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Up in Smoke!

Could smart leaders have prevented Springfield's near-collapse--and can they save it now?


Thursday, August 07, 2008

The economic woes of the city of Springfield make for a compelling story, but hardly a unique one. Up and down the Connecticut River Valley—and, indeed, in once-thriving areas around the country—many communities have faced the same problems: the loss of industry, declining wages and layoffs, a diminished tax base, a sagging infrastructure and suffering schools, middle-class flight.

Each community, of course, has its own personalities and political intrigues, and puts it own stamp on the story. In Springfield, "Financial mismanagement, an embarrassingly antiquated tax collection system, a variety of ill-conceived economic development plans, political corruption, and soaring crime all contributed to the city's demise," Robert Forrant, a professor of regional economic and social development at UMass Lowell, wrote in a 2007 essay with the appropriately grim title "Greater-Springfield Deindustrialization: Staggering Job Loss, a Shrinking Revenue Base, and Grinding Decline." (The essay appears in The Future of Work in Massachusetts, published by the University of Massachusetts Press and edited by Tom Juravich, director of the Labor Relations Research Center at UMass Amherst.)

Exacerbating Springfield's problems, Forrant contends, has been the consistent inability, or unwillingness, of generations of Springfield's leaders to acknowledge the larger economic factors that weigh on the city and its residents. While half of the manufacturers in the greater Springfield area shut their doors between 1950 and 1987, Forrant writes, "the city and the vast majority of its elected local, state, and national officials simply whistled a happy tune, clicked their heels together like Dorothy in the Land of Oz, and assumed everything would work out; it did not."

That failure to address the city's deep problems, in Forrant's opinion, extends to the very entity intended to solve them: the state-imposed Finance Control Board. Mismanagement and corruption have taken their toll, he writes. "But what trumps these factors is something the Control Board failed to address in its first two years of running the city: the steady decline of well-paid work."

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Forrant knows firsthand the toll taken by the loss of industry in Springfield. A native of Beverly, he was working on his doctorate at UMass Amherst in the early '70s when a house fire destroyed his research and sent him into the job market. He eventually ended up working as a machinist at American Bosch.

While Bosch was one of the city's major employers —it provided about 1,800 jobs at its post-1960 peak, Forrant writes—it was not alone. Springfield was once a hub of industrial activity, with a diverse collection of manufacturers, especially in metalworking and tool and machine parts, anchored by the federal armory.

"For most of the last two centuries the Connecticut River Valley, with Springfield as its leading city, related to the rest of the country and the world as a stellar manufacturing center, its metalworkers and machinery builders fueling the nation's industrial revolution," Forrant writes. In the 19th century, Forrant said in a recent interview, the area was "the Silicon Valley of the day," with innovative manufacturers that caught the attention—and the business—of industrial leaders like Henry Ford.

Chinks in the city's manufacturing base reach back to the 1950s, when Bosch, like many Northern companies, began transferring jobs to the Southern states, where costs were cheaper, in large part due to an anti-union climate. Similarly, Westinghouse, which had a large plant in East Springfield, began shifting operations. In the late '50s, Forrant wrote in an earlier essay, that company terminated 1,500 workers at its Springfield plant; by the time it closed in 1970, only 200 employees remained.

Symbolically, the biggest blow to the city's industrial base was the federal government's decision to close the armory in 1968. A new wave of job loss in the late '80s and early '90s was the coup de grace. Forrant cites a UMass Amherst study showing that Hampden County lost 43 percent of its industrial jobs between 1980 and 2000, including those terminated by the 1986 shuttering of the Bosch plant.

Those manufacturers had for generations provided well-paying, blue-collar (and usually union) jobs and a stable tax base. They also strengthened the social fabric of the city, writes Forrant, who reminisces about company trips to Red Sox games, Bosch family outings to now-defunct Mountain Park, and a general feeling of camaraderie among employees. Outside the plant, the workers were able to buy houses and create stable neighborhoods, patronize local stores and other businesses, pay taxes that supported their kids' public schools, and even sock away some money to send those kids to college one day.

After Bosch, Forrant ran an economic development program through the Hampden County Employment and Training Consortium, trying to help unemployed metalworkers find new jobs. But finding them the kind of work—and salaries—they once had was near impossible.

