Beyond the Bailout: Why We Need a Regional Effort

Winter came early to the Mahoning Valley this year. Just last August the corporate, union, and political leadership of our community gathered in a makeshift auditorium on the floor of the Lordstown plant to hear GM’s CEO Rick Waggoner pledge  to replace the Cobalt with a new “world car,” the Cruze. This announcement came on the heals of GM’s announcement that it was adding a third shift and recruiting redundant workers from Shreveport, Louisiana and elsewhere. Many believed that, after years of hard choices the Mahoning Valley could finally compete in the global marketplace with a car people would buy because of its design, quality, and fuel efficiency.

But then the blizzards came. First was the banking meltdown. Investment banking houses folded over night.  Then came the credit crunch, as commercial banks began to severely constrain their lending practices.

The results of these two storms have been catastrophic for the automobile industry. Lack of consumer credit and unemployment-or the fear of unemployment-have caused car sales to plummet As a result, GM has cancelled Lordstown’s the third shift and furloughed workers-many of whom recently moved to the Valley to take up what appeared to be secure jobs.

And then a third storm-Federal indifference-hit the automobile industry and impacted the entire Great Lakes. The Big Three automakers flew to Washington to make their case for financial assistance. They came prepared-or so they thought-for a fair hearing. But, a hostile Congress rejected their plea. Instead they demanded that the Big Three pursue “planned bankruptcy, ” the UAW immediately agree to givebacks, and at least one CEO-preferably GM’s Wagonner-resign.

In the midst of all of this posturing, the impact of industrial bankruptcy on our region’s communities was once again conveniently ignored.  Although Bush stepped in on Friday with a bridge loan, the industry’s challenges – and the risk to the region should the auto industry ultimately collapse – remain.

This is not a new story. Since the collapse of Detroit’s Packard Motor Car Company in 1956 the nation has failed to anticipate and effectively address the impacts of deindustrialization on Great Lakes communities.

The incoming Obama administration, with a Great Lakes president who won with solid support from the region offers some hope that Washington will change this approach. Given entrenched opposition to our economic interests, however, we must develop effective strategies that will address the challenges facing our entire region. To do so we should take a page out of the Southern states’ playbook.

The Southern states, whose senators and representatives expressed some of the strongest enmity to the Big Three, has long taken responsibility for its economic future. In 1971, the governors of 13 southern and border states established the Southern Growth Policies Board to develop sophisticated data-driven regional economic development strategies to address the needs of the entire Southern regin.

The Great Lakes states, by contrast, have made only modest region-wide economic development efforts, choosing to focus principally on preserving the integrity of the Great Lakes watershed. As a consequence, region-wide economic challenges-be they shrinking cities or threatened core industries-are poorly understood and ineffectively promoted at the national level. Crisis management has become the norm as individual industries and communities have been left to fend for themselves.

The time for action at the regional scale is now. The debacle of the automobile bailout debate demonstrates that the leadership in other parts of our country-on the coast and in the Southern states-has little understanding of or concern for the interests of our region’s historically industrial communities. An eleventh-hour campaign to save companies on the verge of bankruptcy is not an effective way to advance region-wide interests. Concerted, data-driven public policies informed by the experiences of other, similarly challenged regions in this country and abroad, are the only way out of a structural economic crisis that threatens our people, our places, and our way of life.

As the South has risen, so must the industrial North: don’t complain, organize.

Hunter Morrison

Youngstown’s Future and the “Tech Belt Megapolitan”

Youngstown 2010, the city’s award winning community plan, is structured around four principles that have provided the framework for all of the work that has followed:

  • Accepting that Youngstown is a smaller city
  • Defining Youngstown’s role in the new regional economy
  • Improving the area’s image and enhancing quality of life
  • A call to action.

Most of the favorable attention Youngstown has received for 2010 has resulted from the first principle-focusing on being a smaller sustainable mid-sized city rather than continuing to mourn the past. Less attention has been devoted to the second principle-defining Youngstown’s role in the new regional economy.

