At Nick’s Kozy Nook diner in Harvard, it didn’t take Bob Kerton long to gauge the impact of layoffs Monday at Motorola Inc., the largest employer in the northwest McHenry County community.
“We’ll feel it big time,” said Kerton, 65, owner of the Chemung Country Store and Citgo station that provides a steady stream of coffee and gasoline to Motorola workers. “It won’t put us out of business, but it will be like taking the cream off the top.”
What had been billed in 1994 as a “second chance” for a community known best as the self-titled “Milk Capital of the World” was dealt a devastating blow Monday as the company announced the layoffs of 2,500 manufacturing employees–about half the plant’s workforce.
Relations between the massive Motorola plant and the diminutive city of Harvard have never measured up to the early hopes, and hype.
Certainly the city of more than 7,000 people has profited from its seven-year relationship with the cellular phone giant. Streets, sewers and wells have been built, with state aid, largely in anticipation of the stresses of adding a huge business.
But the full benefits of the plant, which opened behind schedule in 1996, never materialized, city officials said. While many new homes were built, there wasn’t the development many envisioned. And though thousands have worked at the plant, only 174 moved into Harvard.
Predictions of new business have come up short as well.
“The growth may not have come as fast as people would expect it to come, but it has come,” said Debby Ryman, assistant director of the Greater Harvard Area Chamber of Commerce. Asked to point to business growth in the past five years, she mentioned an Arby’s restaurant and a Blockbuster Video.
Rumors that a downturn in the cellular telephone business could hit the plant in Harvard had been growing in the past few days. Six weeks ago, the company cut 2,870 jobs in the United States and Ireland. But losing half the jobs in Harvard still came as a jolt.
“Motorola is a jewel for the county to have,” County Board Chairman Michael Tryon said. “I don’t know how many of their employees live in the county, but even those who don’t spend money here. I hate to hear that.”
Besides Motorola, officials say growth has been steady and prompted as much by the general upturn in the economy nationwide and a desire by people to move farther from congested areas.
“We’ve got a community here that knows how to survive and has a very good work ethic,” Mayor Ralph Henning said. “This hasn’t been a good day. But Harvard people are very strong.”
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Like many other small towns, Harvard has long prided itself on its ability to pull together.
Its slogan as the “Milk Capital of the World” and its annual Milk Days festival date to when the town honored area farmers for increased milk production during World War II. That was the city’s greatest claim until 1994 when it won Motorola in a battle with neighboring towns in Wisconsin and a late entry by the City of Chicago when Harvard faltered in getting the needed land.
Officials predicted huge growth.
“We look at [Motorola] as our second chance to get it right,” then Mayor William LeFew said in 1995 as he announced the city’s new land-use plan, dubbed “2015, Time to Bring the Cows Home.” “We know what it’s like to go through tough economic times and we don’t want to face that again.”
But David Nelson, the city’s administrator since 1988, said predictions of growth were overstated. In 1993, the population was an estimated 6,567. The 2000 Census is expected to tag the population at around 7,200.
To sweeten the pot for Motorola, the state offered $30 million in incentives for infrastructure improvements.
Nelson said many of the things that the money went toward–such as $1.2 million for a deep water well for the city–would have been done eventually.
With one possible exception, Motorola will not have to forfeit economic incentives from the state because of the layoffs. The company got a $5 million investment tax credit and $1 million in job training assistance. Motorola also received a 20-year tax exemption on some utility expenses, though the company may lose a portion of that benefit if the layoffs cause it to fall below specified employment levels, said Brian Reardon, spokesman for the Illinois Department of Commerce and Community Affairs.
One tax incentive the company was entitled to but never asked for was from Harvard itself. Though the city offered a sliding scale of property tax discounts that started at 75 percent the first year and dropped to 25 percent within three years, the company never applied to receive them, Nelson said.
For its part, the company has made an effort to be visible beyond its sprawling campus on U.S. Highway 14. In 1995, the company donated $100,000 to Elementary School District 50 for computers. The company also has donated about 40 acres to the district for building sites. And employees have spent $7,000 worth of “Moo-Lah Money”–awards the company gives to employees that can be used as cash at Harvard chamber member businesses.
Nelson said the full impact of the layoffs to the community are still to be analyzed. “Call me in four months,” he said.
Most Motorola employees who left the plant Monday evening, and others who rode a shuttle bus to the Metra train station downtown, declined to discuss the layoffs. But one employee, reached at home, said employees were told they had met the company’s cost-cutting goals, but their jobs still couldn’t be saved.
“There’s a lot of people that were crying,” the employee said. “They’re very upset about it because they felt betrayed.”