If we didn't have international trade, we'd lose jobs," says Bob Babcock, a sorter at Sauder Woodworking Co. in Toledo, Ohio. Babcock had been laid off for 18 months before finding uninterrupted employment at Sauder, which exports to 70 countries worldwide.
"If we can't win in the international market, then something is wrong with us," adds Harry Eschedor, an employee at New Mather Metals, Inc., a Japanese-owned firm in Toledo.
Even union leaders agree. "Everybody has to have free trade -- it's a global market," says Ron Conrad, United Auto Workers unit chairman at Chrysler's Jeep assembly plant in Toledo. "Our philosophy is not Pat Buchanan's philosophy."
Holy Toledo! Isn't this Ohio city the kind of blue-collar, ethnic town that was supposed to falter in a world of computerization and global competition? Didn't Toledoans watch thousands of auto-parts jobs flee overseas in the late 1970s? Weren't they handed pink slips when Owen-Illinois and Owens-Corning downsized in the 1980s? Weren't they jarred by the takeover of glassmaker Libbey-Owens-Ford by Britain's Pilkington? And isn't this the Toledo whose unemployment rate soared to 12.6 percent in 1982? In short, isn't this the kind of Rust Belt community that economic nationalists want to protect with a wall of tariffs and protective barriers? What's going on?
Trade, trade, trade. Refusing to turn its back on the world, Toledo has turned rust to riches by exploiting international trade opportunities. As a result, employment has reached a 25-year high, unemployment has plummeted to 4.8 percent, manufacturing jobs are growing at 7 percent a year, and waiting lists have formed for the 300-500 new housing units under construction downtown. Meanwhile, community life is flourishing -- from taverns to bowling alleys to Rotary Clubs. Notwithstanding the griping of economic nationalists, Toledoans are proving that exports and imports translate into more than just low prices and expanded consumer choice. They mean good jobs at good wages and vibrant, healthy American communities.
Evidence of Toledo's global efforts can be found everywhere. In 1991, Burlington Air Express located its international hub in this northwest Ohio city. Burlington now employs 1,000 Toledoans and ships two million pounds of air freight a day from Toledo to destinations including Canada, Mexico, Hong Kong, and Taiwan. In 1993 Toledo created an International Studies Center to teach students and businessmen Arabic, Chinese, French, German, Japanese, Polish, Russian, and Spanish. Says Joe Rutherford, a former assistant superintendent of schools, "Learning foreign languages is part of our economic-development strategy."
At the center of Toledo's comeback stands Chrysler's Jeep plant. Originally built in the 1880s, this factory is the oldest continuously operating auto-assembly plant in the United States -- and looks it. An antique brick smoke stack, still belching smoke, bears the name of Willys-Overland, the plant's one-time occupant and long-forgotten jeep inventor.
But the plant's time-worn exterior belies its vitality. Inside, scores of Jeep workers busily inspect Jeep Cherokees under a banner that reads, "The customer is our final inspector." The final inspector for many of these Cherokees will be Japanese. Or Chinese. Or Egyptian. This year the plant will ship 40,000-50,000 Cherokees, or 30 percent of its total production, to 130 international destinations. And these figures do not include exports to Canada, whose market is so integrated with our own that it is not measured separately. Nor does it include the completed but disassembled Jeeps the plant will ship to China, Egypt, Venezuela, and Argentina.
The plant almost closed in the mid-1980s. "We had let our guard down a bit," explains Toledo Mayor Carleton Finkbeiner. "We had become comfortable with our market share, but our days of domination were over." International competitors were beating the overalls off of American automakers, and Chrysler could not afford to operate Jeep factories in both Toledo and Kenosha, Wisconsin.
"Our plant generated more workmen's compensation costs than the rest of the Chrysler assembly plants combined," admits Ron Conrad of the UAW. To boost production, Jeep workers have slashed workmen's comp costs and lost-time injuries by 41 percent since 1990, and have cut employees' grievances from 1,665 in 1985 to 30 today. Workers at Jeep have even initiated a Product Quality Improvement (PQI) program in which Jeep employees work in teams (there are now 282) to identify ways to cut costs and generate efficiencies.