Both physically and mentally Youngstown is located at the center of a bi-state region. Despite this fact, Youngstown has long defined itself as being at the edge of two urban centers-Cleveland and Pittsburgh. This perception is beginning to change because our nation and region are changing. As the community understands these new realities, we will be better able to identify new economic opportunities for Youngstown and the Mahoning Valley.

To thrive in this changing world, we must take a long view-looking 30 years ahead to new economic patterns rather than looking back to the industrial world of more than 30 years ago.

Between now and 2040 our nation will absorb another 100 million people. Only India, with a population of 1.1 billion, will add population more quickly than the United States. According to Arthur Nelson and Robert Lang of Virginia Tech’s Metropolitan Institute, the majority of this population growth will be accommodated within just 20 “megapolitan areas.”

Megapolitans are, in essence, the Combined Statistical Areas of the 21st Century. Like CSAs, megapolitans are defined by empirical evidence of overlapping commuting patterns. The country’s 20 megapolitan regions are already home to about 60% of Americans and account for nearly 70% of our Gross National Product. Nelson and Lang project that this economic dominance will only intensify by 2040.

Northeast Ohio and Western Pennsylvania together constitute one of the 20 megapolitans. Nelson and Lang call it the “Steel Corridor,” a name which evokes the region’s proud past but unfortunately does not point to a promising future. Congressman Tim Ryan and his colleague in Western Pennsylvania, Jason Altmire of Aliquippa, have coined a more future-oriented name, the “Tech Belt.”

The Steel Corridor/Tech Belt is home to 7.1 million people. It is larger that Ohio’s other megapolitan, the “Ohio Valley,” anchored by Columbus and Cincinnati (5.3 million) and is the same scale as the “Carolina Piedmont,” anchored by Charlotte and Raleigh (7.0 million), the “Georgia Piedmont,” surrounding Atlanta (6.9 million), the “Florida Corridor” linking Tampa and Orlando (7.8 million), and the “Greater Metroplex” of Dallas-Ft. Worth and Oklahoma City (7.9 million)

Despite its impressive scale, the Steel Corridor/Tech Belt is projected to remain the nation’s slowest growing megapolitan and the least likely to benefit from the nation’s projected population growth.

These projections give rise to several important questions: How can the region compete for its share of the nation’s growth in population and wealth? How can its communities compete against others in the faster growing megapolitans as places to live, work and invest? What role should city governments and universities play in advancing our understanding of the threats and opportunities that lie ahead?

Many across the region are beginning to ask these questions.  On October 1, 2007, Representatives Ryan and Altmire co-convened the first “Tech Belt Summit,” bringing to Youngstown State University 100 business, educational, and philanthropic leaders to discuss organizing a Tech Belt initiative to leverage the strengths of the entire region.  Ryan urged the participants to think of the Tech Belt not as a collection of aging steel centers but as an “economic unit able to compete with Shanghai and Mumbai.”

This summer the regional dialogue continued when Youngstown State University hosted the first “Cleveland+Pittsburgh+Youngstown Regional Learning Network,” a collaboration of community organizers, public officials, and philanthropies dedicated to making the region’s communities attractive, equitable, and sustainable.

The Learning Network has invited Ryan and Altmire to discuss their Tech Belt initiative at its second summit-a day-long session at the Youngstown Club on November 7,, 2008. I would urge area residents concerned with the future of our region to join the Network and attend this session.

Everyone else should keep an eye on the “Steel Corridor.”  Youngstown’s experience of deindustrialization predicted what would happen around country in the 1970s and 80s; our “Tech Belt” future may well do the same for 2040.

Hunter Morrison

Economic hope for the Mahoning Valley

On August, 21, 2008 General Motors’ CEO Rick Wagoner stood on a makeshift stage in front of a packed audience of Lordstown autoworkers, state and local politicians, and civic leaders from the Mahoning Valley to announce that his troubled global company would invest $350 million to retool the plant for production of the new Cruze line. GM’s announcement represents more than just an infusion of corporate capital in a production line. It is a profound vote of confidence in the future of the Mahoning Valley.

