Economy of Youngstown, Ohio

Steel boom

Founded by John Young in 1797 in the Connecticut Western Reserve section of the Northwest Territory, Youngstown spent the first half of the 19th century as a small village, dependent on mostly agricultural needs, until the beginning of the Second Industrial Revolution. The discovery of iron ore along the Mahoning River, however, would make the city a viable and logical place to manufacture steel. The city sits roughly in between Cleveland and Pittsburgh—steel manufacturers in their own right—and halfway between New York City and Chicago. Youngstown Sheet and Tube and Republic Steel were among the region's largest locally owned steel companies, while U.S. Steel also had major operations in the region.

Endowed with large deposits of coal and iron as well as "old growth" hardwood forests needed to produce charcoal, the Youngstown area eventually developed a thriving steel industry. The area's first blast furnace was established to the east of town in 1803 by James and Daniel Heaton. In time, the availability of fossil fuels contributed to the development of other coal-fired mills, including the Youngstown Rolling Mill Company, which was established in 1846. By the mid-19th century, Youngstown was the site of several iron industrial plants, notably David Tod's Brier Hill Iron & Coal Company. The iron industry continued to expand in the 1890s, despite the depletion of local natural resources. Numerous rail connections ensured a consistent supply of coal and iron ore from neighboring states.

At the turn of the 20th century, local industrialists began to convert to steel manufacturing, amid a wave of industrial consolidations that placed much of the Mahoning Valley's industry in the hands of national corporations. Shortly after the establishment of U.S. Steel in 1901, the corporate entity absorbed Youngstown's premier steel producer, the National Steel Company. One year earlier, a group of city investors had taken steps to ensure high levels of local ownership in the area's industrial sector. Led by local industrialists George D. Wick and James A. Campbell, they organized what became the Youngstown Sheet and Tube Company, among the nation's most important regional steel producers. The firm significantly expanded its operations in 1923, when it acquired plants in South Chicago and East Chicago, Indiana. This impulse to support local ownership surfaced again in 1931, when Campbell, as chairman of the Youngstown Sheet and Tube Company, attempted to merge the firm with Bethlehem Steel, in a bid to create the nation's second-largest steel corporation. Other area industrialists blocked the move, with the financial backing of Republic Steel founder Cyrus S. Eaton, who feared the implications of a strengthened Bethlehem Steel.

In the late 1930s, the community's steel sector gained national attention once again, when Youngstown became a site of the so-called "Little Steel Strike", an effort by the Steel Workers Organizing Committee, a precursor to United Steelworkers, to secure contract agreements with smaller steel companies. These firms included Republic Steel, Bethlehem Steel, Youngstown Sheet and Tube, National Steel, Inland Steel, and American Rolling Mills. Gus Hall, one of the committee's founding organizers, led strikes in Youngstown and Warren. On June 21, 1937, strike-related violence in Youngstown resulted in two deaths and 42 injuries. Despite violent episodes in Youngstown and Chicago, the Little Steel Strike proved to be a turning point in the history of the U.S. labor movement. Historian William Lawson observed that the strike transformed industrial unions from "basically local and ineffective organizations into all-encompassing, nationwide collective bargaining representatives of American workers".

In 1969, Youngstown Sheet and Tube merged with the New Orleans-based Lykes Corporation, and in 1979 the combined Lykes-Youngstown was bought by the conglomerate LTV. This brought decisions to the local economy out of the hands of the Youngstown area for the first time, although Republic Steel had moved to nearby Cleveland years earlier. LTV had discovered that the numerous mills in the area had not been upgraded in decades, and would not meet pollution regulations set forth by the United States government without an expensive upgrade. In addition, many steel manufacturers were outsourcing steel to developing nations, where the costs would be cheaper and with fewer pollution regulations.

Black Monday

Between the 1920s and 1960s, the city was known as an important industrial hub that featured the massive furnaces and foundries of such companies as Republic Steel and U.S. Steel. At the same time, Youngstown never became economically diversified, as did larger industrial cities such as Chicago, Pittsburgh, Akron, or Cleveland. Though population levels remained flat for a few more decades, population had not grown since the Great Depression, though General Motors had opened Lordstown Assembly in 1966 to help offset some losses. Hence, when economic changes forced the closure of plants throughout the 1970s, the city was left with few substantial economic alternatives. The 1969 corporate merger between the Youngstown Sheet and Tube Company and the New Orleans-based Lykes Corporation proved to be a turning point in the demise of the local steel industry. The merger and subsequent takeover of Youngstown Sheet and Tube burdened the community's primary steel producer with hundreds of thousands of dollars in debt. Further, the deal placed control of the company outside of the Mahoning Valley. The September 19, 1977, announcement of the closure of a large portion of Youngstown Sheet and Tube. Although federal laws now require employers to give 60 days notice to its employees if they plan on doing mass layoffs, the Worker Adjustment and Retraining Notification Act was still eleven years from going into effect at the time, and Youngstown Sheet and Tube instantly put 5,000 workers out of work. The day is still known locally as "Black Monday".

