Economy
12:00 pm
Mon November 14, 2011

Company Towns, After The Company Leaves Town

Transcript

JOHN DONVAN, host: This is TALK OF THE NATION. I'm John Donvan in Washington. Neal Conan is away. Huntsville, Alabama, to some, is better known as Rocket City, where NASA engineers build rockets and kids come every year for space camp. With nearly half of the city's jobs linked to space and defense spending, the city is deeply connected to the nation's space exploration programs.

But the residents of Huntsville may soon need to start exploring new careers, with budget cuts looming at NASA. And it's not just Huntsville. In 2007, Newton, Iowa faced its own struggle to reshape itself when its major employer for more than a century, Maytag, left town. The city lost a total of 4,000 jobs, which is 20 percent of its overall population.

This is a familiar story in cities across the country, like Muncie, Indiana, Flint, Michigan, Youngstown, Ohio, entire towns reeling when a manufacturing plant shuts down or a major industry moves overseas.

What happens when a city's major employer just disappears? Does town ever bounce back? We're going to speak to the mayors of Huntsville and Newton in a few minutes, but first, if this is the story of your city, we want to hear from you. When a major employer left your town, tell us what happened to you. What did you do?

Our phone number is 800-989-8255. Our email address is TALK@NPR.org and you can join the conversation at our website. Go to NPR.org and click on TALK OF THE NATION.

So joining us now from Newton, Iowa by phone, is Mayor Chaz Allen; and from Huntsville, Alabama, Mayor Tommy Battle. So Mayor Allen in Newton, we want to start with you. You had Maytag there for a century. People's grandparents, maybe great grandparents, were working for the company. And then they were gone. So what happened when they finally shut down?

MAYOR CHAZ ALLEN: Well, when they finally shut down, we had a choice to make. We had tried to retain Maytag or Whirlpool at the time, to keep the jobs here. And, obviously, that fell apart and we ended up taking what we called a retention council and making it a transformation council. Because we knew, going forward, we had to transform ourselves into what would be a new economy for Newton without the stable manufacturing of Maytag.

It was a shock at first, but I think we've done a lot to recover. It was a lot easier in 2007 as we were the focus of a lot in the nation, just because we were the first ones it had happened to. Not the first, but the focal point was Maytag.

DONVAN: You you had people who3 were interested in maybe coming in and helping in some fashion or other?

ALLEN: Oh, you bet. You bet.

DONVAN: A couple of things. Did Maytag give you warning that this was coming?

ALLEN: Not really Maytag, but when they were sold to Whirlpool, we were really pressing to try to get Whirlpool to keep the jobs here. And then I believe it was in May of 2006 - or maybe it was June - that's when we got the call that they would shut the whole thing down and move it to Ohio and Mexico.

DONVAN: So some of it went overseas, then?

ALLEN: You bet.

DONVAN: What about, though - I'm wondering if there was a sense of betrayal, given that there was this 100 year, plus, history and I'm assuming that people have photos of Maytag appliances in the background and themselves on the line in their photo albums and it goes way back. And there was, perhaps, a sense of family. Am I exaggerating that or...

ALLEN: No. I think a lot of people - it was. I mean, they'd spent their - people graduated from high school and wanted to go work at Maytag, work there 30 retires, retire and then move onto something else because of the benefits and the wages they had. It was a good living.

DONVAN: And on an individual basis - I understand you were saying that the town, to some degree, was trying to plan for this, but on an individual basis, how many people were just left out in the cold in terms of being ready for a world without Maytag?

ALLEN: Well, it's one of those things where it's a double-edged sword. Not having Maytag, all of a sudden, our unemployment went up and we have empty buildings. Well, to attract new businesses, you need a higher unemployment and spaces for them to move to. But with Maytag and the community, we didn't have those opportunities back then because you had to compete against Maytag for the employees and the wages.

DONVAN: I want to bring in Tommy Battle. You're the mayor of Huntsville, Alabama and, as we said at the beginning of the program, a city famous for helping to put us into space. You were manufacturing the Saturn rocket there. You have not only a base, Mayor Battle, of industrial line workers. You also have a large community of scientists and engineers, highly educated people, who are facing, if NASA continues scaling back, the same sort of struggles. So do you have a plan?

