Executive Report

Comprehensive plan to retrain laid-off Harvester workers in Canton

WORKERS left jobless due to the recent worldwide restructuring program of the International Harvester Corporation will receive a helping hand from the federal government, Harvester and the United Auto Workers union (UAW). Included with those displaced Harvester workers across the nation are the employees of the Harvester tillage plant in Canton in Fulton County in west central Illinois. Under the federal Job Training Partnership Act (JTPA), a $165,000 grant was awarded to Harvester and the UAW by the U.S. Department of Labor to aid upwards of 600 workers who lost their jobs with the closing of the Canton plant. The funds come from a special $23 million Title III discretionary pool set up by U.S. Labor Secretary Raymond Donovan for similar projects around the country. In Illinois, applications are channeled to the state Department of Labor (DOL) through the governor's office and the Department of Commerce and Community Affairs (DCCA). The DOL will distribute the grant funds to the UAW and Harvester which jointly applied for the assistance. The administrator of education programs for the union, Arthur Shy, said that in 1982 Harvester and the UAW agreed that the corporation would help the union retrain and place workers like those in the position of the Canton plant employees. Shy said so far they have had an 80-90 percent participation in programs similar to the one going into effect in Canton. And he saw no reason why their current 50 percent success rate should not also be the case with these workers.

At one time, the factory in Canton employed as many as 2,500 workers, both union and non-union. In operation since 1842, the plant was bought by Harvester in the early 1900s. In 1980, employment at the plant was 1,600 workers, but by August of that year, the figure dropped to 300, following layoffs attributable to the continued fall in the farm market and the nationwide recession. Last fall, the plant closed permanently as part of Harvester's operational restructuring. At least four other plants have closed nationwide, including a truck facility in Fort Wayne, Ind., with a workforce of 2,000.

Unemployment in Fulton County jumped to 13.3 percent in 1983 from 7.9 percent in 1980. With a county population of 15,000, present unemployment is reported to be between 15-16 percent, though union representatives believe it's higher.

Chuck Savill, UAW "out-placement" representative in Canton, said that approximately 200 workers have transferred to other Harvester plants, including the Springfield, Ill., and Springfield, Ohio, facilities. There are still nearly 1,100 Canton workers who might need the services of the new programs although it is only funded for 600.

DCCA director Michael T. Woelffer said Harvester and the UAW will coordinate job training activities with several local service providers, including the West Central Illinois Building and Trades Council, the Tazewell County Employment and Training Agency, the Private Industry Council for Service Delivery Area 16 under the JTPA (see Illinois Issues, July 1983, p. 29) and the Illinois Department of Public Aid.

In addition to the federal grant, Harvester will contribute approximately $100,000 to the retraining programs. Larry H. Siebers, director of organization planning and development for Harvester, said the company's contribution will be used to maintain the staff and "out-placement" facility in Canton. This facility will handle the initial application process with the Canton workers and will be the main coordinating force for the various programs, which include: job development and placement; retraining and education; formal career counseling and assessment; and "emergency" relocation allowances of up to $500 for workers having difficulty financing a move to a new job. Siebers said the programs are an extension, and more importantly, a coordination of basic services that were available to workers by the different federal, state, union and community college programs. He highlighted two of the programs to be offered: a workshop which will instruct workers on the "how to" of finding and applying for a new job, and an extended tuition refund program which will be available to laid-off workers who seek education related to Harvester job classifications.

In addition, Siebers said Spoon River College in Canton and Western Illinois University in Macomb have agreed to participate in the program. Also, a Job Search Club — a continuation of the workshop — will be developed so participants can meet with associates in order to share information concerning job leads and maintain contact with the out-placement center which will make them "less likely to drop out of the program," according to Siebers.

Negotiations are in progress between Harvester and a prospective buyer for the Canton facility which could possibly bring about new jobs. In all likelihood, workers will have to move to Bloomington, Peoria or farther away to find employment. Siebers said the company hopes to find permanent work for at least 300 of the possible 600 or more workers who participate in the programs. They will be assisted by a computer system which will search for prospective positions available at comparable facilities.

Prior to the Canton closing, the plant had the highest seniority among its workers of all the Harvester plants. Workers in Canton had an average of 15-18 years of service. Harvester offers an early retirement — called a special early pension — to workers 55 or older with 10 or more years of service. The early pension plan was set up for use in cases such as plant closings or layoffs, but it was not certain how many Canton workers would take advantage of this option.

A representative from the UAW said the union had no "philosophical argument" about how Harvester is handling its part of this joint effort to retrain and place workers. The Springfield, Ohio, plant has taken at least 1,000 workers in recent years due to closing of Harvester facilities. But Canton, said Arthur Shy, has been particularly hard hit by the closing because Harvester was the only manufacturing employer in the vicinity.

When Gov. James R. Thompson announced March 13 that the federal grant had been awarded, he said, "For these dislocated workers, there is renewed hope today." Shy contributed, "This is a gratifying demonstration of what can be done when industry, labor and government at the state and federal levels get together."

