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Our town Muncie just went through a traumatic episode of well-intentioned economic development gone awry. The story holds lessons for other similarly situated Midwestern towns facing similar challenges.
At one time, Muncie’s Kilgore Avenue boasted the flagship factory of Warner Gear, which employed 5,000 in its heyday. The factory closed in 2009 and was recently demolished. In January, it was announced that Waelz Sustainable Products planned to build a facility on the old Warner Gear site. The Waelz facility would extract zinc oxide from steel-mill waste from mills around the Midwest, providing Muncie up to 120 full-time jobs at average annual pay of $45,000, plus benefits.
In July, the Muncie City Council unanimously approved generous tax abatements for the project, which many, including the mayor, apparently believed would generate zero emissions.
Meanwhile, a number of environmental activists in Muncie discovered and revealed that Waelz’s plant in Millport, Alabama, is the nation’s second-largest emitter of mercury/mercury compounds into the atmosphere. The company’s application for a building permit, filed in April with the Indiana Department of Environmental Management, listed numerous airborne pollutants, including lead, that would be emitted from the plant. Not surprisingly, folks in Muncie went ballistic. Nearly 1,000 showed up at the August City Council meeting to protest. More than 10,000 people signed an online petition against the facility.
Waelz backed out—even though it had spent $2 million on the Muncie project. What do we learn?
First, trust but verify. Proponents should have had slam-dunk answers to questions about potential pollution from the facility. The City Council members who had voted for the tax abatement were caught flat-footed. Someone had dropped the ball on due diligence.
Second, the future of older manufacturing towns is not in manufacturing. Economic development must be about more than attracting new smokestacks to old brownfields. At best, manufacturing will provide a small fraction of future employment opportunities—in Muncie, in Indiana or anywhere.
The Warner Gear plants of the 1950s are not coming back. According to the U.S. Bureau of Labor Statistics, in July 2019, 12.9 million people worked in manufacturing in the United States. That’s a sliver of the 151 million people employed today. Seventy years ago, in July 1949, the total number of people working was 43.5 million, and more than a quarter of them, 13.2 million, worked in manufacturing. These statistics speak volumes about future economic development in the Heartland.•
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Bohanon and Curott are professors of economics at Ball State University. Send comments to ibjedit@ibj.com.
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