BUSINESSWEEK ONLINE : NOVEMBER 20, 2000 ISSUE
INTERNATIONAL -- LETTER FROM BUFFALO

Can Teamwork Rescue a Rust-Belt City? (int'l edition)


Charles Humphrey's memory of Buffalo's boom times is, well, concrete. ''This parking lot used to be full all the time. If you didn't get here when the other shift was ending, you couldn't find an open space,'' he says. Then he points to a long stretch of tarmac that's now empty, except for a few determined weeds and a heap of rusting machinery. Although we're well within Buffalo's city limits, there's not a car or person in sight as we scan what was once a Curtiss-Wright Corp. factory.

The contrast between past and present is striking. Curtiss-Wright, a grand name in American aviation, produced jet turbines here, and Humphrey, a 53-year-old retired machinist and former local union leader, describes a time when jobs were so plentiful that a worker had only to cross the street to change employers. Now, Curtiss-Wright, on the city's east side, is one of many Buffalo factories that are no more.

Pratt & Letchworth Corp.'s iron foundry, once a west side landmark and supplier of parts for railroad cars: demolished. Western Electric's electronic equipment factory in Tonawanda, north of Buffalo: shuttered. Then there's Bethlehem Steel Corp., just south of the city. The plant employed almost 20,000 in the 1950s, including Humphrey's grandparents. Most of the buildings are gone or empty now. Only 800 employees remain, making coke for other steel plants and operating a galvanizing line that supplies the auto industry.

Buffalo and other nearby industrial centers such as Niagara Falls, N.Y., have never fully recovered from the shock of global competition and from manufacturing's southward flight in the 1970s and 1980s. But some say the seeds of the region's decline were planted in 1959, when the St. Lawrence Seaway opened, linking the Great Lakes to the Atlantic. That reduced Buffalo's value as a shipping center. The city has shrunk steadily, from 580,000 in 1950 to 300,000 in 1999.

Humphrey, who was born in Bethlehem Steel's housing project and still lives a short drive away, takes me to all the now shuttered factories. Although I worked in Buffalo in the 1990s, this tour is archaeology to me. To Humphrey, it's something closer to a drive down Memory Lane. Before his retirement last year, he worked at all of these plants during his 33-year career. In the late '60s, he sometimes held two full-time jobs simultaneously--stopping only to grab a hot dog as he raced from one plant to the other. ''They were good-paying jobs,'' he says, ''but it was hard to pass up the chance to bring in even more money.''

GOOD SUGGESTION. It's a sunny morning in late October as we wend through what seems like an industrial ghost town. But there's one more stop on Humphrey's tour, and it shines a ray of hope on the area: the Tonawanda Forge of American Axle & Manufacturing Inc. General Motors Corp. built it in 1953, and Humphrey worked there starting in 1969. The forge has averted two closings, in the mid-'80s and again in the early '90s. Today, the forge is bustling as its workers make transmission gears and other parts for a slew of carmakers.

The secret to success at Tonawanda Forge, which employs 850, is an unusual degree of cooperation between management and unions--all the more remarkable given the region's longstanding reputation for rocky labor relations. Workers addressed a problem that cropped up after the forge, which makes unfinished car parts, was sold to American Axle. Carmakers such as Toyota Motor Corp. and BMW insisted on parts that were machine finished and ready for final assembly--but the forge had persistent problems with the finishing done by outside contractors. Union leaders came up with a bold solution: Build a machining plant and bring the subcontracted work in-house.

PARTNERSHIP. To get management to spend the $38 million needed for the new facility, the union agreed to wages that would keep costs under control. It also scrapped most job classifications, letting the company put workers where they are most needed each day. The joint effort paid off. After opening a year ago, the 120-worker plant has helped the forge hold on to its customers and is ''busting at the seams,'' says Kevin J. Donovan, a regional United Auto Workers leader who helped write the original business plan as president of the forge's Local 846. ''Cooperation goes beyond teamwork. It's a partnership,'' says forge manager Joseph P. Conroy.

A stream of people has come through the forge to learn its lessons--and some appear to have learned them well. At Outukumpu Copper's nearby brass mill, for example, workers who had been told for years to let managers do the thinking are now invited to management meetings and have formed workplace teams that handle everything from work assignments to ordering supplies. Says Anthony Strusa, a United Steelworkers member who coordinates the plant's employee involvement activities: Management ''started treating me as a businessman.''

Now, Donovan and others are trying to bring labor-management collaboration to bear on community problems. He is chair of the AFL-CIO Western New York Economic Development Group (EDG), a nonprofit created in 1999 by volunteer unionists, including Humphrey, in Buffalo's Erie County and six nearby counties. EDG is diving into regional development issues such as education. EDG wants public-school curriculums upgraded and redesigned so that even non-college graduates can get good-paying jobs. Improving school facilities is also a priority. ''If we're going to get people to move back or stay in Buffalo, we need to give teachers the best available buildings, tools, and curriculums,'' says Donovan. EDG is raising funds to renovate 80 city schools and construct six new ones over the next decade. ''We love Buffalo,'' he says.

Humphrey loves Buffalo, too. Each of his three children owns a home in the area, including his youngest, who bought hers three years ago, at age 23. ''That wouldn't be possible in many other places,'' he says. Although Humphrey bought a lot in Arizona a few years ago with the intention of moving after retiring, he sold the property this past summer. ''We're staying here.''

By CHARLES J. WHALEN
Associate Economics Editor Whalen taught labor economics in Buffalo for Cornell's School of Industrial & Labor Relations.
EDITED BY LOURDES LEE VALERIANO

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