Pittsburgh and steel's lovechild - Gary, Indiana: Part 5

Nov 19, 2010

By Michael Puente, Changing Gears

All this week, Changing Gears has been looking at reinventing Pittsburgh. We recently heard how Detroit has borrowed some of its ideas. In its final report, they head to Gary to see if this smaller Steel Town can learn from its industrial mother, Pittsburgh. They found old habits are hard to break.

Pittsburgh and steel began a courtship in the late 1800s. That courtship would eventually produce a lovechild: Gary, Indiana. In the early 20th Century, Pittsburgh’s U.S. Steel Corporation began searching for a spot to build its new steel mill near Chicago. It found one on the southern shore of Lake Michigan in Indiana. The new mill employed thousands and helped the young city of Gary grow big and strong, but when those plentiful steel jobs began to dry up, both cities fell on hard times.

If you thought steel production was a thing of the past in Gary, think again. Smokestacks here release huge white plumes of steam showing there’s much life going on inside this plant, U.S. Steel’s largest on Lake Michigan. Here, more than 7 million net tons of raw steel are produced annually.

It once employed once employed 50,000 workers, including Jim Robinson. He began his career in steel more than 40 years ago.  

“If you didn’t go to college, if you didn’t go into a profession, you could always count on jobs being available at the mill,” said Robinson, now the district director for the United Steel Workers of America’s regional office in Gary.

“It used to be you could walk up to the employment office and they tried to talk you into starting in the afternoon. Certainly not true today.”

Over the past four decades, decline in demand for steel has hurt workers, leading to a blood-letting of layoffs. It accelerated folks moving out of Gary and blight to set in just about everywhere you can look. At last count, Gary’s population was down by about 80,000 people from the early 1960s to just over 100,000 today.

But mills here like U.S. Steel continue putting out tons of steel. They’re just doing it with far fewer workers. This plant now has only about 6,000 jobs. It’s still the city’s largest employer.

With numbers like that, you’d think this city would be ready to pull the plug on steel and find new employers as Pittsburgh has. Not yet, said Robinson.  

“Gary’s future is obviously not ever going to be decoupled from U.S. Steel simply because it’s a major part of the city and a major part of the city’s tax base," he said.

And, Pittsburgh’s move away from steel and toward areas like education and medical fields may not work here. “By definition, that doesn’t create an awful lot of work for people who aren’t teaching or in the healthcare field. They talk about retraining but the question is retraining for what? Last I checked we don’t have retraining funds to send people to medical school.”

Still, there are signs Gary is following Pittsburgh’s lead.

While it may not totally wean itself off steel, it is making efforts to reduce its dependence on it.

Ben Clement, whose job is to attract new firms to Gary, gave a tour of a vacant lot that soon will not be empty. Planned for this site is “a high technology data center which is going to house Fortune 500 companies and others wishing to store their data at a secure location,” Clement said. The $100 million investment will create more than 100 jobs.

“We definitely want to embrace our industrial past. However, from a business perspective, we have to recognize that attracting or luring clean industries and high technology is going to be important to Gary’s growth and our future,” he said.

Meanwhile, the mayor of Gary, Rudy Clay, says the city is committed to doing more with less and diversifying its economic portfolio.

The city has partnered with a Chicago firm to push along ideas to promote growth beyond industry. And, it’s getting much needed advice–and money–from the U.S. Department of Housing and Urban Development.

Clay says the city has its sights on expanding its little used regional airport and its beach front area, which is part of a national park. It wants to expand the local Indiana University campus, open a land-based casino, and, perhaps most surprisingly, increase tourism.

Gary is where Michael Jackson got his start. There’s a proposal to build a large museum in his honor near his boyhood home, but none of these ideas are to supplant U.S. Steel.

The company recently announced it plans to spend more than $200 million for a coke substitute plant in Gary, continuing its 100 year grip on the city. After all, it is named for U.S. Steel’s founding chairman, Elbert H. Gary.

“Nah, they’re not going anywhere,” he said. “I think we’re going to continue to be good cooperative partners with U.S. Steel. They will be here, and, we’ll just keep working them and just keep building the infrastructure and keep building our city and making sure that businesses continue to move in here and jobs, jobs, jobs for people here. We’re getting there.”

But, financial advisor Dean Kaplan says Gary must show it’s serious.

“All these things are very, very difficult because you’re talking about making a major sea change in how places are perceived and really leveraging their assets in way that may not have been done in a long time. The city has to show that it’s really committed to turning things around.”

But reinventing Gary, like Pittsburgh, will take years if not decades, and, Kaplan says the most important thing, like Pittsburgh, Gary needs to want to do it.