what has
kept the local economy humming, if not singing, for decades.
The story of Spokane's duet with aluminum goes back to
1941. With World War II looming, the U.S. military anticipated needing more
aluminum for ships and airplanes.
Grand Coulee Dam could provide the necessary
electricity for the power-hungry smelting process. But a safe,
out-of-the-way location was needed to protect a $71 million facility from
foreign attack.
Two rural sites just outside Spokane were chosen, and
ground was broken in November 1941 -- less than one month before the attack
on Pearl Harbor.
After the war, the government invited private
companies to take over its Spokane smelter and rolling mill. But with 2
billion tons of aluminum already in strategic stockpiles and thousands of
warplanes destined for scrap, the metals market appeared grim.
Besides, Spokane's wartime "virtue" of
remoteness looked like a post-war liability.
Enter Henry J. Kaiser, a self-made 63-year-old
California industrialist who had just launched an automobile company and saw
a future in aluminum car parts.
Kaiser was familiar with Spokane. He'd moved here from
New York when he was 24, hoping to make enough money to persuade his
sweetheart's father that he was a worthy suitor.
Kaiser got off to a rough start. A local hardware
store turned down his job application 13 times before Kaiser persuaded the
owners to let him sell inventory that had been damaged in a fire.
Kaiser hired two dozen women to clean and polish the
goods, then sold them at a profit. His ingenuity and perseverance earned
Kaiser a management job with the hardware store. Those same skills became
his trademark, and his ticket to success.
Kaiser fetched his bride, Bessie, from Boston and the
couple built a home on three lots at 1115 S. Grand.
Six years later they moved on when Kaiser started a
road-building company -- the first of many far-flung enterprises that earned
him wealth and respect.
Yet, when Kaiser signed a lease for the government's
Spokane aluminum plants in 1946, Fortune magazine called the move
"Henry's folly."
Kaiser paid $458,000 the first year -- and netted $5.3
million in profit.
By 1950, he owned the facilities outright, and Fortune
had changed its tune. "Not since the rise of Henry Ford," the
magazine declared, "has an industrial figure come so far in so short a
time."
Kaiser's mills made more than aluminum. They created
well-paying blue-collar jobs, paid taxes and nurtured community goals.
Dave Rodgers, Spokane mayor from 1967 to 1978,
remembers Kaiser Aluminum as a stabilizing economic force. "The most
important thing was the spinoff jobs that came from that large
payroll," he says. "Restaurants, taverns, little machine shops
around town that made parts for Kaiser."
Rodgers also remembers the company as a good corporate
citizen. "During my three terms as mayor, we never had a problem."
Rodgers says Kaiser supported the Expo '74 World's
Fair and donated the aluminum fountain on the corner of Washington and
Spokane Falls Boulevard, next to the Opera House.
"They just kept pumping out aluminum day in and
day out. There was never any question of their not being here for the
foreseeable future," he says.
Geneva Ward, who bought the Sportsman Cafe &
Lounge on North Market in 1980, recalls her predecessors preparing box
lunches back in the 1950s for the Mead night crew and people working
overtime.
By 1984, Kaiser's Spokane operations generated a
payroll of more than $152 million, and paid another $7.7 million in state
and local taxes. Kaiser's total impact on the local economy that year was
estimated at $536 million.
"When Kaiser was up and running strongly,"
Ward says, "you could tell shift change by who was sittin' in the
restaurant and who wasn't. It's been a big part of our business throughout
the years."
Retired East Valley school superintendent Chuck
Stocker says having the Trentwood mill within the district boundary meant
homeowners paid lower property taxes. Back in the mid-'90s, he says,
Kaiser's share of the district's budget was 12 percent.
In 1995, Kaiser employees earned an average of $62,800
in pay and benefits -- three times more than the overall county average.
That was good for school districts, Stocker explains, "because lots of
times people vote by their pocketbooks."
He recalls East Valley never having trouble passing a
levy during his eight years as superintendent.
Bruce Walter was 21 when he went to work as a laborer
for Kaiser in 1964. His starting wage -- $2.41 an hour -- was a lot of money
for a young man fresh out of the Navy, so Walter stuck around. He retired in
1996 after 32 years.
"The 1940s, '50s, '60s and '70s were really good
years for employees," says Walter, who represented Trentwood members of
the United Steelworkers of America.
"Management and workers got along well. We had
bowling leagues; we took care of a section of the Centennial Trail -- things
like that," Walter says.
But falling metal prices in the 1980s took their toll.
Production was cut back. Employment gradually dropped from a high of 4,000
at the two plants to around 2,500.
Ownership battles ensued. In 1988, Kaiser landed in
the hands of Charles Hurwitz, a Texas millionaire with a reputation for
buying companies at bargain prices and emphasizing short-term profits.
Kaiser employees struck for the first time ever in
1995. They walked out again in 1998. In December 2000, the Mead potline shut
down for the first time since 1946.
Last week's bankruptcy filing didn't surprise Kaiser
insiders. And those on the fringe -- people such as restaurant owner Ward --
took the news in stride.
"I'm pretty uninformed," she said. "But
the past couple of years have been real tough. Without as many Kaiser
workers, I've had to do a lot more advertising and try to attract families
and couples."
Businesses aren't the only ones affected by Kaiser's
fate. Two years ago, Kaiser's Mead operation was appraised at $59 million,
generating $415,703 for Mead schools. If the Mead smelter vanished -- for
instance, if the idle equipment were sold to a foreign producer with access
to cheap labor -- tax bills paid by other Mead property owners would jump
about 4 percent.
Wendell Satre, retired chairman and CEO of Washington
Water Power Co. (now Avista), says Kaiser's fate affects many aspects of
Spokane life -- even potholes.
"Very soon, we're going to be voting on a bond
issue to repair our city streets," he explains. "If people are out
of a job, they're unlikely to vote for a bond issue that will increase their
taxes.
"If enough people like that vote no, the bond
issue will fail, our streets will continue to decline, and everyone -- not
just unemployed Kaiser workers -- will be more likely to hit a pothole and
blow a tire or break an axle."
In other words, we're all in this together. We always
have been -- ever since Henry J. Kaiser took a chance on his folly and fired
up the Mead potline back in 1946.
Like Harold Balazs and his warm creek, many area
residents assumed the aluminum would flow from Kaiser's mills forever,
enriching local workers, businesses and government coffers.
Last week's bankruptcy filing has left some locals
wondering whether, after almost six decades, the Kaiser bullfrog has sung
its last serenade.
