Local Ownership and Hamilton's Economy

Opinion

Local Ownership and Hamilton's Economy

Ultimately, only locally-based businesses with roots in the community will provide the benefits we wish to see from commerce and trade.

By Undustrial
Published February 10, 2011

Hamilton's vanishing employers are no secret. The trend has been noted nearly everywhere and blamed on anything and everyone. The consequences are clear and devastating: unemployment, poverty, derelict buildings and toxic brownfields, a shrinking tax base and shift to low-wage service sector or public sector employment.

As a town once renowned as a leader in industry, we spend far too much time trying to avoid an image as the new Canadian rust belt.

This trend stretches back at least as far as the establishment of NAFTA. Some plants have been bought out and seen production move to foreign nations where production is cheaper. Others have simply seen local relocations to nearby highway-side office parks.

Some have buckled under intense competition, and others simply lived under years of threats that the plant will "move to Mexico".

There is nothing healthy about this arrangement economically, and simply chasing more business, development or investment isn't going to turn it around. These problems require a basic reevaluation of our business strategies as a city.

Globalization touches every aspect of economic life in Hamilton. While our manufacturers have left town under fierce competition from low wages and absent regulations, our retailers too have been struggling to compete with their products.

Big-box stores at suburban shopping centres like Meadowlands have been devastating inner-city small businesses for years, and both of these factors need to be seen as prime drivers of the "decay" of inner-city Hamilton.

The poverty, unemployment and underemployment endemic in these same communities also isn't helping our "image" or economy.

Stelco

A few decades ago, the thought of Stelco closing would have seemed apocalyptic. Today, it seems almost inevitable. After underfunding pensions as well as a number of poor market choices, Stelco filed for bankruptcy in 2004, leading several years later to their buyout by US Steel.

Created in the 'Robber Baron' days of American capitalism from a merger between Andrew Carnegie and JP Morgan, US steel is now one of the world's largest steel corporations. Since they purchased Stelco in 2007, they first laid off 700 workers, then idled the Hamilton works for a large chunk of 2009.

At their Lake Erie facilities, US Steel locked out workers over contract negotiations - particularly the issue of pensions, and have now idled the Hamilton works once again in a very similar lockout.

We, as a city, need to face the fact that many of the corporations who claim a desire to invest in Hamilton are really far more interested in eliminating competition and consolidating control over regional markets.

Whether it's big retail chains like Wal-Mart or Chapters with a track record of over-saturating markets to drive small businesses out, or large media and production chains, this is not producing more options for us in any real way - not as consumers, workers, entrepreneurs or involved citizens.

Lakeport

Facing bankruptcy at the end of the 1990s, Lakeport Brewing turned to Teresa Cascioli, and under her watch saw one of the most dramatic turnarounds in recent Canadian beer history. Their "buck-a-beer" campaign was vastly successful. Going from around 1% of the Ontario beer market in 2002 to having two of the province's top-selling beers in 2006, they quickly attracted attention from major beer corporations.

In 2007, Cascioli sold the breweries to Labatt, owned by Anheuser-Busch InBev, the world's largest beer corporation, and last year shuttered the plant, laying off 143 union workers.

The closure of Lakeport's Burlington Street brewery marks the end of commercial brewing in Hamilton, and the company has stripped essential equipment from the plant so that the location cannot again be used for brewing, despite offers.

Different Molds

The companies responsible for this don't all fit the same mold. Many are the typical multinational conglomerates we so often hear about, but Canadian corporations (especially in fields like media) play a large role too.

Given the history of poor choices and mismanagement at many of these plants by relatively local ownership (i.e. Stelco), it's clear that having a Hamiltonian in the driver's seat doesn't equate to a broader responsibility to Hamiltonians.

Still, as much as we all love to hate local businesspeople like Bob Young, he's not located in Pittsburgh. While this crisis could not have happened without the vacuum left by many poor local decisions - embracing distant centres of power will not gain us any of the input we have so far sorely lacked.

Conglomerate Media

CHCH, a one time a CBC affiliate, has changed ownership many times over the years, but was most recently known for major changes under the recent tenure of communications giant Canwest communications.

