State Harvests New Diversity in Economy

The New Iowa starts here, where C Street intersects Highway 30 and redemption fans out as far as the eye can see: Plastics, biotechnology and distribution, financial services and telecommunications and, of course, cornfields.

Knocked to its knees in the 1980s farm crisis--when upward of 10,000 good blue-collar jobs bled off in short order--Iowa’s No. 2 city has clawed its way back with a vengeance. Today, says the U.S. Census Bureau, Cedar Rapids is the star of the Rust Belt turnaround.

The result: An economy blossoming out from agriculture, a changing population and the beginnings of a different political landscape--one peopled with a growing number of middle-class middle managers with moderate leanings and fewer ties to the state’s storied farms.

“Used to be, candidates come here and go to a hog farm,” says Andrew Meyer, vice president of American Profol, a manufacturer of plastic sheeting. “Now it’s more complex. There’s more high tech, more service business. There’s a lot more white collar. When politicians come here, it’s not so single-faceted.”

And as the Monday caucuses inch closer, the candidates are swarming on Iowa like locusts on a cornfield, filling hotels here in Cedar Rapids, navigating country roads in bus caravans, shaking hands in all the odd corners of this broad but sparsely populated state where Campaign 2000 officially begins.

Iowa Is Called ‘the Launching Pad’

“Iowa is the launching pad of the next president of the United States,” bragged senior Sen. Charles E. Grassley as he endorsed Texas Gov. George W. Bush for the Republican nomination this month. “Our caucus system invigorates the entire political system.”

And it’s pretty darn good for the Hawkeye State too. As of the first week in January, the men who would be president had already spent $1.3 million on television advertising, sprinkled hundreds of thousands of dollars into the coffers of local candidates and visited about 250 times, fine-tuning their ethanol speeches and focusing the nation’s attention on a farm state that aches to be more than just a farm state.

Or as Thomas R. Hobson likes to put it: “Iowa is more than just corn and hogs.” Hobson is manager of government relations at Rockwell Collins in Cedar Rapids and serves on a new task force aimed at getting that point across to anyone who will listen this political season. “There are high-tech companies here that are leaders in the U.S.”

Not that there’s anything wrong with farming. The values that agriculture imbues are one reason American Profol’s German parent company picked Iowa over 16 other states when opening a U.S. plant in 1991. In fact, the drumbeat of the local work ethic is heard in businesses throughout the region.

“Most people here grew up on a farm, and they know what physical labor is,” says Meyer, whose father, uncles and cousins are farmers. “You go to the coasts and find less of that there. It’s a sense of accountability: You will reap the fruits of your own labor.”

Douglas Olson--who grew up in West Los Angeles and founded a national office equipment leasing company here in 1993--insists that you could never move a company like his from Iowa, with its 2.8 million freshly scrubbed faces, to the City of Angels, for example.

No disrespect to the balmy Left Coast, but “the work ethic in the Midwest is unchallenged. It gives us the strategic edge,” says Olson, executive vice president of GreatAmerica Leasing Corp. “Fifteen percent of our employees were born and raised on farms. Many still live on farms. There’s low absenteeism, low turnover. They’re here bright and early.”

Hugh Winebrenner, a political scientist at Drake University in Des Moines, notes that since 1988 the number of farms statewide has dropped to 97,000 from 105,000. Although agriculture and agribusiness are far from dead, he says, Iowa’s economic growth has taken place in other industries.

“That brings a different kind of person,” he says. “That means that we’re certainly seeing a diminution of the influence of small-town rural areas. . . . [And] the strength of the social conservatives has been diffused somewhat.”

Immigration and low unemployment are beginning to change the face of the state. Although Iowa is still whiter and older than America as a whole, the number of Latinos has doubled in the last decade, though they’re still just 2% of the population. Waterloo and Des Moines have seen an influx of Bosnians. Although the state lost population in the 1980s as young people fled failing farms, that trend has largely been reversed.

Cedar Rapids is a good example. From 1980 to 1990, this manufacturing and agricultural city ringed with farmland dropped about a percentage point in population. Since then, as the city aggressively courted new businesses, the number of residents has grown nearly 8% to about 185,000. From 1990 to 1995, the number of nonfarm businesses grew 13.4%, and unemployment is practically nonexistent at 1.4%.

Happy Days for Cedar Rapids

The picture here is rosier than in any of the baker’s dozen cities the Census Bureau identifies as powering the turnaround of the manufacturing Midwest, a region where “our numbers show a definite pattern of economic and demographic recovery . . . starting with the recovery of their populations,” wrote Glenn King, an agency economist, in a recent Census Bureau report.

Cedar Rapids, says state economist Harvey Seigelman, has undergone a “complete catharsis in 20 years. From a blue-collar meat-packing town it’s become a white-collar town . . . a mix of high-tech engineering, insurance, robotics, technology transfer.”

Failed downtown department stores in this 150-year-old city have morphed into packed office buildings. Cornfields are being plowed under for new manufacturing plants and company headquarters. An ice hockey complex recently opened, and a new baseball stadium is under consideration for the Cedar Rapids Kernels, the California Angels’ farm team in more ways than one.

Painful Catharsis Brings Success

The air is tinged with the scent of oats here in Quaker Oats’ hometown. Plumes of white steam billow into the winter blue sky from manufacturers new and old. Pillsbury makes specialty flours here, the Cedar River Paper Co. now recycles 100% waste paper, and Archer-Daniel-Midland Co. makes corn sweetener and ethanol.