"Jobs have been created, but the manufacturing base that was the foundation of the whole Connecticut River Valley, from Hartford up into Vermont—that's never been able to manage to come back," Forrant said. "The well-paying work that made greater Springfield a mecca for skilled blue-collar workers went away, and nothing comparable has been able to replace that."

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Sometimes when he's in Springfield, Forrant drives up Main Street into the North End to visit the area where the Bosch plant once stood (the vacant building burned in 2004). He remembers "a thriving working class neighborhood" filled with machine tool shops, the triple-decker houses where workers lived, the bars and diners where they went after work. "All of that stuff has been torn away," he said. "I don't even recognize it anymore.

"It's distressing to think & there was just nothing really done [to stave off the decline]," Forrant added. "People just sort of wrung their hands."

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The story of Springfield's economic decline can be told through watershed events: the closing of the armory; the massive layoffs at larger employers, like Bosch and Easco Hand Tool. It's tougher to pinpoint one make-or-break moment when its leaders committed the fatal error, made some decision or created some policy that sank the city's fortunes to a seemingly unsalvageable level. That's because the city's decline has been marked by a quiet but damaging inaction, a combination, it appears, of naivet?, false hopes, weak leadership, lazy policy making.

"As jobs disappeared and wages fell, the lack of an urgent and cogent response exacerbated the city's financial crisis," Forrant writes. On both the state and city level, he charges, there was minimal effort by the government to maintain manufacturing jobs or to address the pressing questions for deindustrialized areas like Springfield: "[W]hat next? Where will well-paying work come from? How can we educate the people losing their jobs to facilitate their transition into other high-paying work? How can we leverage the tremendous research and educational resources of the Connecticut River Valley's numerous colleges and universities to engage in long-term efforts to rebuild the employment infrastructure? How can we head off the economic misery that confronts working families?"

In an interview, Forrant suggested that this lack of action resulted from a feeling of paralysis in the face of sweeping problems: "It became a much larger problem than just Springfield, and people felt generally helpless about what to do." By the 1980s, the disappearance of manufacturing jobs was widespread and seemingly inevitable. "Any of the mayors that came along at this time—from Richie Neal on—none of them could have prevented this disinvestment by these large manufacturers," Forrant said.

But, he added, the city's leaders could have, and should have, addressed what effects the job loss would have on the city and how to mitigate them. Instead, there was a collective sense of denial. When Forrant was his union's business agent at Bosch, he recalled, workers would get wind of rumors that the company was planning to pull out of Springfield. When he asked City Hall to intervene, he said, city officials would talk to the company's executives. "They'd call me back and say, 'Bob, they said they're not leaving.' And I'd say, 'They're lying to you.'"

In early 1986, Bosch did indeed close, putting 1,500 people out of work. (Forrant has a new book, Metal Fatigue: American Bosch and the Demise of Metalworking in the Connecticut River Valley, coming out this fall from Baywood Publishing, that examines the closing of Bosch and other employers in the Valley.)

While many European cities have been able to adapt their economies to changes in technology—Forrant points to Swedish workers transitioning from shipbuilding to car manufacturing—in the U.S., we don't have a great track record for industrial economic planning. "It seems, like, communistic," he said with a laugh.

In Springfield, Forrant said, leaders have pinned their hopes on a series of unfulfilled promises: the twin '90s booms—technology and financial services—that boosted the economy in the eastern part of the state but largely ignored the western half; the tourism and service industry that created new jobs, but ones vastly inferior to the manufacturing jobs they replaced. (According to 2004 figures cited by Forrant, in Hampden County, manufacturing workers made, on average, $850 a week; workers in the service industry made $650.)

"I think the bigger forces in the end were always going to win," Forrant said. "The firms were always going to go. The loyalty to the greater Springfield area was gone.

"What could have made a difference was people being more honest about what this all meant while it was happening, and really trying to figure out what's going on next. People like [then-state Rep. and 2001 mayoral candidate] Paul Caron were saying, 'This is happening,' and people were saying, 'No, everything is fine; you're exaggerating.' There was a sense that talking about it made it worse."