Thanks to its higher productivity, this plant survived to become the first American auto plant to produce right-hand-drive vehicles for Japanese and European markets. In 1995, the plant shipped 30,000 right-hand-drive Cherokees overseas, up from 18,000 in 1994. This year it will send 12,000 to Japan, 25,000 to Europe, and thousands more to Australia. Jeep has shaped up to ship out: Exports constitute this plant's fastest-growing market.
Such success benefits the local economy, not just Chrysler's shareholders. "We have used the growth in the export market to grow our plant," says Gerald Huber, a Toledo plant manager until his recent promotion. A plant that in 1973 employed approximately 3,000 Toledoans now employs 5,600. Workers earn $45,000-$50,000 a year, on average, and were rewarded for their efforts in 1994 with $8,000 profit-sharing checks.
Jeep's recovery has been a boon for community life on Toledo's historically Polish North Side. A shop called Cakes, Candies, and Crafts is doing a thriving business teaching locals how to make pierogi (Polish dumplings). Betty and David's restaurant, located across the street from St. Wojciecha's church, serves one of the best breakfasts in town to a full house every morning. Real estate is "as good or better than it's ever been," says Brent GagnÇ, who has sold real estate in Toledo since 1971. In the mid-1980s joblessness made it difficult for people to qualify for a mortgage, and seller-assisted financing constituted 75 percent of GagnÇ's business. Today's buyers get mortgages on their own. And two of the North Side's most venerable institutions, Central Catholic High School and St. Vincent's Medical Center, recently made capital investments that will keep them in the North Side well into the next century.
John Henry Fullin, a North Side resident, talks about "an explosion of people getting involved to make things better." North Side denizens, for example, have devised a community-policing program that has reduced crime 42 percent. And many residents have become involved in Toledo's volunteer-based Sister Cities program with foreign cities. Through Sister Cities, residents established a Jeep dealership in Szeged, Hungary, that now imports Jeeps from the Toledo plant.
But Jeep is not the only company in the greater Toledo area to have hitched its wagon to the global market, nor is the North Side the only Toledo community to reap the benefits of international trade. Companies throughout the region demonstrate that imports and foreign direct investment, in addition to exports, can benefit communities.
New Mather Metals produces stabilizer bars, which control automobile suspension systems during cornering. It has been a staple on the North Side for 80 years. In 1987, the company employed 70 workers. It now employs 175, and its growth shows no sign of slowing. The plant recently purchased two pieces of property and plans to add four new production lines, or 20 new jobs. While New Mather ships a small percentage of its stabilizer bars directly overseas, its domestic customers install a large percentage of New Mather's bars in cars intended for overseas markets.
Sauder Woodworking Co., situated west of town, is the world's largest manufacturer of ready-to-assemble (RTA) furniture. RTA furniture is made of particle board that is covered with micropaper laminate to give it the appearance of genuine oak or cherrywood. Approximately 260 Sauder workers owe their jobs to exports, and international sales, which have skyrocketed 400 percent the last five years, will soon enable Sauder to add 750,000 square feet of factory space to its existing facility.
In Delta, an industrial suburb, a primarily residential landscape is being interrupted by the construction of a $425-million steel mini-mill. The mill will recycle scrap steel from junked cars and appliances and will generate 350 jobs and $16 million in payroll. A portion of the steel processed at this mill will be exported to Canada, helping revise America's recent record as a steel importer.
Imports and foreign direct investment are essential to these businesses. Delta's mini-mill, for example, is a joint venture between a privately held American firm and Broken Hill Proprietary (BHP) of Australia. New Mather Metals, on the other hand, is entirely foreign-owned. It was bought in 1987 by NHK Spring of Yokahama, Japan, to supply Japanese car makers. And in a business where a table is often judged by its cover, Sauder imports from Japan the micropaper it uses to cover its furniture. New Mather also imports: Nearly all of its equipment comes from Japan. Jobs at Sauder, New Mather, and Northstar/BHP are bound up with either foreign money, foreign imports, or both.
