weddle recalled last week, the sense of urgency weakened.

Amid the general downturn, one smaller local company has held its own.

Doug Brown, president of Fresh Products Inc. in Toledo, employs 60 and expects $10 million to $20 million in revenue this year. The firm makes air fresheners, toilet deodorizers, and hand soap.

Asked if high tech is the answer for the Toledo area, Mr. Brown said: "The surest path to mediocrity is to emulate what everybody else is doing."

Lack of focus by city officials during the years that Jack Ford was Toledo's mayor made his start-up experience even more difficult, said Mr. Melkonian, of Midwest MicroDevices. The two-year-old high-tech company has six employees who make tiny silicon sensor chips for a variety of applications.

A problem in the past, he said, has been that leaders have focused more attention on keeping large manufacturers in the glass and automotive industries rather than fostering entrepreneurial ventures.

"They're still going to tout the big companies but they need to do just as much for the small companies," he said.

Sandy Isenberg, a Lucas County commissioner for 17 years until she left office in 2003, said job growth is often put on the back burner as higher-profile projects, such as Fifth Third Field, take precedent, or mundane tasks like balancing the budget become imperative.

Plus, she admitted, a lot of politicians and civic leaders have large egos that sometimes get in the way of progress.

"In the long run, the egos can be the killer in a deal," she said. "You can shoot yourselves in the foot."

Clearly, something needs to be done, said native Toledoan David Mumford, who moved to the Atlanta area 16 years ago but keeps close tabs on his hometown.

"Every time I come home, the area looks worse," said the computer analyst for a hospital. "There's a lot of despair, a lot of hopelessness and frustration."

The 47-year-old added: "There appears to be no type of progressive thinking or vision. It just seems like they're going to stick with what they know and not think outside the box."

Despite the record, current civic leaders vow they will improve on attracting and keeping jobs.

Their optimism, they said, stems from the redesigned Regional Growth Partnership, which has a new director, $9 million in private money, and the role of lead marketing agency for the region.

Also, there's the proposed merger of the University of Toledo and the Medical University of Ohio, plus the Northwest Ohio Science and Technology Corridor proposed by UT president Dan Johnson to link those two schools with Bowling Green State University and Owens Community College.

"One of the most encouraging signs is that [the private sector] has stepped up with the money, they're on the new RGP board, and we have a new strategic plan," said James Hoffman, president of KeyBank in the Toledo region.

"Everybody's at the same table and that's really a big difference."

But seven years ago, former UT President Vic Kapoor suggested a local technology park that would attract high-tech businesses. No such park was built.

Limited progress in the MUO business park includes Shields Imaging, which has about a dozen employees to perform magnetic resonance imaging scans.

Mayor Finkbeiner said he plans to meet economic development officials in the area to set goals for jobs gained and retained. But no such meeting is scheduled, and the mayor is searching for a city economic development director.

During his previous tenure as mayor, Mr. Finkbeiner proposed a program in 1995 to spur economic development and jobs, but it is unclear what impact it had. He did not return two weeks of calls seeking comment.

Sticking with manufacturing as the key to job success could be the death knell, said labor economist Donald Grimes, a senior research specialist at the University of Michigan.

What that means, he said, is that Toledo officials can laud the recent news that General Motors Corp. plans to pour $500 million into its local transmission factory, but the focus should be on attracting knowledge-based companies.

A Rust Belt city like Toledo, he said, might be more realistic trying to replace factory jobs with professional ones in such fields as banking, architecture, law, and accountanting.

"High tech is sexy but it's not ever going to be a great producer of jobs," he said.

Mr. Weathers, of the growth partnership, said one of his initiatives is to create an Internet directory of what products local companies sell to help foster local purchasing and business.

More than two years ago, the agency used an $800,000 state grant to help create technology jobs and enhance the local industry. So far, 29 jobs have been created, with investment or increased sales of $7.5 million, the partnership said.

Still, local job-growth obstacles are significant.

The metro area is not gaining population, it has a factory-town image, it has a hefty union presence that is not attractive to some businesses, it is perceived as having high electricity rates for industry, and has not seemed to snare much in the way of venture capital or diverse jobs except for a spurt in warehousing and distribution employment.

KeyBank's Mr. Hoffman had said last summer that the growth partnership would "create 8,000 new jobs in five years and bring in $1 billion in capital investment."

So far, however, the area continues to lose jobs.

Although he thinks 8,000 new jobs is attainable, he said there is uncertainty how many local jobs will be lost as global outsourcing continues to grow.

"We may see modest growth but it won't be an increase necessarily of 8,000 jobs."

Contact Mary-Beth McLaughlin at: mmclaughlin@theblade.com or 419-724-6199.



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