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What’s a company town to do when the company leaves town?


Written by Shay Maunz

When we think today of company towns—those communities whose economies rely almost entirely on one big business or industry—the prototype we come up with is invariably not modern. We think of the town of Spruce, with its rows of identical clapboard houses, which was so reliant on logging and the railroad that there were no roads into town; everything came and went by train. Or Coalwood, setting for Homer Hickam’s book Rocket Boys, which was founded in 1905 when George Carter discovered rich seams of coal and quickly bought up some 20,000 acres, then built a mine, school, church, and store along with offices and houses, all in one fell swoop. Or Thurmond, in Fayette County, where almost all of the level land is consumed by the railroad’s tracks and station; the town was almost an afterthought, built up on the hills surrounding the depot.

Courtesy of West Virginia State Archives Carol DeHaven Collection
Courtesy of West Virginia State Archives Carol DeHaven Collection

Town_Focus

All those old company towns are also, invariably, ghost towns today. After the mill in Spruce closed in 1925, the town quickly declined and was eventually abandoned. Coalwood’s population peaked at more than 2,000 in the 1960s, but by 1990 less than 900 people lived there; that was the last time the Census Bureau bothered to count it as a place all its own. As of 2010, only five people still lived in Thurmond.

But does it have to be that way? Are all company towns destined to become ghost towns when the company leaves or shuts down?

The answer to that question matters a lot, because company towns aren’t just places where the houses all look the same and all the kids get their checkups from a doctor hired by the boss—and they’re not just relegated to history books. Think of Ravenswood, where the Century Aluminum plant was idled in 2009, putting some 650 people out of work. Ravenswood isn’t going to be abandoned any time soon, but the closure of that plant was a big deal for the community. Or think of McDowell County where, for part of the 20th century, the US Steel Corporation coal mining and processing sites were some of the most advanced in the world. When US Steel abruptly closed its operations there in 1986, 1,200 people found themselves jobless, and personal income in the county decreased by two-thirds that year. The most recent entry on the log might be Montgomery, in Fayette County, which is set to lose its major economic driver when West Virginia University Institute of Technology moves to Beckley in 2017.

In the last 20 years, more than 200 of West Virginia’s post offices have been shut down. Sure, these haven’t been great times for United States Postal Service, but that figure also hints at another problem: Communities are disappearing. “It’s happening all over the country,” says Don Macke, cofounder of the Center for Rural Entrepreneurship, a national nonprofit that works to reinvigorate local economies. “If you think about the economy in general, all over the country we’ve gone through these massive structural changes. In North Carolina it’s textile and furniture plant closures, in Nevada the gaming industry took a hit, in your part of the country it’s coal closures. When you have these kinds of economies that are deeply reliant on one major employer or economic sector, it’s a major risk.”

These days, the tragedy of a company town isn’t that you go broke buying groceries from the company store with company-issued scrip. It’s that the fate of an entire community can be decided by faceless people miles away, insulated from the pain of their decision.

“A Dagger in Our Hearts”

For nearly six decades in Ravenswood, Century Aluminum was king. “I didn’t realize it when I was young how good we had it, how good the economy was when all those good jobs were there in town,” says Josh Miller, who grew up in the area. “But I can definitely see it now.” The aluminum smelter in Ravenswood was built in 1957 and could process 170,000 tons of aluminum each year. Over decades, many thousands of West Virginians worked there—they were good, solid, union jobs. “Everyone in town felt lucky if they could get a job at Century,” says Senator Mitch Carmichael, who grew up in the area and represents Ravenswood in the Legislature. “I would have been lucky to get a job there myself.”

Courtesy of West Virginia State Archives Carol DeHaven Collection
Courtesy of West Virginia State Archives Carol DeHaven Collection

Montgomery7_PhotobyShayMaunz

But in February 2009, Century idled the Ravenswood plant, putting 650 people out of work. “For the people in Ravenswood, it was a dagger in our hearts,” Miller says. The next several years saw a messy battle between former employees in Ravenswood and the corporate set at Century—the company announced that it would no longer pay for retirees’ health insurance, and those employees picketed, protested, and fought the decision in court. All the while, locals held out hope the plant might reopen, and officials worked diligently to convince Century to do so—state lawmakers even passed bills providing tax breaks and new utility rate structures for the plant. But that hope was dashed last summer when Century announced it would close the Ravenswood plant for good. Governor Earl Ray Tomblin’s public statement on that news expressed desperation—he went so far as to ask the company to reconsider the decision. “We try to stay optimistic, but when you see all those ‘For Sale’ and foreclosure signs, it’s hard,” Miller says. “Losing jobs like that creates a domino effect. You don’t see it right away, but as time goes on and you lose that money flow into the economy, things get hard.” In January 2008, the unemployment rate in Ravenswood was 5.8 percent. By January 2010 it had jumped to 13.6 percent.

