Vulcan’s Chattanooga Factory

By the late 1950’s it became evident that the Chicago facility was no longer adequate for Vulcan’s expanding business, both in terms of volume and size of equipment. In addition, both the plant, its location and the company’s labour situation built into the company’s financial picture costs which were increasingly difficult to bear.

At the 29 December 1959 meeting of Vulcan’s Board of Directors, President H.G. Warrington gave a lengthy report recommending that Vulcan Iron Works Inc. be moved to Chattanooga, Tennessee after 108 years in Chicago. Some of his observations were as follows, with a few notes of my own in parentheses:

Fundamentally, the most compelling motive for the move is that of economics. The saving of corporate expenses in significant amounts is, in itself, sufficient provocation to justify moving the Company…

I am advised by the State of Tennessee Dept. of Employment Security that there is a continuing supply of personnel for our needs in the classifications that we need. At the time I checked, there were more than enough open applications to fill every category at least twice…

At the present time, this land lies outside the city limits, but, I am advised by Mayor Rudy Olgiati that by the time we could effect a move, this area will have been annexed by the city… (Note: it took a little longer than that, and Vulcan actually supported annexation, an explosive political issue than and now in and around the City of Chattanooga.)

It is understandably difficult to make the decision to move a Company that has been located in one place for more than a century. First, consider that, for all practical purposes this move should have been made many years ago. I cannot speculate on the reasons why it was not effected because I was not present, but the mere fact that it was not done does not change the fact that it should have been done.

Essentially, this decision must be based on the patent economic factors that confront us. I am not naive enough to think that eventual wage rate and tax rate equalisation will not take place, however, this equalisation will also not take place over night. Consider, however, that as wage rates rise in the Chattanooga area, so will they rise in the Chicago area. I may be wrong but it is my considered opinion that this equalisation will not transpire for some ten years. (Note: he was wrong, both wages and taxes are still lower in Tennessee than Illinois after a half century, especially vis a vis the Chicago area.) At this rate, the advantages of the move will have time to pay for the plant and the move. Whether we like it or not, we must face one set of blunt facts. As a manufacturer, we must of necessity, conduct our business in a climate that is condusive to efficient manufacturing with a resulting profit. It is not peculiar to us, but we all know that in the past decade it has been increasingly more difficult to make a profit. The cost of doing business has become our greatest problem. The only answer is to find a business climate that is conducive to profit making. Do not construe these remarks as an indication that I would propose moving every time there is a change in the business weather. I do think, however that there is better weather in other places besides Chicago…

If it is the decision of this Board not to move the Company, I can readily visualise the expenditure of funds in low and medium six figure amounts to make necessary changes in our Plant to bring about changes in our Chicago Plant to yield a more efficient and profitable operation. The study in depth of our Chicago operation has yielded some interesting and alarming facts, which, if gone in to and rectified would cost a great deal of money. It would seem to me to be a great error on our part were we to spend large amounts of money on a building, the newest part of which is more than 50 years old.

I, personally advocate this move for many reasons; both personal and, more important, business-wise, mainly because it appears to me that in many ways this move may be the catharsis that this old Company needs.

The Board responded by authorising the purchase of the lot at Riverside Drive and Stewart Street in Chattanooga. (The formal address for it is 2909 Riverside Drive, Chattanooga, TN 37406.)  Vulcan thus became one of many American companies to relocate from the “Rust Belt” to the “Sun Belt.” (For a more political view of this move, click here.)

Construction on the plant was started 20 May 1960 and was completed 24 October 1960, on schedule. The operation was moved shortly thereafter.

Advertisements

9 thoughts on “Vulcan’s Chattanooga Factory

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s