Tuesday, May 24, 2011

The Forest City: A rich past of fading memories

Brightly painted metal trees decorate the downtown of the Forest City.

A few Saturdays back, we learned when The London Free Press reporter Randy Richmond was a boy, his father felt too comfortable living in London and so he uprooted his family and moved everyone to Hamilton. Apparently Richmond's dad found Hamilton properly uncomfortable.

Richmond, not sharing his father's enthusiasm for discomfort, retraced his father's footsteps and returned to London. He believed he was moving to a "white-collar, life insurance, banking, university town." When he repeated his "white-collar" schtick for the editors at the paper, they corrected him: "You're wrong. London is a blue-collar, hard-driving, automotive town."

Richmond and the editors at The Free Press were both right and wrong. Yes, London is a white-collar town, but it is also a blue-collar community and this white/blue dichotomy has been London for more than a century.

Like the mythical elephant examined by a team of blind men, cities are big, complex and the impression they make depends upon one's perspective. Like that mythical elephant, whose parts add up to one strong beast, London's mix of white-collar business and blue-collar industry added up to an economically resilient urban powerhouse.

When a recession hit Canada in 1982, I recall folk saying and The Free Press reporting, that London was better positioned than many other communities to ride out a recession. That great, local economic mix gave London both resistance and resilience. It was said London resisted sliding into the ultimate depths of a recession while bouncing back quickly at the end of an economic downturn.

This is no longer true. London's  economic muscle has atrophied over the passing years. This past recession, possibly the worst to hit North America since the Great Depression, walloped this city especially hard.

What has occurred in London is not unique. Cities right across North America have suffered similarly. Change is not unexpected, yet it is not always anticipated. In fact, the changes that have frayed the economic fabric of London over the past decades are encouraged by our economic system. And make no mistake, plant closures are part of our present system. In researching this post I discovered one big player in the closing of a once major Canadian manufacturer is celebrated on a government website. Despite the job losses with which he is connected, he is seen by some in government as a Canadian hero. I'd say more, but I don't need the potential hassle.

McClary/GSW: The plant in London, Ontario.
No one should be surprised to learn that a business started in London in 1847 by John McClary had much of its final chapter written in Mexico, in China and deep in the executive offices of giant American multinationals: General Electric and A.O. Smith.

The loss of the London McClary operation was not just a London story. The business approach that doomed the London operation has rippled across the country and tainted succeeding year. Thousands of Canadian workers have been adversely affected and many Canadian cities. London is not alone. This is a nation, a global story and not just a local one.

In 1927, six Canadian companies, including the McClary Manufacturing Co., joined forces to form General Steel Wares Inc. or GSW. McClary, the oldest concern in the GSW enterprise, flourished for decades under the GSW umbrella.

Yet in the '70s, the large McClary/GSW plant on Adelaide Street closed and was demolished with production moving to Hamilton under the Camco name. Camco stood for Canadian Appliance Manufacturing Company. GSW was a minority shareholder in Camco, controlling 20 percent of the stock, while GE Canada was the majority shareholder in Camco, the largest maker of home appliances in Canada.

The unholy union of these two unequal partners, GE and GSW, was tense. I believe the first legal action taken by GSW against partner GE was filed in 1992. It was later settled out of court but another litigation was started by GSW in late 2000.

Despite its size and the apparent financial muscle behind it, Camco faced problems. In 2004 Camco closed its Hamilton plant with the loss of 800 jobs. The reason for the closure? GE moved its refrigerator production to China, according to the CBC.

A year later, Camco was taken private by Controladora Mabe S.A., Latin America's biggest manufacturer of home appliances. Interestingly, GE reportedly owned 48 percent of the Mexican company. Camco Inc. was delisted from the Toronto Stock Exchange.

When the Camco deal was being put together, GSW announced it was reviewing the fairness of the Mabe offer for Camco. According to the Globe and Mail, the review was no surprise as John Barford, the chairman of GSW, claimed that in the past GE has not done enough to help Camco prosper. GE's treatment of minority shareholders in the Camco operation had often been mired deep in a legal dispute. With this latest acquistion, more litigation appeared to be in the wind.

But a year later, GSW was itself  the object of a takeover play by A.O. Smith, the giant Milwaukee, WI, based water heater manufacturer. At the time, GSW employed more than 1,700 people in Canada and the United States.

The GSW name lingers on today but the rich range of products and thousands of Canadian jobs associated with those letters has disappeared. In 2013, A.O. Smith closed the GSW water heater plant in Fergus, Ontario, leaving 350 workers unemployed and their pensions in question. GSW water heaters are still sold in Lowes but the units are no longer made in Canada.