MAYOR TOMMY BATTLE: Well, we were very fortunate. We started back in 2005 period, where we were working on the BRAC Movement, which was the Base Realignment and Closure Movement where the Department of Defense was consolidating some bases. And we had about a 10,000 job gain out of that, so any losses that we had with NASA, we were able to offset with gains that we had and still come out with positive growth out of our area.

DONVAN: So you're saying it's no problem?

BATTLE: You know, you hate to lose anything and, you know, especially when it's somebody's job. Anybody's job is an important job, but the community has been able to weather this as we've gone through these, you know, economic times. We've still got a base of probably 4,500 to 5,000 NASA workers still here who will be working on the FLS, which is the heavy lift rocket engine to take us back into deep space.

So we've still got a good future in front of us with NASA.

DONVAN: Do you see yourself still as Rocket City?

BATTLE: We are Rocket City, Missile City, Army Aviation City, you know, Material Command, Biotech. We've diversified our whole economic base to such a degree that it really makes your whole community grow in different facets and different areas.

DONVAN: Again, Mayor Chaz Allen in Newton, Iowa, when Maytag left under the auspices that Whirlpool had taken it over, how did the town change in the immediate aftermath? Did people stay?

ALLEN: Yeah. It's ironic. Our census came out this year and our census in 2000 was about 15,800 people. We prepared for the worst and, actually, we only lost 400 people in our community after losing 4,000 jobs. People in Newton commute to different places now. There's a lot more people commuting to Des Moines and Pella and Knoxville and Marshalltown and Ankeny, to work at the places like Vermeer, Pella Windows, 3M, John Deere. So we're kind of right in the center of a manufacturing hub, so the people were able to stay in Newton, but commute to work.

DONVAN: But are you in a hub of other one company towns? In other words, are you vulnerable to five or six companies deciding that it's time to shut down and go somewhere else?

ALLEN: I think we're always vulnerable to that. I think that's something that, as the economy starts to pick up, we'll be less vulnerable. But right now, I think everybody's got a weakness in the fact that the economy is slower right now and we're all subject to that.

DONVAN: Mayor Allen, you mentioned that, when this began to happen to you around 2007, you got a lot of attention because you were, in a sense, leading this unfortunate curve. And so you had the government's attention and you had companies possibly talking to you. But you also had a pretty good economy at the time in 2007.

ALLEN: Exactly.

DONVAN: So what happened in 2008, 2009?

ALLEN: In 2007 and 2008, we were able to attract TPI Composites, which makes the wind blades for wind turbines. We were able to attract Trinity Structural Towers, who makes the actual tower for the wind turbines. And one of the things that we were very successful with was we took some of the Maytag engineers that are the core of Maytag and they created their own company and stayed in town and did engineering for more than just white goods. They started doing engineering for a lot of different things.

And we did see a change in 2008, I believe, about August of 2008, as Bear Stearns and all of that started going. Money started drying up for these ventures that we were so lucky to get in 2007.

DONVAN: All right. We're talking about what happens when a company leaves a one company town, when a major employer goes, and we're asking you to tell us your experiences. What did you do? How did you handle it?

Our number is 800-989-8255 and we want to bring in Dawn from Dutchess, New York to join us in the conversation. Dawn.

DAWN: (Unintelligible) but in the mid - but I grew up in Dutchess County, which is the home of IBM. And in the mid-'90s when IBM, you know, had an enormous downsize, I mean, the effect on every aspect of life in Dutchess County was altered. Our real estate market changed. People had to up and leave their homes and go to different markets, you know, and my own family, my aunt and uncle had to move. They, you know, were fortunate enough to move to Vermont, where they could stay with IBM, but that wasn't the case for a lot of people.

And it was devastating because Dutchess County, you know, has been the home of IBM for decades.

DONVAN: And would you say that the community unraveled? I mean, I'm meaning that literally when you say that people moved away.

DAWN: Enormously. People were moving away. People were walking - we had our own microcosm in Dutchess County of what is happening across the nation and, really, across the world right now. I mean, you know, the real estate market shrank incredibly. People were under water in their homes. They were walking away from their homes. They were, you know, short selling if they could, declaring bankruptcy.

