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ELIZABETH BAIER: When Albert Lea's jobless rate reached 11.1% earlier this year, that was the highest it's been for this town in at least a decade. But unlike other hard-hit parts of the state, Albert Lea has no single signature business that got hammered.

JENNIFER RIDGEWAY: You think of Northern Minnesota, you think of mining, you think of timber, things that have been very directly impacted by the type of recession that we've had.

ELIZABETH BAIER: Jennifer Ridgeway is a state labor market analyst. She says, even though Albert Lea has no dominant employer, the area relies heavily on factory jobs, which did get hammered.

JENNIFER RIDGEWAY: Manufacturing is the industry that's been hardest hit in terms of job loss. But it's more likely to be 20 people at a lot of different firms rather than 100 people at one firm. Lou Rich is one of those firms. At one of the company's two factories in Albert Lea, machinist Bob Larson is filing a pulley chopper. It's a round, metal piece the size of a Frisbee that will eventually go into a John Deere combine.

Lou Rich supplies parts for a diverse range of products, everything from X-ray machines to lawn mowers. The business grew until 2008. But earlier this year, customers began slashing orders, and Larson says the change was obvious.

BOB LARSON: Everybody was scared they were going to lose their job. A lot of people were wondering, if they did get laid off, would they be back?

ELIZABETH BAIER: The company scaled back and eliminated one of its three shifts. 60 people were laid off, a fifth of the staff. Workers who remained, like Bob Larson, had their hours cut. The pattern repeated across a wide swath of factories in the area, helping to drive up Albert Lea's jobless rate.

In some ways, Albert Lea's current troubles stem from the town's success at building a more diverse manufacturing economy. For decades Albert Lea was a one company town, with its prosperity tied to the meatpacking industry. Dan Dorman drives his tan suburban around town on a recent morning. He's the city's economic development director. As the rain whips around, he says that to understand the city's current slump, it's important to understand its recent past. Dorman pulls the truck into an empty lot, roughly the size of 40 football fields, right in the center of town.

DAN DORMAN: We're sitting on the site of what was the Wilson Packing House. It was Wilson Sinclair and changed hands several times and finally, in 2001, burned down.

ELIZABETH BAIER: Farmland Foods, the plant's final owner, decided not to rebuild after the fire, and the city lost 500 relatively well-paying jobs. Dorman says that was part of the reason city leaders launched a program to attract other manufacturers.

DAN DORMAN: I understood that we were overly dependent on one industry. And without local ownership, or even if you had local ownership, just being that dependent on one industry is always difficult.

ELIZABETH BAIER: The city launched a program to offer business owners loans and tax benefits and built several industrial buildings so companies only had to move in. In eight years, the city has been able to attract an array of small to mid-sized manufacturers, including Rainbow Play Systems, a playground equipment maker, and Larson, a storm door manufacturer.

But the city's success left it more vulnerable to the meltdown in manufacturing. As the city was trying to attract new manufacturers, many local workers began to travel out of the city for jobs. Albert Lea sits at the intersection of two major highways, which makes it easy for residents to commute to factories in Owatonna or Lake Mills, Iowa. The fortunes of those areas can affect the jobless rate in Albert Lea.

Camille Lynn commuted for a year and a half. The 45-year-old traveled north to the small town of Manchester, where she worked for a company that printed tractor manuals. In February, Lynn was laid off, like a lot of Albert Lea's commuters.

CAMILLE LYNN: Once in a while, when you think about it, you're going, oh my god, now we're going into winter again, so our heating bills are going to go up. You know? We don't have the income.

ELIZABETH BAIER: Lynn's layoff has put her on edge. Her husband works a seasonal job pouring concrete, and he'll be laid off in a few weeks too. She's applied for 75 jobs since February. But work is scarce, and she's still waiting for an offer. So she's turned to the local Workforce Center for help.

Lynn's there on a recent morning, where she scrolls through an online job bank.

CAMILLE LYNN: Team assemblers. Overtime available. I wonder what that is. I'll check it out.

ELIZABETH BAIER: Lynn says, if she can't find work soon, she'll move away, even if it means being far away from her kids, who live in the area.

CAMILLE LYNN: I won't starve. I will not starve. And neither will my husband. So I mean, we'll do whatever we have to do to get through it.

ELIZABETH BAIER: Even as people like Camille Lynn struggle to find work again, there are signs of a budding recovery in Albert Lea's manufacturing sector. Here at Lou Rich, Company President Mike Larson walks around his massive plant. This is one of the companies that added jobs in the area with an expansion in 2006. Larson says the business started to hurt when many of his customers began buying less to shrink their own inventories.

MIKE LARSON: We've kind of seen that for probably close to six months. And now we think that a lot of our customers' inventory levels are at a low level. And so at least they're ordering based on their demand. And so at least it stabilized that way for us.

ELIZABETH BAIER: And that's given Larson the confidence to bring back some workers. Six have been rehired, and most full timers are back to clocking 40 hours a week. For machinist Bob Larson, that's been a huge relief.

BOB LARSON: Just gives you hope, and it gives you some extra income. And you can get your checking account bumped back up. And you feel like you're getting ahead instead of going backwards. That's the way I feel.

ELIZABETH BAIER: Despite last week's report suggesting the recession is over, Lou Rich President Mike Larson is still in a wait-and-see mode.

MIKE LARSON: Is that true market demand out there, or is it more demand from the stimulus package that is just temporary? That's what's concerning to a manufacturer like us.

ELIZABETH BAIER: The changes at Lou Rich are fairly typical according to Jennifer Ridgeway, the labor market analyst. She predicts a slow and steady recovery for the region. She says, for the most part, workers and manufacturers are optimistic things will improve.

JENNIFER RIDGEWAY: The recovery is starting to take hold, but it will take a tremendous amount of time before we see a real impact on jobs. There are a lot of unemployed people out right there. Employers will be somewhat slow to add back jobs.

ELIZABETH BAIER: Albert Lea's unemployment rate has come down a bit from its peak. But it's still more than 9%, well above normal for this time of year. Manufacturers are not likely to boost production without a strong signal from customers. And until then, workers in Albert Lea will continue to face stiff competition for the few jobs that are starting to open up. Elizabeth Baier, Minnesota Public Radio News, Albert Lea.