COLUMN ONE : Rust Belt’s Recession Cushion : Ft. Wayne illustrates how jobs were lost but regained. Wage cuts have helped to make the region more competitive. But the price is a lower standard of living.
Sandra Lewis, 47, laid off 10 times in the last 10 years, got some encouraging news last month. Tokheim Corp., one of the companies she used to work for, declared that it will bring 300 assembly jobs back to town from Tennessee.
The announcement seemed to cut against the economic news of the moment: The industrial Midwest is finally being enveloped by the recession which, for a change, started on the two coasts before working its way inland.
But things have changed around here since the last recession, and Tokheim’s decision tells an important story about the region’s changing of economic gears. Ft. Wayne has risen from the wreckage of the early 1980s, but a price is still being paid by a battered, shifting work force in a community where layoffs remain part of the rhythm of life.
A big maker of gasoline pumps and other equipment for service stations, Tokheim shipped 200 jobs to Newbern, Tenn., in 1980 to escape what it considered high union wages and labor trouble. That put the $9-an-hour Lewis out on the street.
It was part of the massive job erosion in the early 1980s that hit Ft. Wayne as hard as any place in the Great Lakes region. Nearly 30,000 local jobs--16% of the employment base--disappeared between 1979 and 1982, culminating with the shutdown of an ancient International Harvester complex that had employed up to 10,000.
Since then, Lewis has proved highly employable--but at cheaper wages. She bounced from factory to factory and layoff to layoff, most recently getting $6.25 an hour at a small wire die shop.
Economists say such wage cuts are embedded in the new skin that has been grown by the region’s economy.
This winter, as fresh layoffs ripple through town, Tokheim learned just how much has changed. Thanks to newly pliant union leaders, it can return its assembly operations to Ft. Wayne for $1 an hour less in wages than it pays at its non-union plant in Tennessee.
“I’m actually making less money now than I was making in 1976,” said Lewis. She expects to be rehired at Tokheim at $7.40--about 18% less than a decade ago not counting inflation.
Lower pay is part of the unfolding story of 5 million workers who were displaced by economic upheaval in the early 1980s. The Labor Department says 70% have found jobs, but nearly half of those--and especially the blue-collar contingent--are making less money. The Great Lakes region was hardest hit.
Some labor economists argue that the human damage has been seriously underestimated because so many victims were unskilled workers in their 40s and 50s who have drifted off society’s charts, living off relatives or fading into the underground economy.
In Ft. Wayne, some workers were crushed by the experience, some were rejuvenated, some were simply aged by it. They make up a tableau of personal turmoil whose only payoff, in many cases, might be the mundane lesson it teaches their children: Get an education.
Tom Kelker, 51, a former Harvester worker, takes little satisfaction from the shoe repair shop he opened five years ago. It nets him far less money, makes him feel less worthy, chains him to work, and, contrary to his plan, does no better in a recession than any other time.
“I told my kids,” said Kelker, “that if you guys will learn from what’s happened to me, go to college, get a skill so that someone can’t sit down and, with a stroke of the pen, throw you out on the street, then I’ll accept what happened to me as a blessing in disguise.”
Kelker recalls his careful planning. Convinced that Harvester would close the truck plant where he had worked for 23 years, he opened his business the Monday after Harvester built its last truck in Ft. Wayne.
It has not been a happy change. In his eyes, he dropped from the blue-collar elite into the loneliness of a dying craft that does not even offer the fillip of male companionship.
“I’m a factory person, not a businessman,” said Kelker. “Our lifestyle changed drastically. When my sons needed me financially, I couldn’t be there. They’d say, ‘Man, where’s the ice cream?’ I told them there’s no more ice cream. I tried to stay away from our social friends. It was the self-esteem. I felt inferior.
“It has been a humbling, humbling experience. It brings you back to reality in a painful way. You really don’t know who you are until something like this happens.”
Ft. Wayne, by many statistical yardsticks, became one of the big success stories of the 1980s. As its fall was steeper than most cities’, so was its rebound, as its manufacturers became more competitive and rode the export and defense booms to new economic health.
Embracing rather than turning away from its heavy-industry tradition--this part of Indiana has long turned out such products as engine pistons, military equipment, bratwurst and beer-- the region by the late ‘80s was suddenly posting unemployment rates below 3% compared to 14% in 1983.
The loss of 28,000 jobs was followed by the gain of 57,000, says Thomas Guthrie, director of the Community Research Institute at Purdue University. Ft. Wayne earned a spot on Inc. magazine’s 1989 list of the fastest growing places in the country, based on job and economic growth, outpacing the rest of Indiana, other Great Lakes states and the nation.
Though northeast Indiana remains heavily tied to manufacturing, there was even a bit of diversification: The biggest employer in town is now Lincoln National Life Insurance Co. The city boasts that half the job growth was due to aggressive economic development efforts that lured new employers.
But some of the “diversification” was actually a shifting of manufacturing jobs from Ft. Wayne to the rest of northeast Indiana, says Guthrie: “In part, we’ve traded high-paying union jobs in and around Ft. Wayne for relatively low-paying, non-union jobs farther out” in surrounding rural areas.
