Large employers help cities keep good company

Most large Michigan cities owe their economic successes -- and downfalls -- to an astounding number of entrepreneurs who turned their businesses into major corporations.

Detroit was the Silicon Valley of its day, as Henry Ford and dozens of his competitors put America on wheels in the early 20th century.

Dr. William Upjohn founded the Upjohn Co. in Kalamazoo in 1886, helping to create a large pharmaceutical industry there.

Lansing owes it substantial auto manufacturing industry in large measure to Ransom E. Olds, who started the Oldsmobile division of General Motors Co. in Michigan’s capital in 1897.

Although Oldsmobile is defunct, Lansing is still home to much of GM’s Cadillac production.

Grand Rapids became known as "The Furniture City" because of the plethora of Dutch immigrants who established furniture-making operations there in the late 1800s.

Flint gained the nickname "Vehicle City" because it was a major producer of horse-drawn carriages in the 19th century. Later, Billy Durant, who also built carriages in Flint, incorporated GM there.

These are "company towns" in the sense that they owe much of their economic foundations to a handful of major corporations.

But "company town" also has a negative connotation, bringing to mind coal-mining towns where the mine owner controlled most, if not all, of the community’s businesses.

"I don’t like ‘company town’ at all," said Birgit Klohs, president of The Right Place Inc., an economic development agency in Grand Rapids.

"To me, that means one small community with one dominant employer and when the employer leaves, the town dies," she said. "That’s not Grand Rapids."

But Klohs and others acknowledge that there are a few major employers in each of their communities that have established a strong economic base from which they have grown.

Bridge profiled five of these partnerships: Battle Creek, Benton Harbor, Detroit, Grand Rapids and Midland.

Through turbulence, Whirlpool, Benton Harbor move on

Benton Harbor has endured a long, uneasy relationship with its dominant employer -- Whirlpool Corp., the world’s largest appliance manufacturer.

Many blame Whirlpool for the city’s severe economic decline as it moved thousands of good-paying factory jobs to southern states and Mexico over the past several decades.

And Benton Harbor is the poorest city in Michigan with average household income of $17,301 in 2010, compared to the state average of $48,432. An emergency manager has run the long-struggling city since 2010.

But Whirlpool has provided some much-needed positive economic news for the city in recent months.

In April, the company opened its $85 million Riverview Campus in downtown Benton Harbor. The campus replaces about 15 other area locations owned or leased by Whirlpool.

Ultimately about 1,100 of Whirlpool’s 4,000 employees in the Benton Harbor and St. Joseph area will work there.

Whirlpool also is relocating 180 refrigeration development jobs from Evansville, Ind. The company announced in August that it was closing its Evansville operation.

The appliance maker is Benton Harbor’s largest employer.The city’s next largest employer is retail giant Meijer Inc., with 450 workers.

"Whirlpool’s commitment is as strong now as it was 100 years ago when it was founded here," said Wendy Dant Chesser, president of the Cornerstone Alliance, a local economic development agency. "Some communities would long for that."

Lou Upton, his brother Frederick and uncle Emory founded the Upton Machine Co. to produce motor-driven wringer-washers in 1911. The company’s name was changed to Whirlpool in 1949.

Chesser said when Whirlpool acquired Maytag Corp. in 2006, the company received financial assistance offers from more than a dozen states and several countries to relocate its headquarters.

"They said, no, this is our home," she said.

Maytag’s headquarters in Iowa was absorbed into Whirlpool’s Benton Harbor headquarters.

Whirlpool’s highest-profile investment, though, also is its most controversial.

The planned $500 million Harbor Shores development, featuring a Jack Nicklaus Signature golf course, has been the subject of skeptical stories by the New York Times, the Rachel Maddow Show on MSNBC and other national media.

Some questioned whether the 530-acre development with plans for condos, two luxury hotels and a marina was really the answer to providing jobs to the city’s predominantly black, poor residents.

Others focused on the whether the development’s acquisition of part of a popular lakefront park was proper.

Chesser said the hope is that Harbor Shores will attract tourism-related investment that for decades has bypassed Benton Harbor for other cities along the Lake Michigan coast, including New Buffalo, South Haven and Saugatuck.

"This area was not getting that investment," she said.

Harbor Shores already has brought some positive attention to Benton Harbor. The course recently hosted the Senior PGA golf tournament in May.

Rick Haglund has had a distinguished career covering Michigan business, economics and government at newspapers throughout the state. Most recently, at Booth Newspapers he wrote a statewide business column and was one of only three such columnists in Michigan. He also covered the auto industry and Michigan’s economy extensively.

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Charles Richards
Thu, 09/06/2012 - 12:44pm
What was the point of this article? Listing a series of historical facts is not particularly useful.
Sun, 10/27/2013 - 8:55am
Useful to this foreigner living in michigan