This catharsis, however, did not come easily. In 1983, Cedar Rapids’ unemployment rate was 10%. Three years later, the city lost two major employers, a mobile crane manufacturer with 6,000 workers and a meat-packing plant with another 2,000. Staring at empty plants and once-buzzing warehouses, the city decided that it needed to do something to break risky agriculture’s hold on the local economy.

So the local Chamber of Commerce created an organization called Priority One in 1986 to “fill the hole and diversify so we don’t have the same problem again, to change the face of the economy,” says Todd Bergen, president of Priority One.

The organization, which now has an office in Frankfurt, Germany, takes credit for creating 15,000 jobs, luring $1.6 billion in capital investment and recruiting about 100 companies from as far off as Korea, Japan and Denmark.

One recent chilly winter morning, Bergen gives a tour of the city’s high points: New subdivisions with gleaming clapboard houses where $100,000 or so will get you three bedrooms and two baths; tony executive neighborhoods of custom homes on wooded acres with price tags upward of $750,000. This is, of course, still Iowa, he says, so “you’d be hard-pressed to spend a million dollars on a home.”

Toyota USA moved its financial services and customer service divisions here from Torrance, growing from 17 workers to nearly 600 and building a 110,000-square-foot facility on the city’s outskirts. The company has enough land to construct an additional facility, which Bergen hopes will happen this year.

“One of the reasons Toyota does so well here,” Bergen says, “is that they can transfer people here from, say, Los Angeles, and they get a lot for their money. It is, though, a change in lifestyle.”

For some, that’s not a bad thing. As the Iowa Caucus Project 2000 boasts on a Web site that takes boosterism to dizzying new heights, the state has the 16th-lowest cost of living in the nation, along with one of the lowest crime rates.

Yes, it’s cold here, really cold. Yes, enough young people have left that the state and organizations such as Bergen’s have begun trying to bring them back to help solve the worker shortage. But Iowa prides itself on having the lowest cost of car insurance and the fifth-highest high school graduation rate--84%--nationwide. And if that’s not enough, the Web site boasts, “The Cedar Rapids Museum of Art has the world’s largest collection of Grant Wood paintings.”

The state also owns a singular place in American politics. Because the caucuses offer the first official primary season contest, the candidates start coming a year ahead of time, organizing volunteers, spending money, campaigning hard.

Residents of big states such as California, where the race for president is played out on television, get to listen in from a distance as candidates meet real people face to face, in snowy towns, beside stubbled cornfields, during the coldest, darkest weeks of winter.

“Personal campaigning is still there,” says Robert Loevy, professor of political science at Colorado College. “But New Hampshire and Iowa are so important there is also a blitz of advertising. It’s a powerful mix of retail politics and advertising.”

“Iowa’s rich,” said Doug McLeod, 42, as he waited for Texas Gov. Bush to begin his spiel at a recent breakfast campaign stop. “You don’t have to come to them. They come to you. I grew up in Michigan and New York. You don’t get this kind of attention there.”

McLeod is a good indicator of the transforming Iowa. On the one hand, he’s an evangelical pastor at Peace Christian Reformed Church in Cedar Rapids. He does not believe in abortion and is looking for integrity and leadership in the man for whom he will eventually vote.

He’s already heard conservative activist Gary Bauer speak. But he also wants to hear Sen. John McCain of Arizona. On the Democratic side, he plans to seek out former Sen. Bill Bradley of New Jersey, who is one of the more liberal contenders for the White House. And he thinks that any candidate who comes to his state and only talks about agriculture is making a big mistake.

“The people realize you can’t just talk ag,” he says. “If you do, they say you’re not talking to all of us. I think talking about the Internet here would be real relevant, especially in a city like Cedar Rapids.”

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Voting the Iowa Way

More than a century old, the Iowa caucuses did not assume their national importance until the 1970s with the presidential campaigns of Democrats George McGovern and Jimmy Carter. Although Iowa sends relatively small delegations to the Republican and Democratic national conventions, the caucuses are the first contests of the nominating season and their symbolic importance attracts the candidates and the media. Visit https://www.iowacaucus.org for more information about the Iowa caucuses. https://www.iowacaucus.org

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HOW THEY WORK

When: Monday, starting at 7 p.m. CST (5 p.m. PST).

Where: 2,142 precincts statewide.

Who shows up: Unlike primaries, where polls are open all day, caucuses are akin to town meetings and the timing, or rough weather, can discourage

attendance.

What happens: Usually some discussion or speeches. Caucuses can last for hours.

Voting: People have to stand up in front of friends and neighbors to state--and sometimes defend--their candidate of choice. The “viability rule” states that if a candidate fails to win at least 15% of the vote at a caucus, those voters must switch to a “viable” candidate.

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MIXED RECORD

Oddly enough, third-place finishers in the caucuses often do well later. Here’s how a sampling of candidates fared.

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Candidate Iowa Party’s Presidency 1976 Jimmy Carter (D) Won Won Won Gerald Ford (R)* Won Won Lost 1980 Carter Won Won Lost George Bush (R) Won Lost NA R. Reagan (R) 2nd place Won Won 1984 W. Mondale (D) Won Won Lost Reagan ran for reelection unopposed. 1988 M. Dukakis (D) 3rd place Won Lost R. Gephardt (D) Won Lost NA Bush 3rd place Won Won Bob Dole (R) Won Lost NA 1992 Bill Clinton (D) 3rd place Won Won Tom Harkin (D) Won Lost NA Bush ran unopposed for reelection. 1996 Dole Won Won Lost Clinton ran unopposed for reelection

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GOP conducted a straw poll, not a formal caucus.

Sources: Democratic and Republican parties, U.S. Census Bureau

Researched by STEVE PADILLA and MASSIE RITSCH /Los Angeles Times

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Times staff writer T. Christian Miller contributed to this story.