And this will be a project worth watching for its value to the individuals and its effect on the area's community. — Steven L. Ray

Department of Employment Security created by executive order

UNLESS disputed by the General Assembly, a separate cabinet-level Department of Employment Security will be created by Executive Order No. 2, issued by Gov. James R. Thompson March 30. The new department will handle the duties of the Illinois Bureau of Employment Security (BES), which is currently part — and by far the largest part — of the Illinois Department of Labor (DOL). Besides administering the state's massive unemployment insurance

June 1984/Illinois Issues/41

program, the federally funded and regulated BES puts together Illinois' unemployment statistics and operates Job Service offices and Work Incentive Program offices throughout the state. Also joining the new department is the Board of Review, which handles unemployment insurance disagreements. The board, whose three members are appointed by the governor, is now DOL's major salaried board. Remaining within the Department of Labor are the Labor Law Enforcement Division, the Wage Claim Division, the Office of Collective Bargaining, the Private Employment Agencies Division and the Conciliation and Mediation Service. The reorganization takes effect July 1 unless a majority in either house of the General Assembly disapproves it.

The executive order comes a year after the state's unemployment insurance problem was "solved" when business, labor and government leaders reformed the unemployment insurance laws (see Illinois Issues, May 1983, pp. 26-27). Conforming legislation, S.B. 1926, has been introduced by Sen. Adeline Jay Geo-Karis (R-31, Zion), and the governor said he would nominate a director for the new department in the near future. The appointment would require Senate confirmation and the annual salary is set at $55,000. The current BES administrator, Sally Ward, is apparently in the running.

Thompson said he wants BES as a separate cabinet-level department because it is different in both function and funding from the other divisions of DOL. BES is also a major agency, Thompson said, comparable in responsibilities and number of employees to any of the largest state agencies. In calendar year 1983, the bureau's 4,650 employees administered the $2.2 billion benefit program, issuing checks for 9.7 million weeks of unemployment compensation.

The 1976 Bonniwell Report on the organization of state government, which has sometimes been a source of ideas for the Thompson administration, said the central problem in DOL was that the administrator of the Bureau of Employment Security reports to the DOL director rather than to the governor. This causes operational problems, the report said, because the bureau "constitutes over 80 percent of the Labor Department and tends to 'become the tail that wags the dog'. . . . Furthermore, tradition dictates that the Bureau Director's post is a technical or professional position, while the Labor Department Director's position is more of a political appointment." The governor could solve the problem, the report said, "simply by changing the reporting relationship of the Bureau of Unemployment Security to his office."

— Margaret S. Knoepfle and Steven L. Ray

Prepaid Health Plan for Medicaid recipients

THE Department of Public Aid (DPA) selected five Health Maintenance Organizations (HMOs) to provide full health care services to an additional 55,000 public aid recipients, doubling the number of people previously served by HMOs. As part of the Prepaid Health Plan, $39 million will be utilized in calendar year 1984 from the Illinois Medicaid Program budget. The participating HMOs, chosen from 28 bids received by the DPA, were selected in part on the number of recipients each facility could serve, as well as rates charged.

One of the bid winners, the Chicago Health Maintenance Organization, along with the Anchor HMO, also of Chicago, currently serves 48,000 Medicaid recipients. The new contract with the Chicago HMO increases their number of recipients served by approximately 22,000 and provides optometric services. Contracts were also signed with three other Chicago HMOs: the Illinois Masonic Center (with an estimated capacity of 10,000 new participants); Metro-Care of Mt. Siani Hospital (8,000); and Hospital Management of the University of Illinois Hospital (5,000). In addition, a contract was signed with American Health Care Providers of Homewood covering a possible 10,000 participants. The average rate charged per person per month by the five new HMOs is $60.

The Prepaid Health Plan, an outgrowth of the Medicaid Conference hosted by Gov. James R. Thompson in 1982, provides an alternative to the current Medicaid payment system in which the DPA reimburses medical providers after medical services are performed, bringing about delayed payments, lengthy forms and contested medical claims. The new system provides participating HMOs advance payments for the number of persons enrolled in the plan, thus eliminating some of the previous difficulties. Proponents believe a better relationship between medical providers and the DPA could bring about a higher number of doctors participating in Medicaid and better care for those receiving public aid. Also, he new health plan could ease the lack of family physicians and the overuse of emergency rooms at hospitals by public aid recipients because HMOs provide complete medical treatment to their members.

Recipients of Medicaid and Aid to Families with Dependent Children living in areas served by the HMOs will be notified as to the availability of the services. Enrollment in an HMO will be the choice of the recipient. Any current Medicaid recipient may continue to use his or her card in the traditional manner.

NIU professor invents electronic motor controller

A NEW electronic motor controller, to be used in recently developed brushless direct current motors, has been developed by Gary L. Blank, an associate professor in Northern Illinois University's industry and technology department, in cooperation with his graduate assistant, James Wrobel. In an April announcement issued by NIL), the inventor said the breakthrough could have far-reaching implications for electronic technology from home appliances to space exploration. The controller permits new flexibility, Blank said, allowing brushless motors to operate at varied and adjustable speeds.

Large corporations, such as Whirlpool, have expressed an interest in the controller. In talking with corporate engineers, Blank hopes to draw industry attention — and possibly research dollars — to NIU's industry and technology programs.

42/June 1984/Illinois Issues