Tuesday, June 2, 2009

NCR

..is gone.

Symbolic, perhaps, of the end of Dayton's 20th century "company town" era. The final shutdown of Moraine Assembly was, too. NCR and GM, via Delco, later Delphi, dominated Dayton by their sheer scale and, in the case of NCR, the domineering figure of John Patterson.

Maybe not such a healthy thing, even though it brought a lot of jobs here in the 20th century.

Those jobs started to disappear in a very big way with the NCR manufacturing shutdown of the early 1970s, where up to 20,0oo jobs were eliminated. That was the start of 30 years of industrial shrinkage. NCR was the first mover, kicking off the era of decline, and now it's finally leaving for good.

It's tough to put lipstick on this pig.

One can say that its only 1,300 jobs. But these were fairly well-paying jobs that contributed city income tax to a cash-stripped municiple govenemnt. The larger impact was NCRs contribution to arts an charities, where the hurt will be felt by people without any connections to NCR and who don't live in the city. The DDN reports that NCR was the top contributor to the CultureWorks fundraising campaign for performing arts organizations. This is a big hit since the performing arts in this city hurting (witness the impending demise of the Dayton Ballet).

There is a lot of speculation why as well as the official story. These are all available by reading the Dayton Daily News or Atlanta Journal-Constition sites, or the local Buisness Journal sites.

It was probably not just the $60M offered by Georgia, though. The basic argument of lower taxes, lower personell costs, and a larger labor pool and air connections probably were deciders.

Executive Level Economic Development

One can read the various comments at the DDN site and Dayton Most Metro and Esrati and pick up how its all Rhine McLins fault. If one reads how this deal went down one notes the mayors of Atlanta, Duluth, Peachtree City, and the county officials for Gwinnett County (Duluth) were not involved. This was a deal done by the Georgia Governor Sonny Perdue and his economic develoment staff working directly with NCR CEO Nutti and his people. Local governements were apparently out of the picture.

The equivilant thing in Ohio would have been for Strickland to make this a priority working directly with NCR. No evidence this was happening and it might not have made a difference if Strickland did try something if Nuttis' mind was made up.

Reinventing Dayton

We are finally seeing the end of chapter in the economic life of Dayton. One constant in the economic history of this city is the constant reinvention of the local economy, almost a textbook case of Schumpeters creative destruction played out over time in a regional economy. Looking at the larger firms left here, only one, Reynolds & Reynolds, goes back to the 19th century. The other large IT firm, Lexis-Nexis, started as spinoff from R&D related to defense logistics and IT.

Interestingly enough this feature of local economic history was noted by a socialist, Joseph F. Sharts, in his Biography of Dayton. Sharts tells how entire industries rose and then faded away due to changes in the underlying economic forces. A process that is playing out into our time.

So we are closing the book on an era, which is now properly the subject of history.

10 comments:

metromark said...

Jeffrey - There are many factors involved here. Whether or not NCR made the right decision won't be known for years to come. The airport variable is a good one, but isn't it interesting that they never consulted Cincinnati as a possible hub for international connections? As I bring out in my DMM comment (http://www.daytonmostmetro.com/forum/index.php?topic=1177.30), I think they wanted to establish a production facility that was free of union entanglements. Georgia is not pro-union while Dayton has a strong union history. Just a thought.

Jefferey said...

The union issue is, no doubt, why they located their new ATM plant in Columbus...104 miles from Atlanta.

I don't think unions were relevant to locating their white collar staff to Peachtree City and Duluth, as this type of work is rarely unionized.

Peachtree City is only 15 minutes from Hartsfield, so it's a good locale for their training and customer service center.

The issue of Hartsfield vs Cincinnati would boil down to the frequency and destination of international flights.

Anonymous said...

Jeff,

I am a UD grad (not from Dayton or Ohio) and rememember the older NCR complex while in school then. It was in the late 70's and the downsizing had begun; most of the buildings were standing then, but vacant. Much has changed in Dayton since then.

Am sure the loss of NCR stings...along with IAMS...and GM...and Delco...and Emery...the USAir/Piedmont hub...and Rikes downtown etc.

I do know there are a lot of good, smart, people in Dayton. I also know that UD is rated very highly by everyone that takes the time to tour the school (as part of their 'where do you wanna go to school thing').

Seems to me that Dayton leaders should spend some time at UD and figure out how to partner with a private institution that does attract the 'brains' from places like the Northeast/Chicago and other non-Ohio regions and figure out how you can entice more of their graduates to stick around and/or build on the 'attractiveness that really is at UD'. (I know as have kids that really liked UD and know many more who also rated UD very highly).

