Even After St. Cloud Electrolux Closure, Minnesota’s Manufacturing Economy Isn’t All Bad News
On Nov. 1, Electrolux’s freezer manufacturing plant in St. Cloud began to close as it prepared to consolidate operations to a factory in South Carolina.
With the closure of the factory, in operation since 1946, more than 750 employees were laid off, according to the St. Cloud Times.
That sounds like a familiar story — when a Minnesota manufacturer closes, it’s big news, and there have been several plant closing announcements in the last year: Del Monte in Sleepy Eye, J&B in Pipestone and Red Wing Stoneware among them.
But the story of manufacturing in Minnesota isn’t only about closures. Though the number of jobs in manufacturing has declined since the early 2000s, employment in the industry has actually ticked up in recent years, especially in a few sectors.
Overall, the number of people working in manufacturing in Minnesota has declined significantly in the past two decades, from nearly 400,000 jobs in 2000 to just over 320,000 in 2018.
Much of the early 2000s decline was driven by job losses in what was then Minnesota’s biggest manufacturing sector: computer and electrical component manufacturing. With an increasing amount of computer and electronic manufacturing moving overseas, for example, the number of jobs in Minnesota’s semiconductor and other electrical component sector nearly halved between 2000 and 2008.
While declines are often driven by sector-specific factors, so is growth. Two of Minnesota’s largest manufacturing sectors have caught up to or surpassed their pre-recession employment levels. Food manufacturing — which makes up about 15 percent of all manufacturing jobs in Minnesota and is driven by firms like General Mills, Malt-O-Meal, Hormel and others — held relatively steady through the Great Recession has seen a 4 percent increase in jobs since 2013. It is now Minnesota’s largest manufacturing sector by employment. Fabricated metal product manufacturing, roughly 14 percent of manufacturing jobs in Minnesota, is made up of companies that tend to make parts for other manufacturers. That sector has seen a 5 percent increase in employment since 2013.
Bob Kill, the president and CEO of Enterprise Minnesota, a manufacturing consulting group, said one driver of the increase in jobs in sectors like fabricated metal products is supply chain trends.
The Midwest has developed a reputation for building high-quality parts, which appeal to manufacturers. At the same time, local companies have found it’s easier to order parts from local companies.
“The Toros, Polarises, 3Ms, they like to have as many of their supply chain companies as close as possible,” Kill said. “If you’re buying from the East Coast or West Coast or overseas, you might have to order in larger quantities (in order to keep costs down). If something is wrong with the part, it’s hard to deal with fixing it.”
Technology is entering into the processes in lots of these plants, but it doesn’t always replace workers, Kill said. In many cases, robots take over repetitive tasks, making human workers more efficient.
Minnesota’s bigger manufacturing sectors aren’t the only ones growing. Another interesting growth area is the beverage and tobacco product manufacturing sector. The sector is small, but jobs have grown by about 80 percent in the past decade, from less than 2,200 jobs to more than 4,000 — likely, in large part, due to the growth of breweries, said Oriane Casale, assistant director of the labor market information office at DEED.
Companies like Electrolux, part of the electrical equipment, appliance and component manufacturing sector, have seen less growth, going up and down between about 8,200 and 8,800 employees across the state in recent years.
The beverage and tobacco product manufacturing sector is small, but jobs have grown by about 80 percent in the past decade, likely, in large part, due to the growth of breweries. (MinnPost file photo by Bill Kelley).
Despite growth in employment in recent years, manufacturing isn’t expanding as fast as other industries: the share of all Minnesota jobs found in the manufacturing sector has decreased from about 15 percent in 2000 to 13 percent in 2008 to 11 percent today.
Over the summer, manufacturers indicated uncertainty as they looked toward the future, the result of tariffs and a slowing global economy. In Minnesota, some told the Star Tribune in September they had seen escalating supply chain costs and slowing demand.
But Kill said he’s not worried that Electrolux is part of a troubling trend. With labor shortages in much of the country, it’s not easy for manufacturers to move their operations these days.
“Companies in the past that might have looked to move and consolidate, unless they can accommodate and find workers where they’re moving to, they just aren’t moving,” he said.
According to DEED, manufacturing is one of Minnesota’s industries where workers are most in-demand, and Kill predicts it’s unlikely St. Cloud Electrolux employers will have trouble finding new jobs.
“My guess is if they want to work, they’re off to a new opportunity,” he said.