After years of repeated attempts at re-branding and an exodus of familiar personalities like Connie Smith and Dan McLean, Canwest recently sold the station to independent Channel Zero after fears that it would shut down.

The Spectator was the first paper of William Southam's newspaper chain, founded over a century ago. In 1998, though, it was bought out by Conrad Black (original publisher of the National Post), sold to Sun Media and then to Torstar within a year.

Today it is still owned by Metroland, a Torstar subsidiary that publishes over a hundred newspapers across Southern Ontario. Like CH, the Spec has recently witnessed an exodus of veteran reporters and editors.

Branch Plant Economics

Far too many of our city's economic hopes and dreams rest on old-school branch-plant economics. We need to look honestly at 21st century conditions and admit that big corporate industry isn't interested in locating anywhere which could be described as "first world" and "inner city".

Pinning hopes for urban revitalization on companies who are willing, at best, to locate on nearby greenfields at enormous public expense (i.e. Aerotropolis), is lunacy.

At the same time, abandoning production in favour of only construction and service-sector employment will only ensure us a place as yet another bedroom community in the GTA.

'Chasing Business Away'

A few years ago, plans to build a new Maple Leaf Pork plant out in Glanbrook were halted by concerns from neighbours, amidst a storm of controversy. At the time, many decried the move claiming it amounted to "chasing business away from Hamilton".

In more recent years, though, after a nation-wide tainted meat scandal, Maple Leaf has pulled out of nearby Burlington.

"Ownership", in a legal sense, conveys exclusive control. Allowing it to be commodified and traded in this way subjects every other aspect of these businesses to the financial interests of a very small group. It imposes incredible pressures on everyone else - consumers, workers and community members, to bow before rich and powerful institutions they can never hope to gain a fair deal from or win against in court.

The constant threat of an owner packing up shop and leaving town is a powerful bargaining chip - just ask anyone who works in a factory today. The very fact that our town can't even negotiate for a new stadium with the owner of its CFL team without public threats of this sort says a lot.

Unpredictable Whims

Subjecting the ownership of local businesses to the unpredictable whims of large venture capitalists and monopolistic conglomerates clearly isn't working. Hamilton cannot stop "Globalization", but we don't have to bow down before it, either.

Embracing the ideology of foreign investment - whether coming from Ancaster, Toronto, or some big-named corporate behemoth - is not safe, sustainable or wise. If we embrace a branch-plant economy, as we have in the past, we will always be subject to petty threats and demands from the parent corporations.

Economies and cities do not simply need commerce. The fact that money is changing hands or ground is being developed says very little. How those decisions are made, how that money flows, and who ends up in control matter just as much.

Franchise restaurants and chain stores may line our streets, but what creative control does that grant to those who work there (or even those "in charge")? Centralizing this control means that everwhere else managerial tasks must be shifted simply to implementing the designs and decisions created 'at corporate headquarters'.

That leaves our town with few if any avenues for local creativity or entrepreneurship.

Local Ownership

The single best decision we as a city could make is to turn, instead, toward local ownership. Whether that means traditional small businesses, home-based enterprises or co-operatively run machine shops, decisions must be left in the hands of people who understand and care about our city and communities.

Hamilton represents an enormous mass of skilled labourers, entrepreneurs, artists and others. The departure of the former industrial leaders creates a vacuum that opens the door to some really interesting creative potential.

Neither I nor anyone else can provide a blueprint - this is something which must grow in its own way in each area of our city.

By focusing on the needs of a few "key players" or boondoggle projects, we've neglected everyone else. Innovation parks and aerotropoli cannot be "integrated into existing neighbourhoods" - but small firms can.

Small firms already provide the vast bulk of new jobs, as well as innovation. When small firms are locally owned, profits and control remain in the community.

Ultimately, only locally-based businesses with roots in the community will provide the benefits we wish to see from commerce and trade. And only a local based economy will allow us to whether the storms of more unpredictable and chaotic world markets.

Undustrial is a writer, tinkerer, activist and father who lives in Hamilton's North End. He chooses to remain pseudonymous as he frequently works with much of Hamilton's Development industry.

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By Truth (anonymous) | Posted February 10, 2011 at 08:05:08

Raise the Hammer

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