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Political election post-mortems have the usefulness of a divining rod in search of water. Media commentators were shocked, shocked last week to discover Democrats’ lack of appeal in small town and rural America. Huh?

                In the 1960s small town Ohio of our youth, Democrats had zero chance to win local elections. That reality is as old as the Volstead Act.[1] The reasons for it today are fresh, however. In the words of a Brookings Institution report,

Jobs in blue America disproportionately rely on national R&D investment, technology leadership, and services exports. By contrast, [in red America] prosperity remains out of reach for many . . . . This is not a scenario for economic consensus or achievement.[2]

As if to prove the generalization, former United Steelworkers official and mayor of Monessen, Pennsylvania, Lou Mavrakis in 2016 invited candidate Donald Trump to visit. Fellow Democrats objected. Mavrakis responded, “Whenever you’re desperate, you ain’t got no place to go, you take your chances. I want to get something for the people I represent and for my city that I love. Just some glimmer of hope, that’s all I want.”

The quoted Brookings report notes President Biden won just one-sixth of the nation’s counties, but those counties represent 71% of the nation’s GDP.[3] That is a problem—for all of us.

Manufacturing employment’s peak year was 1975. The knowledge economy’s birth year was 1946, when ENIAC debuted at the University of Pennsylvania. Which is to say the dichotomy identified by Brookings has deep roots that defy simple solutions.

So how do we create “economic consensus and achievement” that serves the whole nation? Manufacturing’s rise to economic primacy offers clues.

  1. As Industries Grow, They Spread Out. Pittsburgh became the center of the steel industry because natural resources were handy or could be brought here efficiently. Coal, natural gas and rivers were nearby. Ore from the Iron Range could be shipped across the Great Lakes and moved by rail from Conneaut, Ohio, to Monessen and similar Mon Valley communities.

As the industry matured, it diversified production and distribution to reflect localized demand for products, new product development, resource availability, and national security objectives. Alabama, Indiana, Ohio, Detroit, St. Louis, California, Utah, Philadelphia and Baltimore all became important steel production centers as a result. Today one can add to the list North Carolina, Arkansas, Texas and Mississippi.

The auto industry evolved in the same way. Detroit was headquarters; but the Big Three built plants in a majority of states. The companies thereby served customers where they lived and worked, diversified risks and attained political influence in those locales and in Washington.

Google today is following the same playbook. It now operates data centers in 14 locations spread across the nation. All centers are situated in rural areas where land is inexpensive, workers are disinclined to unionize and the Google payroll has an outsized local impact, inclining political office holders to do the company’s bidding. The company’s recently announced exurban Columbus, Ohio, location is its first one east of the Mississippi and north of the Mason Dixon Line.

The data centers’ need for hundreds of millions of gallons of water a year to cool them has made residents of Western U.S. locations increasingly less welcoming.[4] So the Great Lakes beckon as a region where plentiful water and human resources can meet the needs of Google and similar technology companies.

Manufacturing’s growth again is a useful reference. Before WW II, Ford Motor Company built a water tunnel three miles long and 15 feet in diameter under the streets of Detroit to bring water from the Detroit River to Ford’s 1,100 acre Rouge Complex. The Rouge then employed 85,000 people. The water tunnel fed 600 million gallons of water a day to run the in-house power plant and steel mills that served the world’s largest industrial complex.[5] Google data centers’ water requirements pale by comparison.

  1. International Relations Shape Facility Locations. In July 1942, a German submarine landed saboteurs at Jacksonville, Florida, with munitions and instructions to blow up ALCOA operations in Illinois, Ohio and New York. The saboteurs were soon captured. The company erected anti-aircraft machine gun emplacements on the roof of its New Kensington, Pennsylvania, R&D center. Also constructed were tunnels to the Allegheny River to evacuate ALCOA engineers if need be. To increase aluminum production tenfold for the war effort, the federal government paid ALCOA to build and operate a series of aluminum smelters widely dispersed throughout the nation.

During the aughts, as Renaissance Partners, we met with officials in charge of the DuBois (Pennsylvania) Regional Airport. Their facility was first class, they owned many adjacent acres of undeveloped property, but they struggled to identify potential users. We pointed out the airport was an hour or less by air from five of the twelve Federal Reserve banks, making it an ideal location for a remote site to be used in emergencies or even in the day-to-day operation of the nation’s financial system.

  1. Politics Can Work for Communities of all Sizes. To prevent manufacturing plant closures and job losses at Standard Steel (Mifflin County, PA), C/G Electrodes (Elk County, PA), Brockway Pressed Metals (Jefferson County, PA), Horsehead Industries (Beaver County, PA), American Alloys (Mason County, WV) and many other businesses, Renaissance Partners has often enlisted federal and state elected officials’ assistance. They have uniformly been active and helpful participants in our projects. A television advertisement from Sen. Arlen Specter’s last reelection campaign featured him in standing on the plant floor at C/G Electrodes in Saint Marys, Pennsylvania with the facility running at full production behind him. He was proud to have helped his constituents, and justly so.

 

                The pandemic and its effects have taught us we can and must rebalance our economy to recapture industrial capacity we have exported to low-wage economies. Only a shared sense of purpose will allow us to do that. Achievement will follow.

 

[1] Okrent, Daniel, Last Call: The Rise and Fall of Prohibition (2010). Okrent’s history of Prohibition is a fascinating account of the movement’s birth among Midwesterners fearful of the growing political influence of cities teeming with Eastern and Southern European immigrants, Southerners intent on reinforcing Jim Crow strictures, and educated, civic-minded, newly-enfranchised women committed to helping working class women escape the destructive effect on families of drunkenness and alcoholism among working class men. The same women were the first to call out the failure of Prohibition and mobilize to repeal it. During Prohibition’s heyday, though, the movement’s leaders held as much political sway over both parties as Trump backers did during his presidency.

[2] www. Brookings.edu/blog/the-avenue/2020/11/09.

[3] “Just 31 counties, or the top 1% by share, made up 32.3% of U.S. gross domestic product in 2018 . . . . That's despite these counties only having 26.1% of employed Americans and 21.9% of the population last year.” https://www.bloomberg.com/graphics/2019-us-gdp-concentration-counties/ (citing data published by the federal Bureau of Economic Analysis).

[4] https://www.ny1.com/nyc/all-boroughs/ap-online/2021/10/22/big-tech-data-centers-spark-worry-over-scarce-western-water. See also https://www.bloomberg.com/news/features/2020-04-01/how-much-water-do-google-data-centers-use-billions-of-gallons.

[5] Dulmage, William W. “THE RAW WATER SUPPLY OF THE FORD MOTOR COMPANY.” Journal (American Water Works Association) 30, no. 1 (1938): 67–77. http://www.jstor.org/stable/41231945.

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