I mean, and you know, fortunately, IBM didn't just dry up and go away. They really had to take an enormous step back and look at their own corporation and how they were going to continue to do business and do it better.

DONVAN: Well, Dawn, what did you do?

DAWN: Well, I went away to school and, you know, I really considered what it was that I was going to do with my future and how I was going to proceed from there. You know, was I going to enter that sort of industry or enter an industry that, you know, had more potential and more growth?

DONVAN: But you stayed in Dutchess County?

DAWN: I did until 2000 and then I left and I moved across the country.

DONVAN: Thanks very much for your call, Dawn. I want to ask Mayor Tommy Battle in Huntsville - you know, we didn't talk about the tax base. These companies contribute enormously to any town's tax base. They let you run your fire and police department and build your roads and keep your schools going.

In Huntsville, NASA's cutback has affected you how in that way?

BATTLE: You know, the offset of the jobs has helped us. You know, 1,500 jobs. You know, you can really count on that to be - oh, about $12 million a year as an economic impact on your area, so you know, you had a negative $12 million, but then, with the, you know, 10,000 jobs that we got from the BRAC Movement, that comes out to about an $800 million, you know, positive impact.

So you swing both ways. We had the same situation in the '70s when the Saturn program ended and IBM, who was heavy in this area, moved. And, you know, we had some of the same situations that Dawn was talking about where houses were for sale. There was high unemployment.

But one of the golden linings out of all that was that four engineers - you leave an engineer alone too long, they're going to start a company. They started Fortune 500 companies here.

DONVAN: Wow.

BATTLE: And grown from...

DONVAN: So getting laid off was the best thing that happened to these guys?

BATTLE: Well, they grew from their basement to Research Park to a Fortune 500 company and provided a good, stable economy for us.

DONVAN: Well, Tommy Battle, I want to thank you for joining us. You're the mayor of Huntsville, Alabama. And Chaz Allen, the mayor of Newton, Iowa. Two towns trying to figure it out and making progess.

This is TALK OF THE NATION from NPR News.

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DONVAN: This is TALK OF THE NATION from NPR News. I'm John Donvan. We're talking about cities and towns where one company provides the jobs or most of them and much of the revenue. And then, for whatever reason, the company gets up and leaves town or just cuts back significantly.

If this is the story of your city or town, we want to hear from you. When a major employer left your town, tell us what happened to you. Our phone number is 800-989-8255. Our email address is TALK@NPR.org and you can join the conversation at our website. Go to NPR.org and click on TALK OF THE NATION.

So we've asked you to tell us your stories and we want to continue with that. And we're going to talk with Alex in Dayton, Ohio. And, Alex, I understand that your family actually has put Dayton behind them. Is that right?

ALEX: Actually, it's not Dayton. It's Wilmington, Ohio. Over in Wilmington, almost half the city was employed by DHL or it used to be Airborne and ended up switching to DHL. I'm not sure because I was young back then. It was quite a few years ago. My family actually ended up having to move to Tampa, Florida because my dad's dad, my grandpa, had a position opening in a business over here.

But the rest of my family is still living in Wilmington and, not only did I have to move with my family because, I mean, my dad worked there. My grandpa worked there on my mom's side. Most of my family worked there. They all ended up unemployed and my aunt is the only one that's really kind of staying afloat over there now. The whole town...

DONVAN: So, Alex, I mean, is it still a sense of a community or does it just feel like a life raft?

ALEX: What was that?

DONVAN: Does it still feel like a real community or does it just feel as though it's something that's hanging on by its fingernails?

ALEX: Yeah. I go there all the time for holidays and it just doesn't have the life it had when I was younger. It just looks like a ghost town most of the time because the small businesses are all failing over there.

DONVAN: But it's ghost town with people in it and those people are your people. Why do you think that they stay?

ALEX: Well, I mean, for the same reasons most people want to stay at the place they live in because it's like home to them, but I mean, there's not a lot of choice. Apparently, I didn't have much of a choice. My family didn't.

DONVAN: Right. But are they staying because they think it's going to turn around or more - they just don't feel...

ALEX: Well, there has been a few little glimmers of, like, hope here and there, like they were talking about building a casino inside the old airport or the hub or whatever it was.

