Thursday, June 14, 2012

Dallas, Pittsburgh and what really killed the economy?

I have a very serious question...  a question that can't really be answered of course.

What was worse for the future of Pittsburgh in the long run?  The decline of the steel industry in the 1980's or Michael Jordan's dismemberment of that which was known as Westinghouse in Pittsburgh?

The question obviously arises on the understated news that Westinghouse Nuclear (just one piece of what was the big W) moves out of Monroeville.  Westinghouse through history has meant more than ever really documented to the economy of Pittsburgh. In particular the vast Westinghouse Research and Development operation centered here was a unique source of innovation and entrepreneurship that would in many decades be missing elsewhere in the region.  Lots of what we tout today as part of the 'new' Pittsburgh economy trace back directly to Westinghouse and would likely not be here if Westinghouse had not been here for so long. 

Put another way, what would the economy be in Pittsburgh today if Westinghouse had not collapsed?  Remember, Westinghouse was not the casualty of the vast economic restructuring of American heavy industry. It was entirely a voluntary immolation on the part of Westinghouse's corporate governance.   Michael Jordan came to town.... decided to buy CBS (yes, the TV network... maybe he watched too much of the original Dallas?) and then had Westinghouse became CBS in what may have been the most misguided reverse merger in history.  That which was once Westinghouse was sold off, closed or otherwise deconstructed..  Michael Jordan took with him if not a lot of Pittsburgh, then a lot of its future and probably didn't lose any sleep over the fate of the Turtle Creek Valley.  Jamie Dimon in comparison will likely only make a few big JP Morgan equity owners unhappy. 

The recent history of how the economy today connects to W is  hard enough to capture, but the W history is in itself over a century long now.  What was the first 'spinoff' (a term I doubt was used at the time) from Westinghouse's research?

Trying to fix my water heater recently I think I found an answer to that? The electric water heater was invented in Pittsburgh. Who knew? One Edwin Ruud was a Norwegian immigrant who wound up in Pittsburgh working for George Westinghouse and along the way invented the water heater.  You might recognize Ruud as possibly being the name on your water heater today. 
More from the Pittsburgh Press: Man with a heater or the patent itself, 19th century innovation at its finest, or a great ad from the Pittsburgh Press in 1922 for Ruud tankless water heaters.

And with became of his water heater fortune? Most of it was given away to his workers, but also some created a music scholarship extant to this day and some went to found a hospital back in his native Norway that also seems to be around in some form.

but yeah....  it was all J.R.'s fault.


Anonymous Byron Spice said...

One example of Westinghouse's impact: the formation of Carnegie Mellon's Robotics Institute. The late Tom Murrin came through with $3 million to launch the institute, primarily to develop manufacturing robots. It's expanded far beyond manufacturing, however, and is now firmly part of Pittsburgh high-tech identity.

Thursday, June 14, 2012 10:37:00 AM  
Anonymous Anonymous said...

Westinghouse is still in Pittsburgh, and much larger than it has been in recent years. Although the Monroeville facility is closing, all those jobs were moved to Cranberry where an addition 4K have been hired over the last 5 years.

Thursday, June 14, 2012 12:12:00 PM  
Blogger Dean Jackson said...

When's the last time Westinghouse was the forefront of innovation, though?

My bet would be tech companies - and Pittsburgh successfully getting them to base themselves near CMU - are Pittsburgh's modern equivalent of Westinghouse of 100 years ago.

Sunday, June 17, 2012 10:41:00 PM  
Anonymous Anonymous said...

Westinghouse started abandoning northern (union) locales in the late sixties, moving manufacturing to places like Round Rock, TX and Columbia, SC. Lots of friends moved away, some opted to stay and start over.

Wednesday, July 11, 2012 10:26:00 PM  

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