Montgomery is already bracing itself for tough times to come when WVU Tech pulls out in 2017—just another company deserting its town, some would say. Of course, the story of Montgomery is more complex, and it might not be fair to describe Montgomery as a town that lives and dies by the university’s hand. Montgomery’s economy has been limping along for years now, ever since coal mines in the area started closing. The town has hung on, as towns do, with the help of WVU and the hearty optimism of its citizens. But even to them, the loss of Tech feels a bit like the last straw.

“Tech’s been here so long it’s like a permanent fixture,” says Chad Vickers, the manager at Not Frank’s, one of the pizza joints in town. “Without it, it’s going to be a ghost town. You know that town Thurmond? That’s what it’s going to be like. Nothing left.” Sam Wilson has lived in Montgomery for 69 years—his entire life—and has watched its slow decline. “It used to be that on the weekends you couldn’t walk through downtown Montgomery, it was shoulder-to-shoulder people. You couldn’t find a building to rent if you wanted one,” he says. “Now there are more and more vacant buildings and lots.” Without Tech he expects Montgomery will be a lot like it is now, “only deader—more dead.”

Here’s the thing about WVU pulling Tech out of Montgomery, though: The university is doing it slowly, deliberately, to give the city time to cope. When WVU’s Board of Governors approved the decision in September, there were still two years to go before Tech left town. So in a way, the people of Montgomery have been granted a grace period, some time to clear their heads and plan the way forward. “Montgomery has been the home of WVU Tech for a very long time,” says WVU President Gordon Gee. “But I believe there is an identity and future for Montgomery beyond being the home of an institution. In staying with our long tradition of community development, WVU is committed to deploying university resources to develop a new vision for Montgomery and the Upper Kanawha that is fueled by innovation and implemented with care.”

Still, Montgomery is left with one simple question: What do we do?

What to Do?

Here’s a thought experiment for you: A widget factory has been in operation in the same town of 1,000 people for 50 years, and employs 100 people. When the factory suddenly goes out of business, what’s the best way for the town to create new jobs for those 100 citizens?

A) Recruit a new factory that will employ 100 people.

B) Start 10 new companies that will each employ 10 people.

Option A tends to be the gut reaction. We see the huge gap left by that big company—all our neighbors who are out of work, the empty facility that used to be bustling with energy, the small businesses that catered to the company’s workers—and assume the only thing big enough to take its place is another major company or industry. And you know what? Sometimes that works, and it works in a great way. When the steel industry faded, Pittsburgh was able to reinvent itself as a robotics center. Cleveland is becoming known for biotechnology.

Or just look at Huntsville, Alabama. The story of Huntsville is a story of reinvention—it has redefined itself time and time again, remaining viable even as its defining industries have come and gone. In the early 1940s, Huntsville was just a quiet town of around 13,000 people. But when World War II broke out, the federal government selected a plot of land adjacent to Huntsville to build massive chemical munitions facilities—personnel numbered near 20,000—and the city burgeoned. When the war ended there was no need for those chemical munitions operations, but the city was able to attract another tenant to those facilities: The U.S. Army moved in and used them for rocket and missile development. Huntsville has been known as “Rocket City” every since.