DONVAN: Yeah. The casino option. It's always out there.

ALEX: Yeah. Eventually, that was shot down, but there's been quite a few little plans they had, but it never - none of them ever actually pushed through and I guess a lot of people are staying there just to - you know, just in hope that something will come up, something will fix it.

DONVAN: All right. Alex, I want to thank you for your story. Thanks for sharing that. I want now to bring in Richard Longworth. Richard Longworth is the author of a book on this subject. It's called "Caught in the Middle: American's Heartland in the Age of Globalism." And he's joining us from member station WBEZ in Chicago.

Richard, thanks very much for joining us.

RICHARD LONGWORTH: John, it's my pleasure.

DONVAN: So are we talking about a very widespread pattern here?

LONGWORTH: We're talking about a general pattern, certainly, across the Midwest and in other areas, some down south, but the Midwest was the old industrial heartland of the United States. We kind of invented industry in much of the economy, here, on the basis of a lot of good ideas 100 years ago.

Big corporations, heavy industry, most of them. A lot of them auto-connected, heavy machinery, farm machinery, and we've lived on that for the past 100 years. A lot of, also, consumer goods like Maytag refrigerators. And those are the jobs that are going away now. This isn't something that started with the recession, as Chaz Allen pointed out. Maytag left in 2007, before the recession began. It's been going on for some 20 or 30 years.

The recession has focused a lot of minds here on, what are you going to do about it? I think there's a realization that the good old days aren't going to come back to towns that relied on one industry or one factory.

DONVAN: Was it an insane idea in the first place to rest on the assumption that there would always be this one employer in town or was there a time when it made perfect sense?

LONGWORTH: Well, at one time, it made perfect sense. You had this broad sort of working class-middle class. People here who hadn't graduated from high school, carried their lunch in a lunch bucket, but still owned their own homes, owned a car, had a cottage by the lake, took vacations, lived kind of a middle class way of life.

And for several generations, this held true and people just assumed that your grandpa worked in the factory, your daddy worked in the factory, you'd work in the factory, your kids would go into the factory. This was something that was never going to end and then it ended.

DONVAN: Well, let me put that question in a different way, Richard. Going forward, would it be ill-advised for any town to have a relationship with an employer in town where that employer is the only one? Or should all the towns out there be trying to figure out ways to immediately diversify their base?

LONGWORTH: Well, I think diversification is certainly the way to go. As Mayor Allen of Newtown pointed out, they've got a couple of wind turbine companies in there. They have an IT company in there. They've got some engineering companies coming in. Their point is that, rather than have one company employing 4,000 people, they'd rather have 40 companies and each employing 100 people. And that certainly makes a lot more sense because there's more resiliency.

DONVAN: How easy is that to achieve?

LONGWORTH: It's hard work.

DONVAN: Yeah.

LONGWORTH: We built this industrial economy. It took a certain shape based on these big corporations, served us well for 100 years and now it's gone and now we've got to do it all over again. It's going to take a long time, but a lot of smart people are thinking about this.

DONVAN: So it's essentially the issue of manufacturing. If manufacturing were still an American byproduct, this might not be happening?

LONGWORTH: No. There is life in manufacturing. I think we have to remember, there's not as many jobs in manufacturing. Gary, Indiana is kind of the headquarters of the nation's steel industry now. They turn out as much steel there as they ever did. There's terrific productivity, but they do with about one-tenth as many workers.

But there are good manufacturing jobs, like these wind turbine jobs that Mayor Allen was talking about, but they're going to be a different kind of manufacturing jobs, not the old assembly line jobs, not the routine consumption type jobs, but much more high tech, taking higher skills. High school dropouts don't cut it anymore. Kids have to have at least a couple years of community college to work and, hopefully, more beyond that.

DONVAN: The center of this phenomenon appears to be in the Midwest and I want to go now to the Midwest to Barry. You're in Flint, Michigan. And Barry, you worked for Buick. Is that correct?

BARRY: Right. I worked for Buick for almost - retirement, (unintelligible) go to retirement.

DONVAN: And so what happened? Did you lose your job? Was it a downsizing or is the plant gone?

