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1980-1989: DECADE OF ECONOMIC TURMOIL & TRANSITION


Out with Harvester, on to GM


Closing the doors
News-Sentinel photo by Carl Hartup

Closing the doors
Gates to International Harvester's Scout plant were locked a few years before the company's other Fort Wayne operations closed.
By Lynne McKenna Frazier of The News-Sentinel

For almost 60 years, International Harvester Co.'s truck plant stood like a rock in Fort Wayne. In the early 1980s, the rock crumbled. And for a brief, terrible moment, it seemed the city might crumble, too.

Fort Wayne survived those bleak days, when unemployment hovered around 12 percent. Yet the ghost of that era of hardship remains. Even today, there are mixed feelings toward the company that was for so many years Fort Wayne's largest employer.

No single company here comes close to employing the numbers of people who worked for Harvester — 10,600 at its peak. Those workers built heavy-duty trucks and the Scout, an early four-wheel-drive vehicle. They designed and engineered medium- and heavy-duty trucks, staffed a high-rise parts warehouse, and ran the truck reliability center. By the time the truck plant closed on July 15, 1983, the numbers of workers had dwindled to about 3,000.

Today, the few local residents who still work in truck manufacturing at International Harvester, now Navistar International, commute to the company's truck plant in Springfield, Ohio. But the Harvester tower still looms over Coliseum Boulevard.

Fort Wayne became caught in what would be a familiar story of the 1980s — a once-invincible industrial giant vulnerable to a rapidly changing world and a community hard pressed to survive those changes.

* * *

The 35,000 United Auto Workers who returned to work at Harvester plants throughout the Midwest in April 1980 were largely satisfied that they had won their 172-day strike. Members, including the more than 8,000 of Locals 57 and 305 in Fort Wayne, were ready to go back to work.

The company that began with Cyrus McCormick's mechanical reaper was the second-largest farm-equipment maker in the nation. It had a small, but respectable construction machinery division. And it made trucks, ranging from the Scout, scheduled for a major new look for the 1981 model, to the Class 8 over-the-road trucks that haul goods across the nation.

But in the spring of 1980, executives in Chicago and workers at plants throughout the Midwest saw something happen that never had occurred before. All three businesses — Harvester's truck, agricultural equipment and construction lines — deteriorated at once.

Layoff followed layoff. The Scout line was closed after an abortive attempt to sell it. The bleeding reached levels never seen before. By September 1981, more members of UAW Local 57 were laid off than working.

Harvester was not unusual. These were the years that Chrysler Corp. flirted not once, but twice, with bankruptcy. Companies throughout Fort Wayne slashed their work forces as business disappeared. Some closed permanently.

The entire U.S. economy was in recession, largely brought about as the Federal Reserve tightened money to bring the inflation rate down from double digits. In Allen County, only 324 houses were built in 1981; 126 were foreclosed. Unemployment stubbornly hung around 12 percent. That meant more than 30,000 people in northeast Indiana were out of work.

Many left. In the early years of the decade, some were lured by the boom times brought by high oil prices in Oklahoma, Texas and Louisiana. Others left under the pressure of being too far behind on house payments and other debts with no end in sight.

The one bright lining was in defense-related industries. The Reagan administration's spending spree benefited Magnavox and ITT's Fort Wayne operations. Magnavox especially expanded rapidly, putting up a new technical center, enlarging the Whitley County plant and, for a brief time, becoming the largest employer in the region.

Magnavox was climbing as Harvester was sinking. Harvester executives huddled with lenders, trying to stave off bankruptcy that was all too real a possibility.

Even $200 million in UAW concessions, across-the-board pay cuts for salaried workers, dividend elimination and repeated debt restructurings were not enough. In July 1982, the most sweeping cuts were announced, including the consolidation of three truck plants into two.

The Chatham, Ontario, plant always was considered safe. The battle was between the much newer Springfield plant and Fort Wayne.

For weeks, the city, the state and private citizens struggled to come up with a plan better than Springfield's. In the end, Fort Wayne, Allen County and Indiana came up with a $31 million package, edging out Springfield's $30 million in aid.

It wasn't enough. On Sept. 27, 1982, Louis Menk announced the Fort Wayne plant would close.

But ironically, Fort Wayne didn't hit bottom after that last truck rolled off the line on July 15, 1983. The worst already was over. The long, elusive recovery was beginning.

* * *

The recovery of the U.S. auto industry drove the recovery of northeast Indiana. And it changed the face of the area's economy.

Allen County for many years dominated the region's manufacturing base. Big manufacturing plants, a legacy of World War II, were built in big cities. But new words had entered manufacturing. Flexibility. Responsiveness. Quick change. A 100- or 200-employee plant became a new standard. And Michigan parts makers discovered the low-tax, lower-wage environment of the rural counties north of Fort Wayne.

Starting about 1983, a cluster of industrial parks grew along the Interstate 69 corridor. And manufacturing employment grew less important in Allen County.

But there still were occasional big projects. And in 1984, General Motors Co. came to town.

On Aug. 31, 1984, Fort Wayne celebrated not only the coming of GM, but the end of the Harvester nightmare. A pickup plant might be a little less prestigious than a car plant, but it was a huge investment with about 3,000 jobs. Most employees were transferred in, but at least some skilled workers would be hired locally.

The GM truck plant has paid off better than perhaps even the most optimistic booster would have expected. The 1987 opening of the plant coincided with a boom in truck sales. Pickups became passenger vehicles, and the plant has logged thousands of hours of overtime since.

People stopped leaving Indiana for better times. Some even returned to ride a new manufacturing boom.

Prosperity was not evenhanded. The collapse of the Soviet Union and fall of communism throughout eastern Europe at the end of the decade led to sharp cutbacks in defense spending. Magnavox – which now is part of Raytheon, the last of four different owners since the 1980s – began a long slide in employment. But good times returned to Harvester. The company escaped bankruptcy to ride the '90s boom in the truck industry under its new name, Navistar.

Navistar has even been hiring again, but this time it wants engineers and technicians, not assembly workers, reflecting the shift to a more white-collar work force in the 1990s.

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