Friday, May 28, 2010

What Westinghouse Wrought

On obituaries I missed this that Michael Jordan passed away the the other day as well.  No not that Michael Jordan, the one that had a much bigger impact on the history of Pittsburgh.

One of the better pieces out there anywhere in the nexus of journalism and history was the PG series looking at the whole sordid tale: Who Killed Westinghouse?

My summary is just a bit shorter.  Jordan wanted the big media lights, but was stuck running what some thought was merely an old industrial company.  He wanted to run CBS, so Westinghouse bought CBS, became CBS, and then just ditched the residual which was what Westinghouse had been for a century. Business hubris run amok.

It gets to some real questions of how Pittsburgh survived the recent decades.  Westinghouse's dissection was not the result of any of the same structural forces that did in the steel industry here.  Some maybe, but not the bulk of it.  Many of the parts of Westinghouse were and in some cases still are competitive enterprises, but the collective Westinghouse and its synergy in technology was taken apart by Jordan and Co. never to be put back together.

The impact on Westinghouse on  the the region is recognized by many, but the memory is fading.  What we have of a technology base in the owes much of its existance to the people and enterprises brought here by Westinghouse in one way or another.  From the remnants of Westinghouse Nuclear (no need for the qualifier anymore) to a long list of companies that would take too long to go through.. the common thread is W.   The Westinghouse R&D complex was one of the best in the world for decades at what it did creating technology and was in and of itself one of the main draws of migrants (international and domestic) into the region for decades when there were few other economic reasons to move here?  Many communities of folks are here because Westinghouse brought them here and the vast Pittsburgh transfromation we talk about would not have been possible if they were not here.

So if Pittsburgh was able to rebuild itself with what Westinghouse left us, imagine the history if Westinghouse had not been torn apart. Sorry for the rant.  BP may be in the news, memories of Enron are fading... but what Jordan destroyed for such inconsequential gain is unmeasureable.  When it comes to sheer business ego that ignored the consequences, the story of Westinghouse and CBS may top them all.


Blogger hholt01 said...

Excellent insight again C.B. I loved the "Who Killed Westinghouse" series in the PG and still on occasion read over it, very great piece for me having been in the financial industry and a student of politics.

I sometimes wonder how the world would be if Gulf Oil AND Westinghouse had survived and prospered as Pittsburgh conglomerates. Few remember that an oil company not a steel company was Pittsburgh's largest from the 1960s to 1985. The almost 2,000 whitecollar, engineering, PhD and corporate jobs Gulf Labs and Gulf HQ ripped away as it was sucked into Chevron and the tens of thousands of jobs that depended on those jobs would have answered a lot of the "lack of airport hub", "oldest county", "demographic time bomb", "lack of migration" questions we face today. I still can remember Harold Hammer fighting on the steps of the Gulf Building against merger, and Mayor Caligiuri searching for ways to stave it off. I would love for the PG to do a minute-by-minute piece on that battle Royal.
The death of those two global brands and the steel mills I think is the exact point where Pittsburgh got its low self-esteem from.
I remember a National Geographic article from 1966 or 1965 stating that Pittsburgh had the largest number of coporations outside of NYC and Chicago and the largest density of PhDs, thanks mainly to Gulf Labs and Westinghouse Labs.

I think what this town needs the most is a Bill Gates to create the next global industry that could recreate Pittsburgh as a global center much as Gates did for the "Will the last person leaving Seattle turn off the lights" Boeing-Shipyard malaise Seattle of the 1970s.

Friday, May 28, 2010 10:40:00 PM  
Blogger C. Briem said...

thx. I'd love to know more specifically the reference for the "most PhD's" factoid.. That thought comes up on occassion and I've never found where the idea was coming from.

The Gulf Oil history is on my mind a lot for a different reason. That history was clearly on the PG's mind at one point and our late friend John C. told me had had once worked on a book doing just that.. detailing the demise of Gulf. Might be worth looking back on.

Yeah. Seattle. When I have tried to benchmark the worst regional economic malaise's (an unscientific concept) Seattle is what I come up with as the only example where things were once worse than here. But the decline in aviation industries in the early 1970's was at its core mostly cyclical and much of it bounced back quickly. So Gates+ certainly was a plus itself, but the core economy there provided a base that we didn't have. When our jobs went away, they were mostly structural losses, never to come back.

Saturday, May 29, 2010 6:38:00 AM  
Anonymous johnnyg said...

Very wise you both are.

But. Where are the Pittsburgh bankers/venture capitalists/equity funds willing to take risks? George Westinghouse and Gulf Oil prospered in significant part because money--mostly Mellon money--believed in them even when they stumbled in the early years.

The real difference between Pittsburgh and Seattle/Silicon Valley is that, here, you fail once, you're branded with the scarlet "F" for life. You fail somewhere else, that's a badge of experience and courage.

Saturday, May 29, 2010 8:10:00 PM  
Blogger C. Briem said...

Yeah... but in this case Jordan didn't fail in an attempt to create something new.. It was all a shuffling of equity that in the end didn't add value anywhere. A counterfactual we will never know, but I suspect W would have survived bigger and stronger if it had gone through bankruptcy vice what actually happened.

Saturday, May 29, 2010 8:28:00 PM  
Anonymous YinzerBoy said...

I remember watching a BBC documentary 12 years ago called "Triumph of the Nerds," which chronicled the growth of the PC (and burgeoning internet) industry in the US. It was hilarious watching the old footage of these guys making their own computers. They reminded me of... Dad.

We all turned to him halfway through it and said, "OMG that is you!!! Why didn't YOU make billions?" His answer: "Because I was working on the systems those guys were drooling over."

It's interesting watching the trajectory Westinghouse took vs. GE. Both were kinda creaking along in the early 90s. One found religion, the other reincarnation via spinoffs. Perhaps GE just bought time under Welch?

Tuesday, June 01, 2010 9:59:00 AM  
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