Iowa's turnaround town

@CNNMoney January 3, 2012: 7:45 AM ET

NEWTON, Iowa (CNNMoney) -- No one in Newton, Iowa, would say the town's economy has recovered.

But it's getting there. Slowly.

For more than a century, this sleepy hamlet enjoyed the benefits of being the chosen home of the Maytag Corp., a community anchor and venerable factory of high-paying jobs.

But when the Maytag plant closed in 2007, just as the financial crisis hit, the people of Newton were forced to reinvent the town.

After a mad scramble to attract new businesses -- including a few of the green manufacturing companies touted by the Obama administration -- the area's unemployment rate is starting to trend lower.

But like other cities and towns in the states hit hard by the recession, Newton's recovery is a tenuous one, tied in part to the extension of tax credits that have helped spur growth in the green manufacturing sector.

Calling Newton home: Almost one hundred years ago there were five different washing machine manufacturers in Newton. For that, this little town just east of Des Moines earned a peculiar superlative: washing machine capital of the world.

Iowa's campaign economy

Over time, only Maytag survived, and Newton became a one-company town.

At Maytag's peak, roughly 4,000 workers -- or one in four Newton residents -- were employed at corporate headquarters or the mammoth plant on the outskirts of town.

"Directly or indirectly, everything was dependent on Maytag," said Leland Smith, a long-time engineer at the plant who still passes out Maytag business cards that read: "Retired from Maytag January 31, 1996 after 40.4 years of service."

More than just providing well-paying jobs, Maytag helped the town survive when the agriculture-heavy state's economic development was hamstrung by low crop prices.

And it was a source of pride.

"It's a company town. It was 115 years of Maytag: Maytag family, Maytag dairy farm, Maytag parks," said Newton Mayor Chaz Allen. "It was a great partnership."

That is, until 2006, when Maytag was acquired by the Michigan-based Whirlpool Corporation.

Just one year later, Whirlpool shuttered the Maytag plant, a move that cost the 15,000-person town of Newton a total of 1,900 jobs.

As the last Maytag machine rolled off the assembly line, the final shift workers signed their names on the washer's front panel, and turned off the lights.

"It was the job. It was my dream job," said David Albee, a Maytag supervisor. "I was actually kind of in shock -- devastated. What am I going to do next?"

A prescription for recovery: Unemployment skyrocketed after the plant closing, quickly moving from the normal 5% to around 10%. Jasper County, where Newton is the county seat, had the highest unemployment rate of Iowa's 99 counties by 2010 at 8.2%.

For Mayor Allen, the solution was clear: Diversity.

"We figured out what we needed to do to move our town forward, to diversify our economy and to bring new things to town," said Allen.

Swing state economies complicate 2012 picture

Community leaders set about luring businesses to Newton with a raft of aggressive tax breaks and incentive deals. And the town received the first ever Regional Innovation Grant from the federal government.

For Maytag workers, there were a few available avenues to a new job: Some returned to school, others moved out of the state and a few started their own businesses.

David Albee, the supervisor, started his own business called Major Brands Appliance Service with his wife Jody, another former Maytag employee.

"There wasn't anybody hiring, so we didn't really have a choice but to do what we know, and open up a business of our own," Albee said.

Their business, which started as a one-man operation based out of their home, now occupies a storefront on Newton's main square, where few vacancies are to be found. They are training a new employee, and thinking about expanding into Des Moines. They are even whispering about franchising the business.

On the east side of town, in the old K-Mart building, a group of ex-Maytag employees have another success story to tell.

Faced with unemployment, a group of 40 Maytag engineers started their own business -- Springboard Engineering -- after receiving an incentive package from the state.

"We were all essentially unemployed, so starting on something new was not that big of a leap of faith," said Jordan Bruntz, the general manager. "We had all the talent we needed right here."

The engineers, with more than 50 patents to their credit, have added 20 jobs, and plan to add around 15 more. In May, the company announced it had been acquired by Underwriters Laboratories, and more expansion is planned.

Going green: During Maytag's final chapter in Newton, Mark Parriott was the man in charge. The plant manager had joined Maytag in 1981 and risen through the company's ranks.

Until his job evaporated.

"One day we had hundreds of people producing Maytag washers and dryers, and the next day we don't. I mean everybody is gone," Parriott said. "I was one of those people that was gone within a couple days of producing that last product."

For a time, Parriott left Newton, taking a job out of state in the construction industry. When he lost that job after the housing bubble burst, he returned to Newton, and took a new job, in a new industry: Wind.

Lured to Newton during the town's frantic 2007 search for new businesses, TPI Composites was building giant, industrial wind turbine blades in an enormous new facility on the north side of town.

"It's almost like hitting the lottery to get a manufacturing facility that hires 500 people," Allen said. "We felt very lucky to get that."

TPI brought Parriott on as general manager of the plant, where he now oversees 700 workers.

A new headwind: In 2009, President Obama came to Newton and toured Trinity Structural Towers, a manufacturer that moved into part of the old Maytag factory.

Like TPI, Trinity makes a wind energy product -- the towers that support industrial turbines.

"Look at what we see here today. This facility is alive again with new industry," Obama said. "Many of the same folks who had lost their jobs when Maytag shut its doors now are finding once again their ability to make great products."

And it's true. Newton is slowly on its way back.

But Parriott and Allen say Newton has a new problem. The Production Tax Credit, a tax incentive for wind energy producers, is scheduled to expire at the end of 2012. Industry groups say that when the credit has expired in the past, demand for turbines has cratered.

And that puts Newton's fledgling green manufacturing jobs squarely in the crosshairs.

"These companies have stepped up and hired up to a thousand people between the two companies. And we want to keep those people employed," Allen said. "The tax credit allows those companies to see into the future that there will be a market for their products."

Both Allen and Parriott said the tax credit needs to be extended soon so that new orders keep the supply chain humming. But Congress is not exactly in the habit of passing legislation in a timely manner.

"The time to act is now on this," Parriott said. "There will be tens of thousands of jobs lost, and in all likelihood, some of those jobs will be here in Newton, Iowa."

Smith, the 40.4 year Maytag veteran, said the town needs to hold onto those jobs -- even if washing machines aren't involved.

"I would have never have thought that we'd be making blades and wind turbines here in Newton," Smith said. "But you do what you gotta do." To top of page

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