Lots of workers, not only those in Fergus, Ontario, were left with serious concerns for their pensions as all this wheeling and dealing unfolded. In August, 2014, Mabe Canada declared bankruptcy leaving hundreds of Canadian pensioners and workers with under funded pensions. Read: GE and Mabe Screw Canada.

After the announcement, the Régie des rentes du Québec took over the provisional administration of the Mabe Canada pension plan. 1600 workers were affected. One is left to wonder how the executives, those workers at the top of the business food chain, made out.

In writing this blog, I've learned businesses are often not simply shuttered and closed but purchased, merged, downsized and hollowed out of value, with every action often accompanied by layoffs and buyouts as once-successful-business are downsized to oblivion. The downward spiral can be unbelievably complex with outcomes devastating to both communities and workers. Consider the following list of companies:

  • McCormick bakery, founded in London in 1858, closed by Beta Brands in 2008
  • London Life, founded in London in 1874, taken over by The Great-West Life in 1997
  • The London Free Press, founded in London in 1852, bought by Sun Media in 1997, subsequently bought by Quebecor Media Inc.
  • Canada Trust, with London roots going back to 1872, taken over by the TD Bank Financial Group in 2000
  • Labatt Brewery, founded in London in 1847, is now part of the global producer AB InBev. The purchase of Labatt resulted in job losses outside London but, for the moment, the home plant appears safe. But, with the owner of the brewery on another continent, there are no guarantees.

The old Hole Proof Hosiery building with its yarn drying tower.

There are lots more names in London's past but many departed London decades ago. Their London connection has faded from most folk's memories: Carling Brewery, Hole Proof Hosiery, Imperial Oil, Perrin Bakery, Ruggles Motor Truck, all fall into this category.

This Dundas St. E. building once housed Ruggles Motor Truck.

I met a developer at a recent downtown improvement meeting who said the most important ingredient for improving a downtown or a whole city is jobs. Jobs mean money and money means being able to afford a better city. No jobs and no money doesn't mean shelving all city improvements but it does make the job far more difficult.


A classic yellow brick London home.
Randy Richmond has waxed poetic about The Brick this week. It's a nice piece, accompanied by a short bit of video. It's worth a look if you've got the time. But, as you might expect, the brick does not symbolize for me what it does for Richmond.

For me, the London yellow brick mentioned by Richmond symbolizes the loss of local answers to our urban needs. Once London had numerous brickyards with working kilns pumping out thousands of yellow bricks. All that's left from that time is Brick Street. The brick makers are gone.

When the Adam Beck home on Richmond Street above Oxford Street was moved and rebuilt, replacement yellow brick had to be brought in from the deep south of the United States. It was impossible to find enough good, local, yellow brick for even one home.

It's true that after London's great fires in the 1840s, yellow brick replaced wood in the construction of new housing. But wood made a comeback and locally-made yellow brick dropped from sight. The development of balloon framing using less lumber, going up faster and requiring less skilled labour rang the death knell of the solid brick home.

By the time the Westmount subdivision was built by the Sifton family, true brick homes were history. All the homes in Westmount, and subsequent new neighbourhoods in London, are wood frame construction with platform framing replacing the older balloon framing method. Brick is only a veneer in new homes. It is non-load bearing. This is why homes can be totally brick on the front, facing the street, and only partially brick on the other sides with the second floor often sheathed with vinyl.

Modern townhouses in the Westmount subdivison. Very little brick was used.

And many of the bricks today are not only not made from London clay, they are not made from clay at all. Often bricks used today in London are concrete. Even the bricks denoting a Sifton home are not clay bricks.

Homes today are brick veneer, vinyl sided, paneled with material to imitate wood siding or stucco but under the skin all homes are wood. Despite the great fires of the 1840s, behind the veneers, homes today are wood.

The lumber no longer comes from The Forest City. The clay brick plants are gone. Even London's vinyl siding factory, Vytec, has closed.

Vytec, founded in 1962 by London businessperson Andy Spriet was owned by the French manufacturing giant Saint Gobain at the time the plant was closed. According to The London Free Press, Terry Off, Vytec president, said:

"They will take production to the U.S. I was watching the faces of workers when the announcement was made. It was heartbreaking."

1 comment:

  1. Nice piece, Rockinon. It almost restores my former interest in the city, which has waned over past years. I found your work more interesting, more readable and better (no surprise here) presented than RR's of The London Free Press. Keep it up and I may become a devoted e-reader. on The Forest City: A rich past of fading memories.