An End of an Era

By: Maija Inveiss

With the closure of the Oscar Mayer plant in the North side of Madison, many changes are coming, impacting the greater community as a whole.  However, there remains some hope for the future plans at the site.

With the official closure date, July 31, quickly approaching, the company laid off approximately 1,000 employees and stopped production on June 29.  These changes have greatly impacted many businesses and individual employees around the area.

For utility companies that have consistently supplied services to the Oscar Mayer plant, this closure represents a loss in revenue and usage.

Amy Barrilleaux, the public information officer for Madison Water Utility, said for a long time Oscar Mayer had been its biggest commercial, industrial customer and the biggest water user in the City of Madison.

In full production, Barrilleaux said the plant used about 30 to 40 million gallons a month, but in March, they only used 13 million. Once the plant closes, Madison Water Utility will see an estimated $1 million drop in annual revenue, though they will see some savings in water treatment and pumping.

“To have them leave, it’s an adjustment for sure,” Barrilleaux said. “We’ve worked really hard to make sure Oscar Mayer got the water that they needed all these years.”

Barrilleaux said they hope an industry or business comes into the spot due to the already large watermaid fare and water supply established.

While Madison Water Utility encourages water conservation, Barrilleaux said it’s difficult when at once the company sees a significant drop in revenue.

“It’s not necessarily something we were expecting and neither was the entire city,” Barrilleaux said. “I think the whole city is going to have to adjust to Oscar Mayer just not being here anymore.”

Steve Schultz, the corporate communications manager for Madison, Gas and Electric, said the net revenue from Oscar Mayer in 2016 was $3.3 million. He said, however, this energy use reduction will not cause any issues for MGE due to the new and growing customers.

Schultz said the plant had been gradually reducing their energy for several years, but the company’s service territory continues to grow in number of customers, balancing it out.

Similar to MGE, David Taylor, the director of ecosystem service at Madison Metropolitan Sewerage District, said Oscar Mayer has been gradually shutting down their operations.

In 2015, MMSD earned $510,000 per year, but they anticipate no more than $70,000 this year and no revenue in 2018. Since being aware of the closing, Taylor said they were able to reflect the change in their budgets.

As a way to protect water quality, Taylor said they have a major initiative to reduce the amount of salt at the Nine Springs Wastewater Treatment Plant and with the closure the district will receive less chloride at that plant.

While many companies are losing revenue from the closure, many of those in the greater Madison area lost their jobs. Matthew Mikolajewski, the City of Madison’s economic development division director said Oscar Mayer was the largest private employer in the city for many decades.

“It represented a large corporate residence within our community that contributed greatly to our community both through the wages that it paid over many decades and also some of the philanthropic activities of the organization,” Mikolajewski said. “So it’s definitely a loss to the community.”

Dr. Laura Dresser, the associate director of the Center on Wisconsin Strategy, said after the economic recession in 2007, Wisconsin lost 6 percent of jobs and caused hundreds of shops to close. The recovery process has been slow.

When it comes to manufacturing jobs specifically, Dresser said manufacturing was one of the biggest job generators over the period of time. However, many manufacturers struggle to find the similar jobs they once had, along with a decline in wages.

For Dresser, she found many ways Oscar Mayer represents things happening in the manufacturing sphere. Oscar Mayer shifted to more international ownership, drifting farther away from a locally-held business. This can mean a further departure from concerns about job production or quality, a deeper focus on comparisons in return of capital from potential markets.

“Those are the all things where Oscar Mayer represents a kind of sort of things that happen in manufacturing all across the state,” Dresser said. “It’s a case study in those pieces of it.”

Dresser said when a plant that is one of the only employers in a city, the closure can completely undermine the city. Each plant closure is different and the context can be crucial.

Mikolajewski said despite the loss of employment, there are other companies continuing to grow, so he doubts there will be a negative impact on the overall economy. He said Madison benefits from a diverse, robust and growing economy.

“That being said, we are being mindful from an individual perspective and family perspective that obviously this is going to be a challenge for some of those individuals that will be losing their jobs,” Mikolajewski said.

Mikolajewski said the city is currently working with the prospective site buyer as to the future of the plant. As of right now, the buyer has indicated an interest in having an employment focus, which is good news for the city since it desires to maintain some employment.

Dresser is unsure whether the city will be able to find a replacement for the plant with a comparable wage and a comparable number of jobs. She said over time, the number of jobs already started declining from the plant’s heyday in the 1970’s.

“When we say replace those jobs, do we mean what we think it used to mean or what it ended up meaning to the city?” Dresser said. “By the time it was shut down, it was already a shell of its former self.”

Mikolajewski said through the closure they saw a the decline of a thousand jobs, but historically the had more jobs when everything was even more fully operational.

The site itself, Mikolajewski said is well served by public transportation, bike infrastructure, city street system, electric, water, railroads and other important sectors. The city is mainly looking to keep some employment on the site.

Everything is currently in the very early planning stages, so no official decisions have been made as to what is going to officially happen to the plant site. Mikolajewski said the city is just now starting the planning process, so it will take some time to redevelop.

“The closure represents the end of an era,” Mikolajewski said. “It’s not going to be an overnight transformation. This is going to be an ongoing effort on the part of the city, the prospective buyer, the surrounding neighborhood for certainly a few years.”

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Maija Inveiss

Maija is a recent graduate of the University of Wisconsin – Madison with degrees in journalism (emphases in reporting and strategic communications) and French. She is pursuing a career in magazine publishing as the current web editor for Madison Magazine. Eventually Maija hopes to work at a national publication writing long-form features. In her spare time, she bakes lots of treats using original recipes, works on her soon-to-be-created food blog with her younger sister and samples as many Madison restaurants as possible.