What did, in fact, make things worse were revelations of deep public corruption over the past few years, including the convictions of a number of top city officials. "That just increased the cynicism in the city, that more than anything else," Forrant said. "Private investors say, 'Why would we go [to Springfield]? The guy we're dealing with could be in jail tomorrow.' It takes a long time to recover from something like that, in terms of private investor confidence."

There has been one dramatic government effort in recent years to save Springfield: the Finance Control Board, created by the state Legislature in 2004 to oversee municipal finances. The board brought along some welcome relief for the city in the form of a $52 million, zero-interest state loan. But it also brought along an agenda that has been damaging to the city, Forrant contends.

The board was created under inauspicious circumstances, especially from the viewpoint of the labor movement. Initially, then-Gov. Mitt Romney dangled the promise of a $20 million grant—not a loan that would have to be repaid. But Romney's offer came with a particularly harsh condition. As part of the deal, all collective bargaining agreements with municipal unions would be vacated. Romney's heavy-handed attempt at union-busting met with outrage from city workers and local organized labor and was rescinded.

But the bad blood between the city's unionized employees and the Control Board remained. The tension was thick as one union after another came before the board to negotiate their contracts. Perhaps the most contentious negotiations were with the teachers' union, which had been without a contract for several years. That lack of a contract, coupled with higher wages in neighboring systems, had resulted in a flood of teachers leaving the city schools.

Springfield had been hurt before by the weakening of labor unions, Forrant points out. The manufacturers that once drove the city's economy tended to be union shops, resulting in better wages and benefits for their employees; that, in turn, set the bar higher throughout the industry, even at non-union shops, where employers had to pay more to keep good workers from defecting. "In terms of a working-class standard of living, that had a huge impact," Forrant said. When the big union shops closed, that standard of living dropped dramatically.

Even without Romney's initial attempt to kneecap municipal unions, Forrant still questions the Control Board's agenda. "They were really sent in there to manage decline, not to try to figure out how to regrow Springfield," he said. "They were there to downsize the city, downsize services, and, in effect, lowered the quality of life for the residents of the city."

Many in Springfield maintain that the Control Board (along with Mayor Charlie Ryan, who worked closely with the board during his four years in office) has, in fact, been the city's savior, and that it succeeded admirably at its immediate charge: halting the city's downward spiral by stemming the financial bleeding and professionalizing key aspects of city management after years of neglect and corruption. Under the board, City Hall began producing balanced budgets, and built up significant financial reserves after years of mounting debt.

But Forrant says the board took an unadvisedly hard line when dealing with city workers and residents alike. Some argue that, in order to gain control over the budget, the board had no choice but to whittle down personnel costs, which account for almost three-quarters of the overall budget. But pressure on city employees, particularly teachers, damaged morale and "sapped what civic energy there could be," Forrant said. Another sore point was the board's creation of a new, $90-a-year trash fee; indeed, Domenic Sarno, Ryan's successor, ran on a promise to rescind the fee. (He broke that promise after being elected.)

"When it became evident that several generations of mayors had mismanaged the finances, and there were these clear budget shortfalls, something had to be done," Forrant said. "But setting it up in such a way—taking a pound of flesh from public employees; reducing services—it was set up from the beginning as a fight, and I don't think it had to be like that."

Forrant wrote his essay two years into the Control Board's tenure; since then, the board has changed both in composition and in direction. In 2007, newly elected Democratic governor Deval Patrick replaced the board's three gubernatorially appointed members with his own choices, including naming venture capitalist and one-time gubernatorial candidate Chris Gabrieli the board's chair, and adding an additional local member, James Morton, CEO of the Springfield YMCA. (The board also includes, by law, the mayor and City Council president.) Meanwhile, with the immediate budget crises kept at bay, the board has increasingly turned its focus to economic development. (See sidebar for an interview with David Panagore, Springfield's chief development officer.)

Forrant is still considering what these changes might mean for the city. "I read what they say they're going to do, but I can't really tell what's going on," he said. The changes made after Patrick's election indicate a response to the criticisms about the board, he said. "But the timing is horrible," he added. "How do you encourage people to invest in a city, a waterfront, new retail, condo developments, in an economy which is really just sapping capital out of the market?...

