Steel Town Faces Challenge of Deindustrialization

ROBERT HOWARD, Youngstown Fights Back (1979)

The effects of the global economy were felt across America in the 1970s as American industry faced low-wage competition from overseas, leading to an erosion of the manufacturing base. Youngstown, Ohio, long a center of steel production, lost its competitive edge to lower-priced Japanese steel and corporate buyouts. In this excerpt, The New Republic chronicles efforts by steelworkers to reverse the effects of deindustrialization.

Studies rate Youngstown as the most economically depressed metropolitan area in the state of Ohio (where the competition is stiff). The local economy suffers from an extreme version of the general problems affecting the entire American steel industry. Youngstown is representative of urban areas throughout the northeast — a working-class city burdened with an outmoded industrial plant and victimized by the flight of badly needed capital to more profitable climates in the south and southwest.

But there is a new big idea afloat in Youngstown today. It does not come from any of the traditional leaders in the political life of this northeastern Ohio community.… During the past year a group of about 200 local religious leaders calling itself the Ecumenical Coalition of the Mahoning Valley has led a sustained community effort to combat economic decline. After the closing of a major steel mill in the Youngstown area, the Mahoning Ecumenical Coalition and its supporters — an unusual mixture of church groups, veterans of the new left and local activists in the steelworkers’ union — have devised a plan for a community and worker-owned corporation to purchase the mill and its operation.

In September 1977, the Youngstown Sheet and Tube company announced the closing of major portions of its Campbell Works mill. Sheet and Tube had been a locally-owned company since its establishment in 1902, but in 1969 it was swallowed up by a sunbelt conglomerate, the Lykes Corporation from New Orleans. Lykes’s occupation of Sheet and Tube is a history of neglect. Lykes put in only about one-fourth of the capital investment necessary to keep the plant from deteriorating, let alone attempting to modernize it. Sheet and Tube’s substantial cash-flow was diverted to other Lykes projects. Finally Lykes decided to write off the Campbell Works. The first of 4,200 workers were laid off days after the closing announcement. In the Youngstown suburb of Campbell, where most of the mill is located, 80 percent of the town’s tax base disappeared from the books.

The layoffs shocked Youngstown. Industrial closings were not new to the Mahoning Valley; 10,000 jobs have been lost since 1950. But the size and suddenness of the Campbell layoffs caught everyone by surprise. Traditional business, labor and government circles were paralyzed. Local politicians could do little but point to the same villains that Lykes had cited to excuse the mill closing: foreign steel dumping, federal environmental regulations, etc. Leaders of the United Steelworkers were equally unhelpful. In a meeting in Washington with angry Youngstown steel workers, union president Lloyd McBride urged that the lost jobs be written off, that union locals work to preserve those that still remained.

The Ecumenical Coalition led by Roman Catholic Bishop James Malone, has tried to fill the institutional vacuum with a strange blend of old-time community capitalism and 1960s participatory democracy. Two months after the layoffs, the Coalition produced a manifesto entitled “A Religious Response to the Mahoning Valley Steel Crisis,” arguing that large corporations must be accountable to the individuals they employ and the communities where they are located. The Coalition statement found ready supporters among certain officials of the affected United Steelworkers’ locals. Caught between the anger and disillusion of their members and the apparent indifference of the international union leadership, these union activists were the first to suggest the idea of community ownership. The Coalition then contacted experts outside the immediate community whose legacy is largely that of the new left. Economist Gar Alperovitz, director of the Washington-based National Center for Economic Alternatives, proposed that the Youngstown people risk something big — a massive project to buy the Campbell Works and to run it through a corporation owned by the workers employed at the mill, members of the Youngstown community and a minority of outside investors.…

Critics of the plan see it as the beginning of a permanent federal subsidy to part of the steel industry. Executives of United States Steel and Republic Steel, the two major competitors of a would-be community-owned mill in Youngstown, have condemned the proposal as “socialistic,” even “communistic.” Local business people express fear that big government would be invading the Mahoning Valley. William Sullivan, director of the Western Reserve Economic Development Association, a development group financed primarily by local industry, claims that the costs of modernization have been seriously underestimated and that the mill has been closed too long to retrieve its original markets.

Coalition supporters claim that the role of the federal government will be far less substantial than the feasibility study suggested. Alperovitz said, “the key issue is that of markets; it overwhelms all the subsidiary technical issues.” … Bernt Rathaus, a steel industry consultant and former vice president of US Steel, claims that the outlook for a new small company is excellent because major steel buyers like to hedge against potential steel shortages by using a diversity of suppliers. Letters to Alperovitz’s Center from the purchasing departments of American automobile manufacturers seem to confirm this judgment. Alperovitz now says guaranteed federal procurement may be unnecessary, and the only federal assistance the plant would need would be $150 to $200 million in loan guarantees.

