Midwest rallies to train workers, lure business, stem jobs exodus. Service jobs haven't made up for manufacturing loss

It sounds a bit like a football team's pep rally. A band is playing and the audience, largely General Motors (GM) workers, is clapping enthusiastically. The opposing team of overseas carmakers is nowhere to be seen. Cheerleading GM officials are announcing plans for a $580 million expansion and modernization of the 37-year-old Chevrolet plant here in suburban Cleveland. It is hailed as another key step forward in the battle against overseas imports.

Taking the podium in shirtsleeves rolled up to beat the heat, Ohio Gov. Richard F. Celeste calls the GM investment a strong vote of confidence in Ohio. ``If you give us a fair chance to compete, we can do it,'' he yells to enthusiastic clapping.

But behind all the noise and cheers lies a sobering fact. The Parma stamping plant, which now employs 2,400 workers and once had several thousand more, expects to offer no new jobs with the expansion.

``I think you have to look at what would happen if this action weren't taken -- eventually employment would start to dry up,'' GM vice-president David D. Campbell explained later to a group of GM officials and reporters.

The incident of a few weeks ago says a lot about both the new shape of Midwestern manufacturing and the region's growing determination to fight back.

Company leaders know their industries must be lean to survive. They must produce more with fewer workers. New technology has to be substituted for labor wherever possible to keep from falling further behind.

``There isn't any choice -- it's the competitive model at work,'' says Stanley Duobinis, an economist with Chase Econometrics who insists some of the results are looking good. ``Productivity is really booming. Shipment figures are growing quite rapidly.''

But the reverse side of such forward motion is that the Midwest continues to wrestle with a serious employment problem.

The nation's heartland has lost well over 1 million manufacturing jobs since 1979. Illinois, which lost one-fifth of its factory jobs, leads the national list, according to the US Bureau of Labor Statistics.

Ohio ranks third, behind Pennsylvania. Michigan is in fourth place. Agriculturally-dependent Iowa and southern Minnesota have been hard hit by the farm financial crunch.

Meanwhile the region's transition to service jobs has been proceeding much more slowly than the national average. The gains have not made up for the losses. Business services, a large chunk of the service sector, lean on the region's manufacturing for much of their strength.

The latest employment outlook survey issued by Manpower Inc. says the traditional ``winter weakness'' is expected to affect Midwestern hiring during the fourth quarter. Only in finance, insurance, and real estate will area employers be hiring more people than the national average.

Unemployment, down to 7 percent nationally for August in the civilian sector, has generally been higher than the national average in the Midwest for the last decade.

But leaders in government and business in the Midwestern states are pushing harder these days -- and with notably more success than during the recent recession -- to equip workers for available jobs and nurture new and expanded investment.

Though the still-high dollar is not helping pave the way to a greater flow of US exports, most Midwestern states now have not one but several trade offices overseas. And a team of Great Lakes governors is expected to visit East Asia soon on a joint trade mission.

Midwestern states have become more competitive with the Sunbelt over the last year or two. Jobs in both regions are now growing at a similar pace.

The once strong outmigration from the Midwest has tapered off. And some businesses have moved North. Ohio, for instance, recently welcomed back an electric-generator manufacturing plant that had moved to Alabama, and Youngstown has become the new home of a North Carolina furniture manufacturing plant.

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