Almost 31 years ago, on September 19, 1977, Youngstown Sheet and Tube’s Campbell Works was closed without notice, leaving thousands out of work and beginning to dismantle the country’s third largest steel producing center. For decades, the people of the Valley had boasted of “Thirty Mills in Thirty Miles.”  By the mid-80s, that had became a bitter memory as mill after mill closed.  Ultimately the demise of the steel industry left 50,000 people out of work and devastated the Youngstown area.

Over the next 25 years the city’s population shrunk in half. As laid-off workers left to pursue opportunities elsewhere, foreclosures, abandonment, and tax delinquency ripped through once proud neighborhoods.  Along with manufacturing jobs, families lost their houses, their dignity, and their hope for the future. The Valley’s social service agencies were stretched to the breaking point.  Local governments cut staff dramatically, shut off street lights, and deferred all but the most essential services.  Downtown Youngstown became a stage set of the empty storefronts, roofless commercial buildings, and abandoned lots, used by reporters and politicians to illustrate the impact of deindustrialization in the Great Lakes. The once fierce sprit of the Valley, like the fires of its mills, was extinguished. For many, optimism was replaced by despair, anger, and resignation.

A generation was to pass before the devastation began to reverse. The past 5 years have been a time of profound change.  New leadership has emerged in the Valley’s two major cities-Youngstown and Warren-and in the region’s Congressional and state legislative delegations. New IT companies, focused on “business to business” software applications, are developing at the Youngstown Business Incubator. YSU began construction of a new $34 million Williamson College of Business Administration, and the state chancellor of higher education announced plans to develop a community college in the Mahoning Valley.

Despite the steady progress of the past five years, the Valley’s future has remained uncertain as people await evidence that manufacturing-long the cornerstone of the region’s economy-will once again provide opportunity and prosperity.

GM’s investment marks one of the most significant private sector capital infusions in the Valley in recent decades.  It is also a profoundly important acknowledgement by a global corporation that the Mahoning Valley is back in the game as a place to do business.

Standing shoulder to shoulder that afternoon with hundreds of UAW members and with cars moving on the production line all around us, we heard union reps talk with sober pride about the effort they and their fellow workers had made and the sacrifices they had accepted in the most recent contract negotiations to insure that Lordstown would remain competitive in the cutthroat world of global auto production. Their hardnosed realism was balanced by the enthusiasm with which they and the entire audience greeted the full-scale mockup of the new Cruze-a sleek, stylish global automobile that will go head-to-head with the competition from Honda and Toyota. What I witnessed was a team proud of wining without compromising fundamental values, of producing quality work at a competitive price, and of earning a fair wage and benefit package. It was clear that this investment in the Lordstown plant and in the Mahoning Valley economy was enormously important economically and spiritually both to the Lordstown workforce and to the wider community.

It was no small feat to get GM to add a third shift, to integrate the new workforce-drawn from places as far afield as Shreveport Louisiana-onto the line in record time and to compete for $350 million in scarce corporate capital even as GM closes other factories in the region.  Many of the speakers-from labor and management-stressed with hard won pride the importance of this accomplishment and the fact that this success resulted from collaboration and cooperation within the workforce and between labor and management.  Lordstown’s message might apply both to Northeast Ohio’s manufacturers and their employees: tough, fair, reality-based negotiations combined with a renewed competitive drive and a fierce dedication to producing a quality product can lead to success in the global marketplace.

While GM’s investment will yield tax revenues for state and local governments and create additional new jobs in the region, the most significant outcome is its effect on the heart and soul of the Valley.  As Congressman Tim Ryan told Wagoner,  GM had given the Valley something it hasn’t had for a long time: hope. He predicted that a decade hence people would see August 21, 2008 as “the day the Mahoning Valley turned the corner.”

The GM Lordstown story demonstrates that economic development is not just about making deals and cutting ribbons. It is about giving people back their hope and giving communities back their future.

Hunter Morrison