Over the years, Huntsville’s fortunes have waxed and waned along with federal space and defense funding—up to a point. That’s because Huntsville has gotten really, really good at leveraging its assets to attract more big employers to the city. “It’s all about eliminating risk and being able to deliver a building quickly and having the workforce to attract employers,” says Harrison Diamond, business relations officer for the city of Huntsville. “These companies hate risk, so it’s about making sure there’s as little risk as possible.” When a company does leave town it usually leaves a lot behind—assets that could attract new businesses in the future. A trained, disciplined workforce. A state-of-the-art facility. A welcoming population. “People look at layoffs as a bad thing, and they are for the individual,” Diamond says. “But at the same time that creates new opportunities.”

thurmond-IMG_3439Often, the problem for West Virginia is one of scale. In our Widget Town, for example, that workforce of 100 might not be large enough to attract a big company—say, one that needs 200 people to build gizmos. There’s an even bigger problem if Widget Town isn’t near another city where more potential workers might live, if it’s not easily accessible by plane, train, or interstate, or if the city doesn’t boast the kind of quality of life that would entice people to move there for a job. If Widget Town is small, rural, and kind of run down, it might be tough for city officials to attract a big shiny new business. “Having a smaller community does hurt you because of your potential available labor pool,” Diamond says.

And in that case, you move on to Option B: Start 10 new companies that each employ 10 people. “Diversity is really important because you just don’t know when you’re going to get whacked on the head with these large employers,” Macke says. “I’m not saying large employers aren’t important. But when small businesses grow they’re bringing income in and selling outside the local economy—what the big employers used to do—but instead of that being concentrated with companies who are employing a whole lot of people, it’s spread around.”

Courtesy of West Virginia State Archives Collection
Courtesy of West Virginia State Archives Collection

Sometimes it seems like diversification is a dirty word in West Virginia, because it can seem to imply that we’re rejecting big businesses or heavy industry—or at least giving up on the idea. But it doesn’t have to be that way. “I would love to attract a new company to that facility in Ravenswood, that would be the number one thing,” Senator Carmichael says. “But in the meantime we need to look at what else we can do.” Big business and small business can work in tandem, and we can work on promoting local entrepreneurs even as we try to lure a big company into town. In fact, experts say that a vibrant small business community makes a city more attractive to big employers.

Courtesy of West Virginia State Archives Collection
Courtesy of West Virginia State Archives Collection

The answer, then, might just be to invest in local entrepreneurs and small businesses. For city officials, that might mean looking at zoning ordinances to see if certain parts of town—especially those that are walkable and boast historic architecture—might be put to better use if they were friendlier to commercial pursuits. Could zoning be used to boost the density of downtown, or to offer up more housing near downtown, to lure people there? For any big businesses that remain and have vested interests in the community—think locally owned banks, hospitals, or education centers—it means partnering with or funding locals who are interested in building sustainable businesses.

And for the people who live in these communities, it means rolling up their sleeves and getting to work—and getting creative. Macke likes to tell the story of a woman who owns a flower and gift shop in Marysville, Kansas, a little community of around 3,000 people. At one time Marysville was in the middle of a county that had 1,000 farms, but now there are only a couple hundred. “It’s tough, living in Marysville, to make a living selling flowers and gifts,” Macke says. So this florist started a little side business, selling flags through her website, and it became hugely successful. Macke says she’s now one of the largest suppliers of flags in Europe. “The Internet has really created an international marketplace. You can live anywhere and sell anywhere and that’s good for rural communities,” Macke says. “That’s the kind of things people do when they are a little bit desperate.”

It’s already happening in Montgomery. Robert Pennington owns a NAPA Auto Parts store in town, and even though college kids don’t do much shopping for auto parts—“They come into town, take their courses, and leave,” Pennington says—he expects that Tech’s exit will have some impact on the business. To cope, he figures he’ll expand the area the business covers to bring in a wider customer base. “We just plan to work harder,” he says.

“If you think about people, when an individual is put into crisis, some people simply shut down and tune out, because it’s just too overwhelming. Other people find the internal resilience and energy to say, ‘I’m going to fight back. I’m going to fight for a future,” Macke says. “And I see this in communities as well. Some communities when they get hit by a loss, they can’t find the vision or the energy to respond, and so they simply accept the decline and it gets worse and worse until it disappears. Or until somebody with vision comes along.”

3 comments

My husband and I left West Virginia in 1986 due to his job transfer to Tennessee. After twelve years in Tennessee, another transfer took us to Georgia where we stayed after he retired in 2008. Like many Mountaineers, we considered the option of returning to our home state but found that it made better financial sense to stay put. Have any efforts or incentives been created to attract people whose income comes from pensions and retirement assets?

A shame having been raised in that area but good for Beckley I guess. Seen the same senario in Mich. small towns from factory shutdowns.

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