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Winnebago, Area Economy Struggle Together

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March 9, 2009 by   Leave a Comment

As the economy sputters like a car engine running on fumes, no other place in Iowa feels the economic downturn like this community of 4,300.

The Des Moines Register reported that nearly one in 10 people is unemployed in Hancock and Winnebago counties, which Forest City straddles.

Many of those without jobs here once worked at Winnebago Industries Inc., the motorhome manufacturer that just five years ago had 4,220 workers and three buzzing production lines. These days, instead of getting overtime pay, factory employees who still have jobs work 32-hour weeks. One production line that’s eight football fields long is shut down. The company’s employment is down 60%, to 1,700 workers.

The border between Hancock and Winnebago counties has become the fault line where Iowa’s manufacturing economy has cracked.

The state’s most recent unemployment rate showed 4.6% of Iowans were unemployed in December, up from 4.3% the month before. New numbers are expected to be released this week, showing whether Iowa’s economy has worsened.

Nationwide, unemployment rose to 8.1% in February. The economy has shed more than 4 million jobs since the recession began in late 2007. Two states, Michigan and Rhode Island, topped 10% unemployment in December.

Iowa has the country’s sixth-lowest unemployment rate, according to the most recent data. And even though there are 13,200 more unemployed people than a year before in Iowa, the jobless rate is nowhere near a record high. That came in 1982 and 1983, when 8.5 percent of Iowans were unemployed during the farm crisis.

Still, in the counties that most lean on struggling Winnebago Industries, the employment picture seems bleak.

The Register reported that Hancock County, home of Winnebago, has Iowa’s highest unemployment rate at 9.1%. Neighboring Winnebago County is third at 8.5%.

“We don’t have 50 companies up here that are laying off half (of their) employees,” said Teresa Nicholson, executive director of Winn-Worth Betco, an economic development organization for Winnebago and Worth counties. “We have one.”

That one company, however, has shed some 2,500 jobs in five years.

Driving into Forest City, rural charm meets you at the door. The first noticeable building in town is the Forest City Cow Palace, a livestock wholesaler. Forest City is a place where neighbors call if your dog’s loose, the elementary school principal knows every student by name and $4 still buys a movie ticket at the one-screen Forest Theatre.

Residents brag that their small town comes with bigger-town amenities: Two locally owned grocery stores. Other big employers such as 3M and an engine filter manufacturer. A college, Waldorf, still attracts international students despite financial worries. A new aquatic center. And a full-service YMCA.

But it’s a sign of the times that the Forest City YMCA now offers scholarships for families of laid-off Winnebago employees. The food bank served 146 families last month, twice as many as a year ago. Twenty of those families had never visited before.

An outsider might expect ex-employees to be angry. But people here are loyal. They know what Winnebago has meant to this area.

When the travel trailer factory opened in 1958, Forest City’s future wasn’t bright. The farm economy was struggling. Young people were leaving.

In 1970, Winnebago expanded, and the company was listed on the New York Stock Exchange. The stock appreciated nearly 500 percent in 1971. Playboy magazine wrote about Forest City in an article titled “Oh, Little Town of Millionaires.”

According to the Register, Winnebago grew the next several decades. Annual sales surpassed $1 billion for the first time in 2004, the good days, when gas was cheap and credit was easy.

Times have changed.

“When the market is down like it is and people aren’t buying large discretionary products like RVs, it’s hard to have a work force standing around, waiting to fill orders,” said Kelli Harms, a Winnebago spokeswoman.

People in this town have faith the RV market will turn around.

“When this market comes back, it’ll come back crazy and it’ll come back fast,” Harms said. “People love traveling, love RVs, love the great outdoors.”

But people also love a surplus of jobs. For now, that’s something Winnebago can’t offer.

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