Alcoa's Coming Back To Pittsburgh, But Don't Expect Blue-Collar Jobs To Come With It
Amid Uber's self-driving cars and vans ferrying bread and vegetables to trendy restaurants, a plaque on Smallman Street in the Strip District celebrates the invention of the modern process used to make aluminum by a young engineer named Charles Martin Hall.
Today, the essential modern metal is used in everything from beer cans and baseball bats to cars and airplanes.
It was here in Pittsburgh in 1888 that Hall help found what became iconic aluminum maker Alcoa.
“Between 1880 and about 1920 or so, you see a lot of strands of production that had been sort of gelling over the previous 60, 70 years,” said Allen Dieterich-Ward, history professor at Shippensburg University. “Carnegie Steel being the most obvious example of that, but also Alcoa, Koppers Incorporated and others.”
Dieterich-Ward said that for all of Pittsburgh’s working-class mythology, the city has long been home to tens of thousands of white-collar workers. Factory jobs have ebbed and flowed, but Pittsburgh has always been a city of offices.
“You see, simultaneous with Pittsburgh’s growth as an industrial center, the development of the banking industry as well as kind of the corporate executive expertise that we take for granted now, but that simply didn’t exist before the civil war,” he said.
But after more than a century in the Steel City, the company decamped for Park Avenue in 2006. Now, Alcoa's executive headquarters are coming back, but any thoughts that that means the firing up of smelters on the three rivers are premature to say the least. The aluminum industry has drastically changed in the last 20 years. In 2006, the year Alcoa moved to New York, it operated 10 smelters in the U.S. and accounted for roughly 10 percent of global production.
Since then, China has flooded the world with cheap aluminum, deflating prices and forcing Alcoa to close smelters in places like Tennessee and Texas, and rely more on production in places with cheaper power like Iceland and Saudi Arabia. Last year, the company split in two, with a new firm called Arconic taking over its business of making manufactured aluminum like truck wheels and screws for airplanes.
So if Alcoa’s return to Pittsburgh doesn’t spell a resurgence in American manufacturing, what does it mean for the city?
“It’s a big deal,” said Allegheny County executive Rich Fitzgerald. “We’re excited that one of Pittsburgh’s founding industrial partners of years ago is coming back. And it’s a great mix with what’s going on in the new technology. The new Pittsburgh. In robotics, and artificial intelligence and all the things that are going on here around medical technology ... We're glad to have them back."
But what might seem symbolic for Pittsburgh is, for Alcoa, a decision that comes down to dollars and cents. It’s cutting eight offices total, from Beijing to Nashville to New York, mostly to save money on things like Park Avenue rent.
“We will save about $5 million a year once the consolidation of the office is complete,” said Alcoa vice president Molly Beerman.
And, in the end, being a white collar capital is a good thing, according to University of Pittsburgh economist Chris Briem.
“Well, I think they’re relatively better paying jobs,” said Briem. ”Large corporate headquarters, you know, to be successful, is a talent business. They bring in the best people. So you’re looking at the higher end of the salary scale.”
Briem said that although it would be better to also have manufacturing jobs, Pittsburgh’s future is as a white-collar city, which is kind of like its past, too.