Coalition leaders argue that their proposal is a challenge to the federal government to support a new way to confront urban problems. “Youngstown is in a situation where the other side has no answer,” Alperovitz said. “We are convinced we can run the mill with a profit margin of 10 to 14 percent, but private industry wouldn’t touch it unless profit approaches 18 to 22 percent. Alperovitz estimates that even doing nothing to help the Youngstown experiment would cost the public sector $60 to $70 million in tax losses and social service benefit payments during the first three years. So according to the Coalition, either the federal government can spend tax dollars on unemployment and welfare, or it can support a project that attempts to solve the central problem. “The value of the Coalition project is as a demonstration of new forms of economic organization,” says Coalition lawyer Staughton Lynd. “It’s not just another business. It ought to be viewed as a kind of TVA for the ’70s — socially desirable for its own sake.”

So far the Ecumenical Coalition’s major victories have been political. With growing sophistication, it has established itself as the primary agent in any attempt to revitalize the Mahoning Valley steel industry. A year-long “Save Our Valley” organizing campaign begun shortly after the layoffs publicized Youngstown’s economic problems and promoted the idea of community ownership. Local residents and unions, and church groups across the country, deposited more than four million dollars in symbolic, no-risk Save Our Valley accounts in Youngstown banks. Using its nationwide religious contacts, the Coalition had an effective national and local political network in place by the end of last summer. The public relations campaign has been so effective that those opposed to the community ownership project have found it impossible to openly criticize the religious group’s work; “it’s a little like coming out against apple pie and motherhood,” in the words of one Youngstown business leader. Before the November election, the Ecumenical Coalition asked all Ohio candidates for public office to commit themselves for or against the community ownership plan. As a result, telegrams of support came in from all over the political spectrum. Governor James Rhodes, running hard against his liberal Democratic opponent Richard Celeste, promised to ask the state legislature for $10 million for the Youngstown project.

The real target of the Coalition’s campaign has been the Carter administration. The tactic has been to appeal to the president’s favorite theme of self-reliance. A full-page ad in The Washington Post signed by 2000 Ohio religious and community leaders announced “Mr. President, Youngstown’s job crisis is a moral issue.… We need your help to keep self-help alive there and in the rest of Ohio.”

So far the federal response has been contradictory, positive enough to suggest active interest, guarded enough to avoid any real commitment. The Youngstown project is caught in a struggle for control of federal urban policy between the Commerce Department and the Department of Housing and Urban Development. HUD officials have waxed eloquent over the project — “precisely the sort of local initiative we are looking for,” HUD Secretary Patricia Harris said. An inter-agency task force under presidential aide Jack Watson is studying the proposal; it has already planned $100 million in loan guarantees to combat structural unemployment in the Mahoning Valley steel industry. But the Commerce Department, with its close ties to the business community, has opposed the plan. Also, Attorney General Griffin Bell’s controversial approval of the proposed merger between Lykes and another conglomerate that owns Jones and Laughlin Steel Corporation would create a powerful new steel company that would increase the difficulties facing a new mill in the Youngstown area.

For the moment, the Carter administration is holding off from committing itself one way or the other. Another study, a more detailed examination of potential markets was commissioned in October and is just getting underway now.

The steelworkers of the Mahoning Valley face a crisis that is not only economic but also political and cultural. The economic changes symbolized by the Campbell layoffs threaten an entire way of life. That life was shaped by the growth of the American steel industry, the labor struggles of the 1930s, and the subsequent partnership of big business and big labor forged in the Second World War.

“Since I been two or three years old, I seen that mill,” one Youngstown worker said. “Then all of a sudden, you see the place dead. I worked there for years, still go by every day. ’Course you’re not allowed in there now; you’re out. Living here all my life I see these things, just like sand castles washed away. And I can’t understand why.” The same thing happened to Appalachian miners of the 1950s. “We’ve got guys in the mill who were run out of West Virginia and Pennsylvania when the coal mines went bust,” Ed Mann said. “And now it’s happening here.”

These men see clearly that their needs are not being met by conventional agencies of power … not by government, certainly not by business, not even by labor. They make up an available constituency: disoriented, angry, increasingly willing to move toward organizations that will meet those needs — or appear to do so.

The Ecumenical Coalition has recognized this — the inadequacies of the traditional forms of political description to solving new economic problems. It has fashioned a proposal that cuts across the conventional categories. As a result, it has gained the support of a growing portion of this available constituency.

As the political system attempts to respond to citizens’ distress about the economic realities of the 1970s, a social movement has developed in a direction quite opposed to America’s much touted “move to the right.” The Youngstown experiment may be the harbinger of a progressive movement aimed at that very group conservatives have proclaimed to be the bedrock of the silent majority, the traditional white ethnic working class.

Robert Howard, “Youngstown Fights Back,” The New Republic 180 (January 6, 1979): 19–21.

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