Editor's note: Mower County officials will open bids on the department of human services building on Aug. 5. In the second of a two-part series, the Austin Daily Herald examines the interest in the building and what economic impact the sale could make on the community.

More than 39,000 manufacturing jobs have been lost in the last two years in Minnesota.

The decline wiped out the 40,000 gain in manufacturing jobs enjoyed by Minnesota between 1990 and 2000.

According to Minnesota Economic TRENDS magazine, only three other states (Texas, Wisconsin and Indiana) added more manufacturing jobs than Minnesota in the 1990s.

Nationally, manufacturing jobs decreased by 3 percent, but there are states who have seen a decline since the 1950s and 1960s.

Only two manufacturing groups have been able to avoid the slide in manufacturing jobs in the new millennium: chemical and allied products and food and kindred products.

Hormel Foods fits in the latter category.

Possible expansion

Observers, like Development Corporation of Austin CEO George Brophy, say Albert Lea has the "right spot" for the Hormel Foods corporate office expansion.

It's located near Interstate 35 and the Freeborn-Mower Cooperative Services headquarters in a rolling hills setting. Nearby is the site of the new Wal-Mart Supercenter and Home Depot.

Freeborn Mower Cooperative Services could be a major player in bringing the Hormel Foods corporate jobs to the city, because of its commitment to assisting economic development packages.

Still recovering from the loss of its largest employer, Farmland Industries, the new jobs would have positive ripple effects in the Albert Lea school district, churches, main street businesses, banks where home mortgages will be financed and the construction industry, who will be building new homes to accommodate the new residents.

Not only that, but think about the image-building that will take place when Hormel Foods, a Fortune 500 company, comes to town.

That's the scenario Brophy predicts could happen if Austin lets the latest economic opportunity slip through its fingers.

That's why the Mower County Board of Commissioners' pending decision to sell or not to sell the county's human services building is so critical.

That's also why Brophy is worried.

Jobs

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Hormel Foods' interest in expanding its Corporate South offices in the old Kmart building along North Main Street were made known late last year; not this spring, Brophy said.

"I can show you proof,"

he said.

In a Dec. 10, e-mail from the owner of Oak Park Mall, an offer was made to lease 20,000 square feet of space in the shopping center for the county's department of human services, veterans service and pubic health programs.

An offer was made to lease the space in the former J.C. Penney Store for five years, Brophy said.

The information was shared with Mower County staff and officials and nothing was done about it, he said.

For six months, Hormel Foods has reportedly waited for an answer to its own expressions of interest to expand into the building adjoining its Corporate South offices, Brophy said.

Mower County's economic strength

"For the purpose of Minnesota manufacturing companies, the only companies that have added manufacturing employment in the past two-year period have been food and kindred products," Brophy said. "What the strengths of the Mower County economy is in food and kindred products rather than something else. What that means for us, the natural capacity for us is to develop and grow, working with Hormel to do it.

"If we for some reason reject the opportunity with Hormel, we have rejected: one, the only place where there is growth in the last few years and, two, there's no place else for us to go in terms of opportunity for us and anybody else in the state to grow. We have an opportunity. We can either encourage it, we can be neutral to it or we can reject it."

Brophy believes one of the reasons the county commissioners are skeptical of rushing to assist in the economic development proposal is the "trickle effect" of Hormel-style job creation opposed to the "waterfall effect" which means a few jobs added slowly rather than a large-scale all-at-once expansion.

"It's much more difficult for county commissioners or people on the street to recognize that this is an important component to industrial expansion," he said.

Brophy explained, no one should confuse the prospect of a Hormel Foods corporate expansion with the existing Hormel Foods-Cargill joint venture in Austin. That is an independently operated venture.

Secondly, Hormel Foods regularly examines purchasing successful smaller companies, who, when integrated with Hormel Foods, produce larger sales and earnings than before being purchased, he added.

Whenever that takes place, there is the possibility that personnel from the company purchased could join Hormel Foods corporate staff.

"When you get down to numbers, it's a trickle," said Brophy, referring to the addition of corporate jobs.

Also, it is not an expansion of the Hormel Foods flagship plant's work force, or of the Quality Pork Processors, Inc. employee rolls.

The new positions -- white collar jobs, to be sure -- would be created, they would still represent more jobs tomorrow than exist today, Brophy suggests.

Taking a shot, but only one

"We've got one shot at economic development," Brophy said. "It's in the category of food and kindred products. You've got a tremendous opportunity with an existing company that's a proven growth company and you either work with them or you've given up all reasonable opportunity to expand the duality of this economy."

Brophy wasn't through in making his point.

"If you give up, recognize that you have given up not just the next move on their part, but many moves to follow."

Brophy, a Chicago native, has been in Austin long enough to appreciate both Hormel Foods' rich history in the city and the hard-facts of the business world today.

Brophy described the smokestack chasing efforts of local governments and communities thusly: "fiercely competitive" and who better to know than the man that does that for a living.

Against that backdrop are the Hormel Foods' decision-makers, who apparently, have been waiting six months for Mower County officials to make a decision.

Some county commissioners have argued the interruption of county business could be too costly.

Meanwhile, Brophy's mind is made up.

"If you don't induce industry to grow here, other places will induce it to grow somewhere else," Brophy said.

Lee Bonorden can be contacted at 434-2232 or by e-mail at lee.bonorden@austindailyherald.com