The Midwaest Finds Life after Steel as the Industrial Heartland Pulls out of a Period of Multiple Recessions and Harsh Restructuring, It Offers Lessons for the Rest of the Country

By Laurent Belsie, writer of The Christian Science Monitor | The Christian Science Monitor, March 24, 1993 | Go to article overview

The Midwaest Finds Life after Steel as the Industrial Heartland Pulls out of a Period of Multiple Recessions and Harsh Restructuring, It Offers Lessons for the Rest of the Country


Laurent Belsie, writer of The Christian Science Monitor, The Christian Science Monitor


THERE is perhaps no better place to see the transformation of the industrial Midwest than here, high on a bluff in Pittsburgh, overlooking the Monongahela River.

Ahead is the old Jones & Laughlin Steel plant. It employed thousands before it was reduced to rubble. In the distance gleams Pittsburgh's success story. Visitors come from around the world to see how the city remade itself after the most serious challenge since the Great Depression.

So it goes throughout America's industrial belt. Blindsided by foreign competition, multiple recessions, and high interest rates, the region slowly, torturously restructured during the 1980s. Today, smaller but smarter, it offers some lessons for the rest of the country. First, there is life after restructuring, but it is a different life.

"People found it very hard to imagine that there would be an economy after steel," recalls Timothy Parks, executive director of the Pittsburgh High Technology Council. "Our economy seemed to be based on steel and mining and other industrial {sectors}. But the economic asset of the region resided underneath all that.... What it required was peeling away from the region some of the perceptions of what the economic asset of the region really was."

As it turned out, Pittsburgh's real asset was not the plants but the knowledge of the workers within those plants, he says. A biotechnology center stands on part of what was Jones & Laughlin Steel, but its opening has been held up and it stands mostly empty. That's a second lesson of the industrial heartland: Find your strengths and build on them.

Rick Brown understands that idea. In 1987, he and some colleagues took over part of a 100-year-old industrial company here and turned it into a high-tech success. His Daxus Corporation helps manufacturers be more efficient.

Although tied to the declining steel industry, Daxus succeeded because its experience in large-scale automation and process control was ahead of other industries. Today, two-thirds of its revenues come from outside steel.

"Organizations that are able to adapt and can view it as an opportunity and not a threat will survive," says Mr. Brown, the company's president and chief executive officer.

This can-do attitude is seen throughout the work force. "I found myself in an industry that was shrinking, working in a plant that was dying," recalls Tom Kennedy of his days at Daxus' old parent company, Dravo Corporation. "I looked at it as an opportunity to accomplish something. It's all in how you respond."

The problem with the Daxus model is its size. Dravo employed 100,000 people. Daxus has less than 100. Although the number of high-tech companies in Pittsburgh has nearly tripled in the past decade, they have not made up for the loss of manufacturing jobs. That's a third lesson from the heartland. Restructuring has created a great divide: While many workers do better than ever, many others never recover.

Lorenzo Wallace represents the flip side of the Daxus story. He lost his job at a Detroit coke plant in September 1991 and has been unemployed since. He gets by managing an apartment complex and teaching tennis in the summer but refuses to take food stamps. He has learned lessons, too.

"You come down a notch in money but you also gain experience," he says, sitting in a car opposite Mr. Jo-Jo's Delicatessen in Detroit. Suddenly, a man comes out carrying two white bags. "See those sandwiches? Those are $7 apiece. He's got a couple of two or three of them. That's $20 or $30. I can eat for a month" on that.

Wallace says he's got 1,000 resumes out but all the jobs either require special skills he doesn't have or are located in the suburbs. …

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