While those leaders are 'at it' they should also figure out how to work with LexisNexis (and other area companies with scale/expertise) on a much more pro-active/creative scale. My guess is that Dayton leadership has no idea the things that LexisNexis could help them solve and at the same time engender/strengthen relationships with its current corporate citizens.

It may seem like "turn off the lights"...but it could also be the catalys to real change that can actually benefit the Dayton area.

Good luck!

PS The 'airport factor' for NCR is a red herring. Duluth, GA is 30 miles from ATL. In traffic (which is horrendous) DAY and CVG are easier to get to. Factor in where most of the domestic flying occurs (Northeast) and ATL is stupid choice. International does provide ATL advantage...BUT...if they are doing that much international travel...they have other issues. Think the other factors are also 'red herrings' probably best explained by the 'wizard of wall streets (aka silk shoe consulting firms)' who really have no idea what they are talking about because they only inhabit the space that is also inhabited by the handful of executives who also have no idea what the rest of the employees do, need or value.

"TheDonald" said...

I echo the sentiments and the viewpoint of @10:38 above, with the exception that I am a Dayton native and I have been around here since childhood to watch Dayton's industrial legacy wither away.

On one hand it fills me with anger - NCR was never hiring when I was on the market around here, and they are pulling the plug on a town that they helped build and then helped to destroy. So, IMO, they should not let the door hit the corporate a$$ on the way out.

Then there's outright fear of the future for Dayton. The BIG problem with the departure of these iconic businesses is that the whole infrastructure of business incubation is removed from the locality. What I mean is that while job growth in our economy is mainly at the small-company end, large companies operate as "incubators" of management and senior talent that later goes off and does things on their own.

That's why the IT and software development sectors (my own personal whipping boys) are so incredibly lame in this region - there are no Microsofts around here to train up engineers, and the best people tend to leave the area because the jobs are underpaid and limited in scope. Exactly the same applies to other kinds of business and other career tracks.

Basically, I see Dayton following approximately the path of Middletown to its south: declining real estate values, blight, empty shopping centers and factories, an ever increasing welfare dependent and section 8 population, and no freakin' jobs to speak of. There's little reason to relocate a company here if people won't move here and if the seasoned white and blue collar workforce moves away.

And I'm not even sure if the pro/anti union issue is that big a deal in this context. Large companies do these things for image, and a location in the "New South" sounds much more progressive and modern than a location in a former manufacturing hub. And perhaps the executive team just wanted to move south so they could play golf all year, too. Tech companies don't *like* dowdy, aging cities, like Dayton. NCR ain't Google but Google wouldn't be caught dead in "a" Dayton.

NCR is playing follow the leader. Screw 'em.

David Esrati said...

Jeff-
I didn't blame McLin.
I blame all government incentives for relocation with tax dollars and tax breaks.
Please, don't smear me with this idea that government has any control over sociopathic corporations- led by the new monarchy- CEOs.

Jefferey said...

"S The 'airport factor' for NCR is a red herring. Duluth, GA is 30 miles from ATL. In traffic (which is horrendous) DAY and CVG are easier to get to."

I was thinking more the Peachtree City location. But others..commenting from Atlanta.... have said the airport issue was not a real player.

BTW, for those interested, some good reader commentary at the Atlanta Journal-Constitution Biz Beat blog.

scartwr408 said...

There's one small irony that has gone unnoted. This story is being reported in the Dayton Daily News and the Atlanta Journal Constitution, both Cox newspapers. And where was Cox founded? Dayton, of course, but then it moved to Atlanta. Also note, the Dayton Daily News moved its printing plant out of Dayton and its headquarters out of downtown, because Dayton is so undesirable I guess.

NCR / Lexis Alum said...

Dear Governor Strickland,

May I suggest you head post-haste to 125 Park Avenue, Suite 2200
New York, NY. You're probably going to have to hang out in the lobby of LexisNexis headquarters if you want to meet with their top brass. It's not like they have anyone in Dayton these days except marketing people waiting their turn to get laid off and software engineers who are training their Indian replacements.

Don't forget your $30 million check, made out to Reed Elsevier.

NCR / Lexis Alum said...

Oh, Guv,
One more tip. Teradata's CEO lives in Atlanta--always has--since his days at NCR.

Send your development team to the annual Teradata user conference this fall. All the bigwigs are there, plus MANY major customers. The same huge retailers and airlines that made being in Georgia appealing to NCR.

I'm just sayin' Tell them you're all reporters from InformationWeek--you'll be able to get an audience with Koehler.

Good Luck.

"TheDonald" said...

Apropos of Lexis/NCR Alum's remarks, I found this:

http://tinyurl.com/lexisindia

Daytonians don't deserve jobs, no sir-ree, screw'em. :(