BARRY: It's like when they was bombing Afghanistan, it looked like they practiced on plants first. They took out everything. I mean, my daughter, she moved to Jersey because she could see the writing on the wall. And when she came back to visit, she couldn't believe those factories were torn down. It's just all gone. It's just like one big floor plan. That's all you see. One big floor plan of Chevrolet, AC, Buick, on and on and on.

DONVAN: Well, I've been to Flint, and what also is empty are a lot of the houses. I've literally seen bulldozers go in on an afternoon and knock down five or six houses because the theory is that we've got to shrink the town because it's just not what it used to be. And I left there...

BARRY: Well, that, too.

DONVAN: Go ahead.

BARRY: That, too, and you've got these punks going around setting fire to these houses. So you've got one house on fire and two houses on either side getting scorched because somebody's burning these houses up.

DONVAN: Yeah. Barry, thank you for your call. I want to turn again to Richard Longworth about that. You know, we've been talking about the job, you know, from the point of view, I guess, of the psychology of the individual who loses it. That's tough, it's difficult, it's embarrassing, humiliating and demeaning. But what happens to the fabric of communities where these jobs go and bouncing off what Barry just told us about Flint and the buildings burning?

LONGWORTH: John, you know, it's hard to say, but some of these old towns might not have a future. It's not that the earth is going to open up and swallow them, but they continue to shrink. You know, workers who lived in these towns like Barry in Flint will stay there, but smart kids, like Barry's daughter will pick up and move away. We're losing a lot of our smartest kids. We're losing a lot people.

Towns are shrinking. One of the things that people are talking about out here is something called the Shrinking City Concept. That is, you've got a town that maybe was 200,000 people. Now, it's about 70,000 or 75,000. It's never going to be as big as it used to be, so how do you make a decent place to live for a smaller town?

This is a lot trickier in the south. It's not just a matter of knocking down some old houses, but places like Cleveland and Detroit are signing onto the Shrinking City Concept, too.

DONVAN: Can I say, also, that shrinking a city so reverses the psychology of this country over 200 years where we grew and we spread and we traveled and we pushed the frontier back and now to have the frontiers - to be sucking them back in somehow doesn't sit right.

LONGWORTH: It doesn't sit right at all, but Youngstown, Ohio's a good example. That was a steel city. About 30 years ago, all the steel mills collapsed. There was a great sense of denial in Youngstown. People thought, yes, the steel mills will come back sooner or later. Youngstown now has a new, young mayor, too young to remember the old steel mills, not hung up on this denial, who is trying to build a smaller, but decent town there, working with local businesses, working with Youngstown State University. It's a community effort, as these rebuilding efforts has to be, not just companies, but everybody in town, all the stakeholders involved. They've got a couple of new IT companies in there. They've got an incubator. They're trying to fix up their downtown. They are long ways away from making it what they want it to be, but this is the plan now.

This may be the wave of the future for these towns. Or conversely, it may mean just throwing in the towel.

DONVAN: That they're done. Michelle in Port - you're in Port Charlotte, Florida, and joining us in the conversation. And I'm guessing your story does not begin in Florida.

MICHELLE: Not really.

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MICHELLE: The towns where I grew up, it was more like a twin town. So it was Molt and Kalispell(ph). There were three industries altogether. And between the '80s and the early 2000s, they had all gone. And so you'd expect you'd be growing up and joining one of these factories, and there was absolutely nothing for you anymore.

DONVAN: So is that why you're gone?

MICHELLE: You know, most of the kids, they either went off to college. Or if they couldn't get a scholarship, they just joined the military like me.

DONVAN: So do you have any ties with the old town, in any way?

MICHELLE: Well, my family - everybody's still there.

DONVAN: Yeah.

MICHELLE: The - a few of the industries - Molt Windows went - was bought by China. And then, I guess, they moved back in the early 2000s, but all the people that had previously worked there, they had gone on and done other things, because in the 10 years between the plant closing and reopening, they had to have done something.