Some economists say that the new competitiveness of the region’s manufacturers (some Japanese-owned), the export of heavy machinery, the general health of local banks and the area’s insulation from the real estate roller coaster all bode well for Ft. Wayne’s performance--and that of the industrial Midwest--in the new recession.
“This is a much less severe situation,” says Diane Swonk, regional economist at First National Bank of Chicago, who sees the Great Lakes states outpacing national economic growth in the 1990s. “Yes, some areas are starting to see 7.5% unemployment. But that’s only half what these states experienced in 1982.”
But the anxiety is palpable. The layoffs have never really stopped in Ft. Wayne, even as other jobs were being created. Falstaff closed its brewery last year, eliminating 500 jobs. Tokheim laid off workers in October at its fabrication plant here. With the sharp downturn in auto production, Dana Corp. last month laid off 300 workers at its axle plant.
And lately, the big new General Motors pickup truck plant that opened in 1987--its 3,000 workers virtually all transplants from GM plants elsewhere--has been closed because of poor sales.
“I think Ft. Wayne is in a better position to withstand this recession in that I don’t see this as a typical, inventory-driven recession,” Guthrie said. “But if we were to have a traditional recession, I don’t think Ft. Wayne would do much better than it has in the past.”
Says Mayor Paul Helmke: “We’ve diversified somewhat. But not as much as I’d like.”
Ft. Wayne’s economy and its workers remain a vulnerable blend of the old and new.
An emerging work force labors away for a new breed of employer, such as the Sears catalogue phone ordering center employing 1,800, many of them part-timers, or ND-Tech Corp., the new Japanese auto parts plant on the edge of town that hires only ambitious young part-time college students.
“The people who are just looking for a job, we’re not interested in,” says Dan Yamanaka, ND-Tech’s executive vice president. “We’re looking for people who want to get ahead.”
Those displaced in the early 1980s are older, often less flexible, and only sometimes wiser. For many, the boasts of jobs aplenty in Ft. Wayne ring hollow.
Every workday at 3:50 a.m., about 150 sleepy workers pull into the parking lot at the K mart store in Ft. Wayne and climb aboard four buses bound for the Navistar truck plant in Springfield, Ohio, 2 1/2 hours away. They will work a 7-3:30 shift, get back on the bus and reach home by 6 p.m.
They are among the high-seniority workers from the former International Harvester (now named Navistar) truck plant here who were able to get work in Springfield when the Ohio plant beat out Ft. Wayne’s in a sad, town-against-town competition for jobs in 1982.
Most of them moved to Springfield. But others didn’t want to leave their hometown, including Bob Maidens, who bought a few over-the-road buses and started a transit operation back and forth. Cost: $35 a week, no smoking, no booze.
The Navistar passengers rotate as workers finish 30 years with the company and are replaced by others on a recall list maintained by the United Auto Workers union. Today, more than 1,000 people from Ft. Wayne are waiting to be recalled by Navistar--a limbo that makes them all the less employable and hostages to the past.
But no employer in Ft. Wayne can match the pay.
In the endless post-mortem on what went wrong, some workers say privately what the free market proclaimed loud and clear: that they were paid too much and, therefore, had helped undermine the Rust Belt’s ability to compete with the rest of the world. Says an ex-Harvester worker:
“You don’t want to say it at the union hall, but we are part of the reason for the collapse. Let’s be honest. We made a lot of money, let’s say that. I hate to admit it, but we were overpaid. I’d rather have 80% of something than 100% of nothing. I got the 100%.”
The UAW and other unions have been losing ground here for years. At Tokheim, the UAW local last month agreed to a seven-year contract with a 10-year no-strike clause and a two-tier wage system.
Larry (Smoke) Lewis is the sole remaining staff member of UAW Local 57, the old Harvester local. He looks after the pension needs of some 2,600 retirees in the community. Across the street from his office is the Harvester tower, a lonely landmark that rises above the dozen or so old industrial buildings that made up the enormous Harvester industrial complex.
After Harvester left, Lewis says, there was nobody to keep a floor under the wages in Ft. Wayne. From the union’s perspective, Harvester workers weren’t overpaid--the other guy’s workers were underpaid. Pay a worker bicycle wages and he will buy bicycles, not cars.
“You take all the good-paying industry out and what do you got?” Lewis asked rhetorically. “How in hell do these people buy cars and houses? I’d hate to be a kid today.”
Times researcher Amy Harmon in Detroit contributed to this story.
A REGION REBOUNDS
Employment in northeastern Indiana, including Ft. Wayne, fell far faster in the recession of the early 1980s than the job levels in either the nation as a whole or the Great Lakes region. But the Ft. Wayne area’s economy started regaining strength in 1984 and has rebounded more strongly than that of either the United States or the region.
The index shows how employment compares to where it was in 1979; for example, in 1982, employment in northeast Indiana was only 88% of its 1979 level, and in 1989 employment was 23% greater than what it was in 1979.
