It Plays in Peoria

I spent some time last week in Peoria, a central Illinois city that deserves a good look from any Midwestern factory town trying to reinvent itself in the age of globalization. Not that Peoria has all the answers or has solved all its problems. But it's asking the right questions and coming up with a few answers.

While I was there, I had the chance to talk with some civic leaders and visit a very impressive community college -- time well spent considering the importance of community colleges to the Midwest's future.

Peoria has a reputation as the epitome of Middle America ("If it plays in Peoria..."), a one-time whiskey capital (Hiram Walker), and the headquarters of the giant Caterpillar heavy equipment manufacturer, which once employed 40,000 people in the Peoria area and absolutely dominated the town.

Like many Midwestern factory towns, Peoria has been through crisis -- in Peoria's case, two devastating strikes against Caterpillar in the late '80s and early '90s. The strikes were a byproduct of globalization, specificially overseas competition from companies like Komatsu. Caterpillar fought this competition with outsourcing and cutbacks. The United Auto Workers struck back. The union lost big, but the strikes split the town. Many people predicted the departure of Caterpillar and the slow death of Peoria.

Instead, Caterpillar stayed, if much reduced. And the town fought back.

Caterpillar is as global as any company now, but it is still by far Peoria's biggest employer -- 17,000 employees before the recession began (out of 94,000 worldwide). Cat laid off some 20,000 workers worldwide during the recession, about 2,000 of them in Peoria. But it is rehiring now: exact figures are hard to come by, but employment in Peoria appears to be edging back toward pre-recession levels.

But the strikes forced the city to recognize that it couldn't count on Cat to carry the economy all on its own. Instead, it began to reshape itself to compete in the global era.

It put together something called The Heartland Partnership -- some government but mostly business -- to guide this new economy. Cat played a role. But so did institutions that never concerned themselves much with the local economy -- Bradley University and a local Department of Agriculture lab and Illinois Central, the community college across the river in East Peoria. Peoria always had good hospitals, partly because of the generous health benefits at Cat, and they are part of the solution. So is the UAW, which recognizes that Peoria's health is crucial to its members' lives.  

The Heartland Partnership itself is interesting. Not only has it managed to bring the different players in town together around the same table, but it is operating regionally -- stretching beyond the Peoria city limits and Peoria County to work with ex-rivals in other counties. In a Midwest so often crippled by balkanization and petty rivalries, the regionalization can be a model.

The Partnership embraces the Economic Development Council of Central Illinois (a sort of regional chamber of commerce, including five counties), the Heartland Capital Network (a group of venture capitals and angel financers), the Heartland Foundation/CEO Roundtable (focusing on major projects), TransPORT (overseeing economic development linked to the Illinois River and including six counties) and PeoriaNEXT, which focuses on high-tech startups and helps run an incubator building generated by Bradley.

All this clearly helps Peoria and its region keep its eye on the ball. The city is stabilized. Cat remains its anchor. Health care is growing. Freight shipping along the river is steady. Many Bradley grads, I was told, stay in town after graduation, a nice change from the brain drain so evident elsewhere.

Downtown remains underused, and vacant factories and warehouses deface too much of the city. But some of these old buildings are being turned into lofts. There's an attractivement entertainment district with some decent restaurants. Next door, they're building a seven-acre museum campus that will bring several local museums under one roof and be an introduction to Caterpillar (Cat is building its own museum across the river.) This campus was supposed to have been done by now, but a combination of recession-related funding problems and a political squabble with the county delayed it: it's just now being built. The grand old Pere Marquette Hotel downtown is pretty shabby now, but Marriott is redoing it and plans to build a weather-proof passage to the civic center next door: reportedly, a cake decorators' organization (yes, this really exists) cancelled plans for a convention in Peoria because there was no way to keep their cakes dry in the rain.

And Peoria has plans. It wants to turn Interstate-74 into a "museum corridor," linking the new museum in Peoria with a planned "railroad hall of fame" in Galesburg and an existing John Deere museum in Moline. In fact, it sees itself as a fulcrum of two "corridors," one along I-74 running from Champaign-Urbana to the Quad Cities, and the other along the Illinois River, a major freight artery memorably described in John McPhee's book, Uncommon Carriers.  

Most other Midwestern cities that are bouncing back benefit from major philanthrophy (Grand Rapids, Kalamazoo) or from the fact that they had no heavy industry legacy to overcome (Des Moines, Columbus). Peoria's considerable local wealth hasn't produced this kind of philanthropy so far. And its industrial history resembles Flint or Dayton, both still reeling from the loss of its factories.

