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Monthly Archives: September 2017


Sketch of the Merrimack Valley Works plant at North Andover while under construction in 1955

Merrimack Valley pols courting the tech behemoth have forgotten recent history

Sept 26, 2017


A couple of weeks ago, I criticized the possibility of an Amazon Boston deal—on the grounds that most of the jobs it would provide would be for software engineers, not our struggling local working class. And that allowing a single company to build a 50,000-employee operation here overnight would give it way too much political economic power in our region. However, it’s not just Boston politicians who are hot to dump vast amounts of public funds on the huge multinational. Several other Massachusetts cities and towns are following suit.

Perhaps the strongest proposal of that group of entrants is coming from four municipalities in the Merrimack Valley region of the state: Haverhill, Lawrence, Methuen, and North Andover. They are offering to broker a deal with the owners of the underutilized 1.8 million-square-foot industrial facility called Osgood Landing in North Andover. This could conceivably fit Amazon’s bill, although the site is not located in the midst of a major city. Which the company has made clear is a priority. Also at issue is that Osgood Landing’s owners have been working to build a giant marijuana farm on the site instead. But the siren call of ready corporate cash will likely be enough to change their minds given that they’ve already signaled their support for the new venture.

Lost in most of the media chatter about the drive to “win” the Amazon deal is the fact that Osgood Landing was once a Lucent plant—and the context of its shutdown is completely absent. Lucent was the successor corporation to Western Electric. Which was better known as the old AT&T’s manufacturing division. And the North Andover plant was once Western Electric’s Merrimack Valley Works. Which built the transmission equipment that kept the nation’s phone system going. The company set up shop in Haverhill and Lawrence during World War II—just as the region’s famed textile and shoe industries began to decline. In 1956, it opened the North Andover plant and consolidated its regional operations there, becoming the new dominant industry in the area.

Video: “AT&T Archives: In the Merrimack Valley” [1959] (hat tip to Ryan W. Owen’s website for the find)

The jobs at the Merrimack Valley Works were mostly unionized, and they raised thousands of local families into the ranks of the middle class. But the chaos following the federally ordered breakup of AT&T’s near-monopoly of the US telephone system in 1984 saw the plant’s workforce fall from over 12,000 at the height of the Western Electric era in the 1970sto 7,000 in 1991, to 5,500 under Lucent in 2001 (well into a quick collapse five years after taking over the Western Electric business)… to zero in 2008, after the French telecom multinational Alcatel bought Lucent in 2006 and ordered the facility’s shutdown. The plant itself had already been sold to current owner Ozzy Properties in 2003. Alcatel-Lucent ended up being absorbed by Nokia in 2016.

Ironically, this sad outcome was predicted by local policy experts. In 1991, according to the “History Corner” of the Lucent Retirees’ website, “the Merrimack Valley Planning Commission investigated what the potential loss of … the Merrimack Valley Works might cost the region. The study found that a worst case decline that eliminated the plant’s then 7,000 jobs would cost 15 Valley communities $880 million. Lost supply orders for smaller companies in the area would eliminate another 7,700 secondary jobs.”

That all came to pass by 2008. Compounding the damage already done by the loss of the other 5,000-plus jobs at the plant between the 1970s and the early 1990s. Lucent’s unions slowed but ultimately could not stop the destruction of thousands more good jobs in the Merrimack Valley.

Which highlights the problem of spending public money to attract giant corporations like Amazon. Big companies can change their plans at the drop of a dime. And, without the kind of government regulation and unionization that major companies like AT&T had to operate under between WWII and the 1970s, the promised 50,000 jobs can become no jobs in the blink of an eye. Because who’s to stop an anti-regulation, anti-union company like Amazon from shutting down an operation as fast as it sets it up in this era? No one. No one at all. And, naturally, regions that fall for this “jobs creation” shell game have no plan B.

One would think that political leaders in Haverhill, Lawrence, Methuen, and North Andover, informed by their own regional planners, would remember such history and focus on more sustainable economic development options. After all, the 2013 Merrimack Valley Comprehensive Economic Development Strategy produced by the Merrimack Valley Planning Commission stated, “The region’s best prospects for future economic growth are its local entrepreneurs.” Local entrepreneurs like the Osgood Landing owners, if they choose to start their marijuana farm rather than grab for the brass ring Amazon could offer them. A sustainable “growth” industry if ever there was one that could provide an estimated 2,500 good jobs to the region—two-thirds of which would not require college degrees. But it seems like local residents, perhaps with former Lucent employees in the lead, will now have to remind their elected officials. If not in lobby days and protests prior to an Amazon deal, then definitely at the ballot box come next election should such a disastrous initiative ever actually come to pass.