DONVAN: All right, Michelle. Thanks very much for sharing your story with us. We're also getting your emails. And Tyler Vier(ph) - I believe I'm pronouncing that correctly, Vier - says he was in Greenville, Michigan when Maytag shut down 3,000 jobs. A new company then came in and opened a solar panel factory, Richard. And then he says, unfortunately, they've just now laid off half of their workers, and they have had extreme difficulty there finding qualified workers. And Tyler is communicating with us from Grand Rapids at the moment. But that's an interesting - is - towns talk about wanting to do a reinvention, and yet maybe they don't have the tools. What about that?

LONGWORTH: This was - actually, it was an Electrolux plant. It had been there forever. It was key to the town. When it closed, it looked like they were going to turn out the lights. And then this solar panel company came in, promising something like 1,200 jobs - not enough to replace the 3,000, but, you know, gave Greenville a shot at a future. As you said, these jobs - some of these jobs have materialized. Two of these plants are up and running. They had hoped that about half of the old Electrolux workers would get jobs there. As it turned out, less than 10 percent did. A lot of this is probably because you can't take somebody, a high school dropout who has been on an assembly line all life and turn him into a high-tech worker.

You have here what we saw - certainly in the collapse of the steel industry 20 years ago in Chicago - sort of a lost generation of older workers. And by older workers, I mean people 35 or 40 who may not really have much of an economic future. So the question is: What can we do for their kids? What can we do for our younger generation?

DONVAN: All right. We're talking about what happens in one-company towns when the one company pulls the rug out. You're listening to TALK OF THE NATION, from NPR News.

Richard, I was looking at an article in the Economist, which tells us, interestingly enough, that one-company towns are now becoming the pattern in China. Is that telling us about the transition of manufacturing jobs, or is it simply telling us something about the way China is organized?

LONGWORTH: I think probably more of the latter. The - you know, it's a different system. It is an authoritarian society. They can direct funding and investment where they want. They are getting these big companies and placing them there. But the one-company towns here are probably a thing of the past. What some people are talking about...

DONVAN: And let me stop you. And is that just as well, because of the vulnerability that we now know has been established for these communities?

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LONGWORTH: I don't know what the future of China is going to be. You have to remember that these companies, this process did work for us for a century. It underlay a very substantial civilization. And we didn't modernize. We didn't innovate. We didn't look ahead. I think it is this failure to keep up with the times, not to realize that the times were changing that probably has as much to do with this as the fact that there's one-company towns. Now that these companies have collapsed, we're trying to diversify.

Some towns, Warsaw, Indiana, which is the - sort of the national headquarters of the orthopedic industry, has a number: three of the four biggest orthopedic companies in the United States. If you ever get a false hip, a fake hip, it's probably been made in Warsaw.

DONVAN: Let me...

LONGWORTH: So they're based on several companies, but one industry.

DONVAN: Let me bring in Grover from Kansas City. Grover, you're on TALK OF THE NATION.

GROVER: Well, I'm just kind of frustrated. We're talking manufacturing, and my wife is losing her job. She's in the IT industry, and there's a company here in town that processes mutual fund transactions. And they're shipping all those jobs to China here at the first of the year. And she loses her job next week. So I don't think IT's...

DONVAN: I know it's very fresh for you, then. What plan do you have?

GROVER: I don't know, because, you know, the - she's been in that job and moved up to the, you know, jobs in the company for the last 20 years. And, you know, it's - there's not a whole lot to rely on in this market anymore.

DONVAN: Did you - Grover, did you see it coming?

GROVER: I didn't. She may have, but I didn't, you know. I don't know whether she can go back to school and, you know, find something else to do. But, you know, it just kind of, you know, she's done continuing education through her career. You know, she's gotten to a point where, you know, you feel some form of security, and then all of sudden it is gone.

DONVAN: Well, Grover, we wish you the best, and we wish your wife the best, as well. And thanks very much for sharing your story with us. I also want to thank Richard Longworth for joining us. He's a senior fellow at the Chicago Council of Global Affairs and author of "Caught in the Middle," which certainly describes the phenomena we're talking about. He joined us from member station WBEZ in Chicago. Thanks very much, Richard.

LONGWORTH: Thank you, John.

DONVAN: Coming up on the Opinion Page, inventor Dean Kamen says politicians have it all wrong with their focus on creating jobs. Stay with us. I'm John Donvan. This is TALK OF THE NATION, from NPR News. Transcript provided by NPR, Copyright National Public Radio.