Youngstown Sheet and Tube's announcement had a ripple effect in the area. In 1979–1980, U.S. Steel pulled out of the Youngstown area and started scaling back its operations in Pittsburgh before eventually merging with Marathon Oil and filing with bankruptcy. In the mid-1980s, Republic Steel also filed for bankruptcy. Attempts to revive the local steel industry proved unsuccessful. Shortly after the closure of most of Youngstown Sheet and Tube's area operations, local religious leaders, steelworkers, and activists such as Staughton Lynd participated in a grassroots effort to purchase and refurbish one of the company's abandoned plants in neighboring Campbell, Ohio. This project met with failure in April 1979. The failure to reopen the mills led Youngstown State University professors Terry Buss and F. Stevens Redburn to conclude that the mill closings resulted from forces beyond the control of the community. Youngstown was simply just one piece of a national problem, and there was no way that Youngstown could solve this problem alone. In 1982, Staughton Lynd wrote about the effects of the mill closings in Youngstown in the book entitled The Fight Against Black Monday. In the wake of the steel plant shutdowns, the community lost an estimated 40,000 manufacturing jobs, 400 satellite businesses, $414 million in personal income, and from 33 to 75 percent of the school tax revenues. The Youngstown area has yet to fully recover from the loss of jobs in the steel sector.

The move had an effect on non-industrial businesses as well. Fast food chain Arby's, which at the time was beginning to make a national push, moved its corporate headquarters out of the Youngstown area. Idora Park, an amusement park in the area, suffered several fires before closing its doors in 1984. The Strouss department store would be consolidated into Kaufmann's by its parent company, May Department Stores, before its own consolidation into Macy's.

The city made attempts to attract another steel manufacturer, and even re-open Youngstown Sheet and Tube as a community-owned steel mill, but all these attempts failed. There have also been several instances of General Motors threatening to close Lordstown Assembly, especially after its 2009 bankruptcy. However, GM Lordstown remains open and is the area's largest industrial employer. Currently, Youngstown State University is the area's largest overall employer, a far cry from the city's industrial past. Even though the area was embarrassed by the collapse of the Phar-Mor chain, Entrepreneur named Youngstown one of the top 10 cities to start a business in 2009.

After Black Monday

The loss of industrial jobs has had a lasting impact in the Mahoning Valley region of Youngstown, as the city's population was cut in half as a result, while non-industrial businesses were forced to close or relocate due to the ripple effect of the loss of the steel industry. Although some other Rust Belt cities such as Pittsburgh have since successfully been able to diversify their economic base, as of December 2010, more than a generation after deindustrialization, Youngstown has not recovered. The deindustrialization of Youngstown has been well documented.

Alternate enterprises

A number of products and enterprises other than steel introduced in Youngstown during the manufacturing era became national household names. Among these is Youngstown-based Schwebel's Bakery, which was established in neighboring Campbell in the 20th century. The company now distributes bread products nationally. In the 1920s, Youngstown was the birthplace of the Good Humor brand of ice cream novelties, and the popular franchise of Handel's Homemade Ice Cream & Yogurt was established there in the 1940s. In the 1950s, the suburb of Boardman became the site of one of the country's first modern shopping plazas, which was established by Youngstown-born developer Edward J. DeBartolo, Sr. The fast-food chain, Arby's, opened the first of its restaurants in Boardman in 1964, and Arthur Treacher's Fish & Chips was headquartered in Youngstown in the late 1970s. More recently, the city's downtown hosted the corporate headquarters of the now-defunct pharmacy chain store Phar-Mor, which was established by Youngstown native Mickey Monus.

The blow dealt to the community's industrial economy in the 1970s had been slightly mitigated by the presence of auto production plants in the metropolitan area. In the late 1980s, the Avanti, an automobile with a fiberglass body originally designed by Studebaker to compete with the Corvette, was manufactured in an industrial complex on Youngstown's Albert Street. This company moved away after just a few years. A mainstay, though, of Youngstown's industrial economy has long been the GM Lordstown plant. The General Motors' Lordstown Assembly plant is the largest industrial employer in the area. One of the nation's largest auto plants in terms of square feet, the Lordstown facility was home to production of the Chevrolet Impala, Vega, and Cavalier. Recently expanded and retooled with a new paint facility, it is the current home of the Cavalier's successor, the 2011 Chevrolet Cruze.