As with the Jeep plant, the success of these companies in the global market affects the communities around them. Just ask Anne Summers, who owns a bar called The Village Tavern in Delta. "If you drink in this town, I probably know you," she boasts. But Summers twice considered closing her doors in the 1980s, because factory closings emptied her bar stools. Now business is booming. With a gleam in her eye, she reports that contractors will employ 3,000 workers this summer to complete construction of the mill. Summers is also excited that her two grandchildren will benefit from a new computer lab Northstar/BHP has installed in the local public elementary school.
Back in Toledo, a different small business is feeling the effects of the export-led surge in employment. Tony Packo's, a restaurant made famous by the 1970s hit sitcom M*A*S*H and well known for its Hungarian hot dogs, has served the Hungarian community for more than 60 years. Antique signs bearing the names of companies from Toledo's industrial past, like Champion, remind visitors that Packo's has seen the best and worst of Toledo's fortunes. Diana Chastien, a Packo's manager, has just hired five new employees and plans to hire more. She attributes a recent surge in the establishment's business to the turnaround in the Toledo economy. She has also noticed that Hungarians who had moved out of the community during the downturn in the 1980s are moving back.
Even bowling seems to be affected. Bowling in Toledo had declined during the lean 1980s, when cheaper forms of entertainment, like video rentals, became popular, but has held its own in the 1990s. Larry Nworowski, the president of the Greater Toledo Bowling Association, reports that leagues will even gain a couple of hundred bowlers this year. Approximately 25,000 Toledoans bowl in league play -- out of a total metropolitan population of 750,000. In Toledo, it seems, citizens don't bowl alone.
In fact, everywhere you turn in Toledo international trade seems to be leaving its imprint. Demand for hotel rooms is up 20 percent from last year. Kevin Mann, a clerk at the Fairfield Inn, attributes full occupancy there to "international types." Convention business is also booming. In February, Toledo hosted the International Air Cargo convention. And international companies are supporting philanthropic causes like the revitalization of the century-old Valentine Theater and the construction of a center for science and industry.
The volume of international freight passing through Toledo is one final but important sign of the impact of trade on Toledo. The port of Toledo exported 2.8 million tons of freight to Canada, Japan, Europe, and Africa last year. Five thousand people earn $110 million in payroll in jobs related to the port's trade activities. Sauder itself sends 105 truckloads of furniture out a week, a good portion of which is destined for international markets. And trucks will line up all year to carry 50,000 Cherokees to all international points.
Toledo isn't the only American community prospering thanks to international trade. International powerhouses Goodyear Tire and Rubber and Hills Pet Products have helped create 12,000 jobs in Topeka, Kansas, since 1988. John Deere's Augusta, Georgia, tractor plant expanded its payroll 50 percent last year while importing parts from 10 countries and exporting tractors to 33. In Priest River, Idaho, Hartford Communications, a firm that refurbishes telephone systems and whose export sales are growing 50 percent a year, is hiring unemployed lumber workers. And in Rochester, New Hampshire, the state's second-largest employer, Cabletron, which will derive 50 percent of its revenues from exports by 1997, is hiring five Rochesterites a day. The list goes on.
But protectionist doomsayers insist that American communities like these can't survive without tariff and quota walls -- a kind of government-enforced affirmative-action program for U.S.-made goods. It seems of little consequence to them that America has become the world's largest exporter under a free trade regime. U.S. exports have grown more than 45 percent in the last 10 years and 12 million Americans now work in export-dependent jobs. Trade free of government interference is vital to the millions of Americans and thousands of American communities benefiting from it. Says New Mather's Eschedor, "Protectionist countries only push their people backwards. Our jobs, our prosperity, and our future depend on free trade."
