BUSINESS CASE: Making It Through in Muskegon

Muskegon, Michigan, is no Ft. Myers. Unlike the Florida city whose boom and bust we described in this section’s opening story, Muskegon didn’t have a housing boom in the mid-2000s. And it didn’t have that much of a housing bust, either.

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Since real estate wasn’t a big part of the local economy, the housing bubble burst couldn’t do much to drag that economy down. So you might think that Muskegon-area businesses were somewhat insulated from the resulting national downturn.

However, Muskegon businesses were nonetheless hit hard by the recession. For example, Eagle Alloy—a manufacturing company that sells its products to a wide variety of industries, but not especially to the housing or construction sectors—saw its sales drop by 50%. And it wasn’t only manufacturers selling to a national market that were hit.

As factories in the Muskegon–Norton Shores metropolitan area laid off workers, and the local unemployment rate increased from around 6% in 2001 to over 15% during 2010, local businesses that depended on these workers’ paychecks were hurt as well; employment in retail businesses fell about 8% over the course of the recession.

This story does, however, have a somewhat happy ending.

As the U.S. economy as a whole began to recover, so did Eagle Alloy and other Muskegon-area manufacturing companies. During the recession, Eagle cut its workforce from 430 to 200, but following the recession, the workforce was back to more than 400, and the company was planning to hire another 150 workers. Eagle Alloy’s president, Mark Fazakerley, was predicting a 25% increase in sales.

In the broader Muskegon–Norton Shores metropolitan area, by mid-2013, the local unemployment rate had fallen back down to under 9%. And as manufacturing for the national market revived, businesses with local sales also bounced back; the redevelopment of Muskegon’s downtown, which stalled during the recession, had resumed.