"I wish what people are trying to do now, they had tried several years ago, when Romney put the board in," Forrant said.

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So what can Springfield do to pull itself out of its economic slump? Sadly, it can't recreate the conditions of the past, when, Forrant said, "there used to be energy along the Connecticut River Valley." Today, neighboring communities to the north and south are also struggling with the loss of industry. "There's not an engine anymore," he said.

The region's focus on tourism and entertainment is not an adequate replacement, Forrant added. "I'm all for making things attractive and pleasant and drawing in new restaurants," he said. But these service industry jobs pay lower wages, and when the economy hits a downturn, like the one it's experiencing now, the disposable income people once had to spend on vacations and evenings out dries up. Forrant pointed, for example, to disappointing attendance figures at the Basketball Hall of Fame—the centerpiece of Springfield's riverfront revitalization efforts—which, he added, are unlikely to improve as gas prices continue to creep up.

The new federal courthouse on State Street and companion development in the neighborhood might stimulate some activity in that area. Still, Forrant noted, the relative quiet of Main Street—especially after office workers leave at 5 p.m.—underscores the difficulty of generating energy, including foot traffic, on the city streets.

The real challenge for Springfield, Forrant said, is to find a new engine for economic activity, the role the armory filled for so many years. "Now a 'new armory,' a new catalyst for sustainable prosperity, is required," he writes. "Fiscal belt-tightening, a long-term freeze on teachers' wages, and fanciful notions that tourist attractions will somehow grow a plentiful supply of well-paying jobs cannot arrest the city's and region's slump. The region is in danger of having its skilled labor base permanently eroded."

Finding that new engine is no easy task, Forrant acknowledges. Local colleges and universities should play a role, both as employers and as participants in economic development projects. The growth of medical research and related fields in the North End is a promising development that should create solid jobs, although the city's workforce will need to be trained with the skills required, said Forrant. In addition, he hopes to see the major players behind that development—Baystate Medical Center, UMass—build links with the local manufacturers that can support their work.

Indeed, Springfield still has tool shops and other manufacturers. The problem is, the employers often can't find workers with the necessary technical skills, which underscores the importance of updated workforce development in Springfield's recovery.

Labor unions can play an important role in that recovery, Forrant said, from worker training programs to efforts to improve wages and benefits in typically low-paying jobs. "I think the strategy now is to try to do everything possible to raise the wages of the growing population of workers in the caregiver sectors," he said. "You can't have people making so little and expect the area to be prosperous. We have to think about these jobs and what they're worth and pay them accordingly."

To move forward, the city also needs to move past the bitterness and apathy that has, to a large degree, dominated civic life in recent years. "We need a regime change," Forrant said. "But where is it going to come from? It looks so overwhelming. People might look at the problems and not want to even try it."

Forrant lays much of the blame on the creation of the Control Board, which assumed powers that once rested with the mayor and City Council. "It seems there's a lack of democratic process in the city," he said. "Part of the solution is to rebuild this sense of civic participation and try to heal the wounds in the city. &

"When you want to figure out a way to redevelop a place that's been hard hit, you want to create what economists call a 'virtuous circle of collaboration,'" Forrant said. By way of example, he points to efforts in Lowell to develop a large parcel of land where old textile mills once stood. "The city insisted on an open set of conversations over months for people to talk about what they want to see in the city," he said. "It's clear, as the project has been defined and redefined, that the input has really been used. It's not a fake. I'm pleasantly surprised and encouraged by it. This is something Springfield will definitely need to do."

Springfield could also use a new wave of leaders that truly speak for the residents, Forrant added. "It's a city of these neighborhoods, and certain neighborhoods are represented and some aren't. ...Somebody really needs to provide some leadership. I'm not a fan of a lot of presidential politics, but the city needs a version of Barack Obama—that leadership, optimism, energy."

With the Control Board scheduled to leave next summer, and ward representation coming to city government that fall, it's a crucial time for Springfield. "This would be the perfect time to say, 'Let's start as a city to think about ... what we want the city to be,'" Forrant said. "It's a perfect opportunity to stitch neighborhoods together, to stitch together a new vision for the city."

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