but a few are cutting back
The Minneapolis/St. Paul Business Journal – March 3, 2006by Andrew TellijohnContributing writer
The economic recovery isn’t complete, but for the second consecutive year, employment news
in Minnesota is more good than bad.
Thirty-two of the state’s 51 biggest employers had stable or increased job growth in Minnesota over the past year,
according to research conducted by the Minneapolis/St. Paul Business Journal. Eight of those companies even showed double-digit percentage gains, while only two, Cargill Inc. and Northwest Airlines Corp., reported double-digit declines. For those companies with a national or international presence, the news was similar — more ups than downs.
The generally positive outlook began in April 2004, when job growth began outpacing job losses, said Steve Hine, research director with the Minnesota Department of Employment and Economic Development (DEED).
“We continue to see solid, but not spectacular job growth,” he said. “We do on occasion see months in which we step backward, but the months of job growth have outnumbered the months in which we have seen declines the last couple years.”
Largest gainers
North Mankato-based Taylor Corp., a holding company that owns a diverse selection of businesses, jumped nine spots from last year’s 50 Largest Employers List to No. 22 this year. The company increased Minnesota jobs 36.7 percent, to 6,833, though companywide employee numbers dropped slightly from 2005.
The company did not return calls seeking an explanation for its employment boom.
Another greater-Minnesota company, Hormel Foods Corp., attributed a 21.8 percent local employment increase and a 13.5 percent companywide jump to acquisitions finalized during the past couple years.
“The acquisition of Lloyd’s Barbeque had a large impact on Minnesota employment figures,” said Julie Craven, spokeswoman for the Austin-based food company, in an e-mail. “We expect continued growth in the coming year; however, we won’t speculate that growth will continue at the same rate.”
The Shakopee Mdewakanton Sioux Community expects to continue hiring, as well. A new hotel tower and improvements at The Meadows at Mystic Lake golf course, acquired by the tribe in 2002, powered a 19.7 percent increase in jobs. The growth resulted in an eight-spot jump in rank from last year’s list for the operators of Mystic Lake Casino.
It takes a tremendous number of people to provide great customer service at both businesses, said Bill Rudnicki, tribal administrator. “There’s a lot of people making sure you enjoy your stay. If you show up at the front door, you are greeted as a guest.”
In addition to its hospitality offerings, the Mdewakanton Sioux have a convenience store, an emergency-services unit and some public-works projects in various stages of growth that will keep adding to the company’s payroll, Rudnicki added.
Hiring strong in food, health care
Three industries experienced significant job growth between 2005 and 2006: medical technology, health care and food.
In addition to Hormel, three grocery chains with stores in Minnesota showed substantial employee growth within the state.
Pewaukee, Wis.-based Roundy’s Inc., parent of Rainbow Foods, saw a 15.9 percent job growth rate, expanding to 4,183 employees at its Minnesota stores. Meanwhile, Coborn’s Inc., based in St. Cloud, jumped up 14.3 percent from 4,500 to 5,144 employees statewide.
Coborn’s has shown steady employee increases through slow and steady store openings the past few years, said spokeswoman Sue Mackert.
Jon Hauptman, vice president with Barrington, Ill.-based Willard Bishop Consulting, said several grocery chains in the Midwest are adding stores, but they are also adding employees at existing locations and improving customer service to compete with Stillwater-based Cub Foods, a Supervalu Inc. subsidiary.
West Des Moines, Iowa-based Hy-Vee Food Stores Inc. reported a slight bump in Minnesota employment figures, while Edina-based Lund Food Holdings Inc. stayed flat and Eden Prairie-based Supervalu Inc. experienced a 1.6 percent drop.
In med-tech and health care, UnitedHealth Group (18.2 percent), HealthPartners (5.2 percent), Medtronic Inc. (6.7 percent), Park Nicollet Health Services (6.1 percent), CentraCare Health System (4.8 percent), North Memorial Health Care (4.5 percent), Boston Scientific (2.9 percent), and Guidant Corp.’s Arden Hills-based Cardiac Rhythm Management division (9.1 percent) are among the top 50 employers increasing their Minnesota payrolls.
“That’s been a very strong area,” said DEED’s Hine. “That’s one area where we can expect to continue seeing job growth — and high-paying job growth.”
Shrinking payrolls
The news wasn’t all rosy, however. Eagan-based Northwest arguably had the toughest year among the Business Journal’s 50 Largest Employers.
The airline — plagued by high labor costs, a strike and a September bankruptcy filing — has continued downsizing since the Sept. 11, 2001, terrorist attacks. Northwest’s mechanics went on strike in August and the work performed by those employees now has largely been outsourced.
The Aircraft Mechanics Fraternal Association represents about 4,000 Northwest employees, roughly 3,000 of whom are mechanics. When all is said and done, all but about 880 of those jobs will be outsourced, according to a company filing with the Securities and Exchange Commission.
Those changes contributed to Northwest’s Minnesota employment numbers dropping 25 percent since last year to 12,000. The effects were less pronounced companywide, with only a 15.4 percent decrease.
Minnetonka-based Cargill, however, experienced a 12.5 percent decrease only after selling an entire business unit; North Star Steel had operations in St. Paul.
Those Minnesota employees were transferred to the new owner, said Bill Brady, Cargill spokesman. The loss to Cargill’s local operations didn’t hurt the state as the jobs stayed in St. Paul. The company isn’t hurting overall, either, as several acquisitions across the United States and world resulted in an overall net gain of 23,000 employees, a 22.8 percent increase from last year.
“Acquisitions overseas in the last couple years have increased our overall employment,” Brady said, adding that among those additions were meat companies that “tend to be labor intensive.”
Government cuts
After staying steady for five years, employment at nearly all levels of government declined slightly in Minnesota between 2005 and 2006. Payrolls were down 1.5 percent at the state level and 2.9 percent at the federal level; however, both entities retained their spots atop the Business Journal’s list.
Fiscal budget issues have finally caught up with government workers, said DEED’s Hine. “There are a number of local government entities that have been reducing payrolls.”
The hardest hit of Minnesota’s government entities was the Metropolitan Council, which lost more than 5 percent of its staff and was one of two employers to drop entirely from the list. Hennepin County, with a 2.3 percent drop, and Ramsey County, with a 0.3 percent drop, also lost workers over the past year.
Andrew Tellijohn is based in Minneapolis.
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