The Cities Main Street Feels the Pinch

Not long ago the bustling factory floor at the Black & Decker plant in Brockport, N.Y. (pop. 9,000), was the busiest spot in town. As many as 1,300 people worked there, making electric can openers and carving knives. Now a ghostly silence has fallen over the once humming machines. Black & Decker shifted much of the plant's production to other countries and suddenly closed the factory last Christmas. In one swift blow, Brockport lost its largest employer. About $4 million in severance pay has so far softened the impact on the community, but the money is fast running out. Says former Plant Manager Louis Reali: "If we don't get another company in here, the folks who used to work here are going to pack up and drift away. And then what have we got? Just an empty building and a town with no future."

Like Brockport, many towns and cities are suffering devastating setbacks as corporate America slims down. Of course, the purpose of restructuring is to make companies healthier and ensure their survival. The process can save thousands of jobs spread over many cities. But at the same time, inefficient and obsolete factories must often be shut down. In communities that have only a few dominant companies or industries, the consequences of such a plant closing can be wrenching. The impact ripples through every part of the society, from stores and schools to hospitals and the arts. Though towns hit by closings frequently attract new industry and grow healthier in the long run, the transitional phase is always stressful.

Flint, Mich. (pop. 144,000), some 50 miles north of Detroit, is a casualty of the foreign competition encircling American automakers. Nearly one-third of the work force in the area draws its pay from General Motors. But as part of a major reorganization plan, GM will close two Flint assembly plants this year and eliminate 10,000 local jobs by 1989. A study by the University of Michigan indicates that Flint's struggling service sector will not be able to create enough new jobs to make up for the GM cuts. Area unemployment, already 10%, is expected to rise to 13% by mid-1988. City Administrator Robert Collier says plant closings will depress local income tax revenues by about $1 million during the next year, while the school system will lose some $2 million in property taxes.

Restructuring can be almost a death notice for a one-company town. When New York City-based Phelps Dodge (1986 operating revenues: $846 million) decided to shut down its copper mine in Ajo, Ariz., in 1983 because of tough price competition from abroad, the community was transformed from a boomtown to a virtual ghost town overnight. More than 1,000 jobs disappeared with the closing of the mine, and Ajo's population dropped from 8,000 to 2,800. The town's hospital, which had been built by Phelps Dodge, closed for lack of use.