Instead, Peoria's renaissance is the result of some realistic thought and planning and real community involvement. If it works here, it can work in other cities, too.

So Peoria is doing fine? Let's not get too enthusiastic. So far, so good -- that's more like it. Its unemployment rate is still 10% --  no worse than the state and the country, but no better either. Schools and a high drop-out rate remain problems. There's much to do to refurbish some of the urban blight and persuade more people to move back downtown. Cat remains the linchpin of the economy, so another downturn in global construction could hurt Peoria badly.

But these (except for the schools) are short-term problems. When I was there, I urged local leaders to think long-term -- to take that budding regionalism and turn into something truly regional.

That five-county EDC area is basically Peoria and its collar counties, with no other big cities or economic engines. But Peoria anchors a major central Illinois region, a sort of pentagon linking the city with Bloomington, Champaign, Decatur and Springfield. This region embraces a lot of industrial, political and intellectual power, and a common economic history. I was told that the towns already are "sharing information," mostly at monthly or semi-monthly lunches, irregularly attended and deliberately low key. I think they can do much better than this. More than a million people live in this pentagon and, in a big globalizing world, size counts.

But why stop there? People in the Quad Cities are talking about creating an "oval" reaching from Waterloo and Cedar Rapids in Iowa, down through Iowa City, embracing Mississippi River towns and sweeping on to Peoria, Champaign and Decatur. Now we're talking. This "oval" would unite the heavy equipment industry in America (Deere and Cat). It could tap into the bioscience potential of the agribusiness companies in the two states. It would include two big state universities and a galaxy of smaller colleges and universities, like Bradley. It's an area that prospered together through much of its history, has been declining together through the Rust Belt and globalization eras, and will rise again only if it works together.

This kind of collaboration goes against the ornery Midwestern grain. But Peoria is showing that it can be done, at least on a small scale.

Now it needs to start thinking big.

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Going to Peoria gave me a rare feeling of optimism. Visiting Illinois Central College made me feel positively giddy.

ICC is relatively big for a community college, with about 12,000 students on a lovely campus in the hills above East Peoria. When I was last there, about three years ago, it had just started running programs for Caterpillar at two Chinese colleges, training potential Chinese employees for Cat distributorships there. This program has since expanded into a real exchange, with teams of ICC students spending three months in China studying Mandarin and interning at the Shenzen office of Robert Bosch, the big German tool corporation that bought a sprinkler company in Peoria.

I talked with eight ICC students just back from China, the fourth group to go. Several of them had held jobs at Cat plants in Peoria. In China, they visited Cat plants and saw how Chinese workers worked. In other words, they had a look at globalization on the hoof. You don't learn these things in classrooms.

All these students were local young people, probably the first in their families to go to college or to travel overseas. For them all, their three months in China was likely a life-changing experiences. They're still Peorians and Midwesterners. But they're also now global citizens, with a front-row view of the emerging world that their elders never had.

If these kids are the future of Peoria, that future looks brighter. 

For more information on economic development in the Midwest, visit the In the News section of the Global Midwest Web site.

Comments

[Eric Davis]

This is a fantastic concept. Within our region of NW Ohio, we are trying to do something similar, but we are running into issue of funding (of course). Where does one begin to look for resources?

Eric

[Richard Longworth]

Eric.......Peoria had its funding problems and probably still does. But the initial impetus came from a bunch of people sitting around a table, all driven by the realization that their town and region were in big trouble and they had to do something about it. Someone had to pop for sandwiches, no doubt, but this realization comes free. Then it was a matter of getting local players -- businesses, government, colleges, that USDA lab, etc. -- to chip in what they could. Caterpillar was a help but, so far as I know, didn't dominate this process. From this came the Heartland Partnership, which led to other institutions. Rent and salaries had to be paid, but by this time they had the local players deeply involved to the point that they were willing to help pay the bills. Government grants helped. Bradley was a big help on that incubator.

Does Northwest Ohio have players like this? Is the region in big trouble? Do the players recognize this trouble? Bet the answers and yes, yes and yes. I'd say your next step is to find a big conference table and buy some sandwiches.

[Eric Davis]

Mr Longworth:

We are a bit ahead of the curve then. We've gathered round the table, we've had sandwiches (and Mexican on occasion), but when it comes to action...well...the reply becomes "no time, no resources". I tend to view these negative items as opportunities, but not all see it the same way.

I will Google this program and make some out reach. We, like so many other micro-regions of the midwest, have lost our way and have given up on looking to the current leadership to provide guidance (especially during an election year).

Eric