Downtown Youngstown has seen modest levels of new construction. Recent additions include the George Voinovich Government Center and state and federal courthouses: the Seventh District Court of Appeals and the Nathaniel R. Jones Federal Building and U.S. Courthouse. The latter features an award-winning design by the architectural firm, Robert A. M. Stern Architects. Youngstown's downtown is a site of new business growth. The Youngstown Business Incubator, located in the heart of the downtown, houses several start-up technology companies, which have received office space, furnishings, and access to utilities. Some companies supported by the incubator have earned recognition, and a few are starting to outgrow their current space. One such company–Turning Technologies–has been rated by Inc. Magazine as the fastest-growing privately held software company in the United States and 18th fastest-growing privately held company overall. In an effort to retain companies downtown, the incubator secured approval to demolish a row of vacant buildings nearby to clear space for expansion. The project will be funded by a $2 million federal grant awarded in 2006. In 2005, Federal Street, a major downtown thoroughfare that was closed off to create a pedestrian-oriented plaza, was reopened to through traffic. The downtown area has also seen the razing of structurally unsound buildings and the expansion or restoration of others.

New construction has dovetailed with efforts to cultivate business growth. One of the area's more successful business ventures in recent years has been the Youngstown Business Incubator. This nonprofit organization, based in a former downtown department store building, fosters the growth of fledgling technology-based companies. The incubator, which boasts more than a dozen business tenants, has recently completed construction on the Taft Technology Center, where some of its largest tenants will locate their offices.

Reversing the trend, in 2010, Vallourec & Mannesman broke ground for a $620 million-dollar pipe mill north of its existing business V&M Star. Production of steel pipes began in October 2012. The facility is 1 million square feet in area and produces tube goods to service natural gas exploration in the Marcellus Formation, which is the largest gas field discovered in the past decade, estimated to provide enough natural gas to supply the United States for 100 years.

In 2010, Vallourec and Mannesman Tubes broke ground for a $620 million-dollar pipe mill north of its existing business V&M Star, at the site of the former Youngstown Sheet and Tube company. Opened in 2012, the facility is 1 million square feet (93,000 m²) in area and produces tube goods to service natural gas exploration in the Marcellus Formation, and currently employs 350 people.

Remaining steel operations

Youngstown is the site of several steel and metalworking operations, though nothing on the scale seen during the "glory days" of the "Steel Valley". The largest employer in the city is Youngstown State University (YSU), an urban public campus that serves about 15,000 students, located just north of downtown.

The largest industrial employers within the Youngstown city limits are Vallourec Star Steel Company (formerly North Star Steel), in the Brier Hill district, and Exal Corporation on Poland Avenue. The latter has recently expanded its operations.

Defunct retail and amusement sectors

Several of the city's recreational resources disappeared amid the economic hardships that began in the late 1970s. Among these was Idora Park, an amusement park that served as a convenient alternative for residents who preferred not to travel to larger parks in Northern Ohio and Western Pennsylvania. (These included Conneaut Lake Park in Conneaut Lake, Pennsylvania, Geauga Lake in Aurora, Ohio, Cedar Point in Sandusky, Ohio, and Kennywood in Pittsburgh, Pennsylvania.) The park, which closed in 1984, held sentimental value for many local residents and enjoyed a degree of historical significance. Former Youngstown resident Jack L. Warner noted in his autobiography that the Warner brothers took their first step into the movie business when they screened a used copy of The Great Train Robbery at Idora Park and other local venues.

From the early 20th century to the mid-1970s, Youngstown was the retail center of the Mahoning Valley. There were two flagship department stores in the downtown area, including Strouss Hirshberg's (later absorbed by Kaufmann's, now part of Macy's) and McKelvey's (later Higbee's, now part of Dillard's). Specialty shops lined the main artery of West Federal Street, and the district had four upscale movie theaters, including the Palace Theater, the Warner Brothers' first Theater, the State Theater, and the Paramount Theater. These businesses were the first to close as a result of declining attendance in the 1950s, 1960s, and 1970s. In the early 1970s, the appearance of two suburban malls (the Southern Park Mall, in Boardman, and the Eastwood Mall, in Niles) hastened the closure or relocation of many businesses that remained. The collapse of the community's steel industry at the end of the decade created additional challenges for downtown business owners, and throughout the 1980s and 1990s, efforts to revive the former retail hub were unsuccessful.

"Youngstown 2010" project

In the 2000s, residents and city planners became motivated to change the city's course, eventually producing the "Youngstown 2010" project. This project is also colloquially referred to as "The Greening of Youngstown" due to the large scale demolition of dilapidated structures in favor of green space and the expansion of public parks.

"The City of Youngstown is operating under a comprehensive plan that was formulated over a four year period in the early 1950s. The plan was reviewed and updated with two additional volumes in 1974. These plans were for a different era that anticipated a population of between 200,000 and 250,000. The Youngstown 2010 Plan is based on a new vision for the new reality that accepts we are a smaller city that will stabilize at 80,000 people."

Major Vision Principles of Youngstown 2010 include:

1. Accepting that Youngstown is a smaller city.
2. Defining Youngstown's role in the new regional economy.
3. Improving Youngstown's image and enhancing quality of life.
4. A call to action

Besides embracing downsizing and green space expansion, the plan focuses strongly on attracting more diverse businesses. This has resulted in the city gaining international recognition for addressing the negative consequences of deindustrialization, which are common across the world.