Morton Marcus
Ashley, Indiana, is astride the border separating DeKalb and Steuben counties, north of Fort Wayne. In 2022, Ashley had 1,032 residents, just eight persons short of its 1900 peak.
Today, Ashley has joined so many other Indiana places where a major employer is closing down. Just before Labor Day, Tram Inc. announced 155 will be affected as the automotive electric-switch making facility will see production move closer to corporate headquarters in Plymouth, Michigan.
This is not a favorable move for workers who might hope for a transfer to the relocated factory, two hours and 140 miles away.
Plant closings are not big news outside the affected community. Openings, however, are triumphs of Indiana tax policies, the diligent work of the Indiana Economic Development Corporation (IEDC), and the agile strategic mastery of the Governor’s office.
What efforts are made by IEDC to retain smaller manufacturing plants in small towns? Where do we find a record of those efforts in the glossy annual report? Is a note of condolence sent to local government and Chamber of Commerce officials?
Let’s be clear. Indiana, over the past quarter century (1997 to 2022) has out-performed the nation in manufacturing output. As measured by Gross Domestic Product (GDP) in the private sector, our share of manufacturing has risen from 3.7% to 4.2%.
Yet that increase is not impressive when you realize manufacturing fell from 18.6% of the nation’s private economy to 12.4%, a 6.2% drop. In that time frame, when a high school graduate moves from youth to mid-40s and a retiring worker looks back to those years, manufacturing in Indiana went from 33% of the private sector to 28%, a 5% decline.
Where did Indiana show its best gains? Chemical production, which includes pharmaceuticals, increased its share of manufacturing by 5% nationally and 6.4% in Indiana.
However, what is America’s current economic deficiency? Where are we putting vast sums to expand output? It is in the areas of electrical equipment and components as well as computer and electronic product manufacturing.
Maybe I’m off base, but didn’t we identify the Ashley plant as making electrical switches?
In the past 25 years, electrical equipment and components lost 0.7% share of the nation’s manufacturing output, but dropped 2.6% in the Hoosier state. No other Indiana industry had a greater relative decline during that period of time.
Similarly, computer and electronic manufacturing lost more ground in Indiana than in the nation. What’s been going on?
What efforts were made to retain the factories that left Indiana for other states and other nations? We always accept the costs of sending emissaries abroad to prospect for new investments. Isn’t it time to open up the IEDC files and let us know about our losses as well as our gains?
Mr. Marcus is an economist. Reach him at [email protected]. Follow him and John Guy on Who Gets What? wherever podcasts are available or at mortonjohn.libsyn.com.