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director, and executive editor and associate publisher of DigBoston. Copyright 2017 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.


Stop the Amazon Boston Deal


Locals have until Oct 19 to say ‘No Public Bribes to Corporate Scofflaws’

Sept. 12, 2017


Fresh off of throwing tens of millions of dollars at General Electric, Boston Mayor Marty Walsh and Massachusetts Gov. Charlie Baker are now planning to enter the international horse race to convince Amazon to let the city and the commonwealth shovel vast amounts of public money at it in exchange for building a new second headquarters (“HQ2” for short) here.

But this HQ2 won’t be just any corporate headquarters. No no no. None of this GE business — with maybe kinda sorta up to a piddling 800 jobs at a new Boston HQ at some point. Amazon plans to put 50,000 workers in its new digs. Fast.

Thing is, the bulk of those jobs are apparently slated for software developers. Which, true, our colleges produce in some numbers. But most of the students who train for high-tech jobs are from “outta town.” So the new jobs are not going to benefit our shell-shocked Boston-area working class. If the Seattle experience is any guide, the gigs they’re going to get from the deal will be the same unstable jobs as subcontractors — ranging from cafeteria workers to security guards — that they’re already struggling to survive on now. And those jobs do not “raise” any “boats” in anyone’s fantasy scheme of how capitalist economics works.

For both the city and the state, there’s another big red flag: Amazon proposes to spend $5 billion building a campus of around 8 million square feet. Leaving aside the lack of the necessary 100-acre plot in or near downtown Boston, that kind of build-out is going to place a huge burden on both our metro housing and transportation infrastructures. Yet Amazon is coming on to cities like Boston with hand outstretched. Looking for the tax breaks and direct aid (read: bribes) that all big companies expect when they move to a new location these days. And after starving even more social programs to pay for this latest boondoggle, what are working families going to get back from the huge multinational?

Probably not much. According to the New York Times, Amazon only paid an average local, state, federal, and foreign tax rate of 13 percent between 2007 and 2015 — far less than the official federal corporate tax rate of 35 percent alone, and less than even the 15 percent corporate tax rate that the Trump administration is trying to pass. Given that Boston real estate developers have been allowed to build primarily “luxury” condo complexes in the last many years, vacant units will be quickly snatched up by Amazon employees, and then the remaining downmarket properties will be upgraded by landlords looking to cash in. The result will be even more Bostonians without decent housing, legions more homeless people, and little new tax revenue to pay for the mounting social crisis thus created — or for making the desperately needed repairs and upgrades to our crumbling and utterly underfunded public transportation infrastructure.

Back on the labor tip, Amazon has gone out of its way to crush even the most insignificant union drives at its facilities worldwide since its inception. As when a small group of maintenance and repair technicians at its Middletown, Delaware, facility voted 21–6 against joining the International Association of Machinists and Aerospace Workers after an intense management campaign against the workers. Meanwhile, in Germany, where better labor policies and worker militance have forced Amazon to accept some unionization, management was recently shown to be “using peer pressure” to convince workers to not use their government-guaranteed sick days. No surprise, for a company which has made some of its warehouse workers walk 15 miles a day on a typical shift.

So is this the kind of company we should let state and local government bigs lavish public money on?

Hell no. And there’s one big reason, aside from the above, why we shouldn’t. Allowing a company as large as Amazon to suddenly parachute a huge operation into our midst means it will immediately command an inordinate amount of political and economic power in Boston and Massachusetts. Particularly, the ability to threaten a capital strike in the form of leaving the area if any future demands for public lucre aren’t met.

Once Amazon arrives, it is going to distort the metro political economy so severely that we’ll be stuck with it. The ultimate white elephant.

Which is why any potential Amazon Boston deal must be stopped — with even more finality than the Olympics deal was torpedoed. Fortunately, unlike the GE Boston Deal — that got sprung on Boston and Massachusetts residents after months of secret negotiations — there’s still time to organize a very strong “NO” campaign. The deadline for Boston to get a proposal to Amazon is Oct 19.

Readers have a bit over a month to force Walsh, Baker, and other local pols to stand down on this one. I recommend hitting the ground running.

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director, and executive editor and associate publisher of DigBoston. Copyright 2017 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.