Looking forwad from an industiral past

IT is not hard to imagine the intersection of 106th Street and Torrence Avenue the way it used to be.

``I'm telling you, steel was piled up out there at least 15 feet, ready to go,'' Frank Lumpkin says, gesturing toward a locked chain-link fence that encloses a weed-infested lot. Here, in the southeastern corner of Chicago, steel ruled. Smokestacks clouded the sky by day and lit it up at night. Couples dated by the glow of slag heaps. It seemed this industrial life would go on forever.

And then it stopped.

In March 1980, one day before Mr. Lumpkin was to retire from the company, Wisconsin Steel closed its doors. Uncompetitive. Bankrupt. The plant's closing started a chain of events that would turn this collection of gritty blue-collar neighborhoods on its head. If ever there was a place in America to see deindustrialization and its aftermath, this is it.

The next chapter of Southeast Chicago is still being written.

Southeast Chicago is a bit of an anomaly. Most Chicagoans think of it as part of the South Side, an area dominated by huge public-housing projects and poor neighborhoods. Natives are wrong to paint the picture so broadly.

This slice of the city, east of Cottage Grove Avenue and south of 79th Street, has enclaves that are as white as other parts are black. The area has several black middle-class communities and few public-housing projects. Its economy was relatively prosperous until the steel industry disappeared and changed everything.

Lumpkin still shakes his head at how quickly the area's fortunes reversed. ``We couldn't believe it was closed,'' he recalls of Wisconsin Steel's debacle. ``That was the beginning of the end.''

After Wisconsin Steel, every other major steel company pulled out by the end of the decade. In 1980, Southeast Chicago employed roughly one out of every five steelworkers in the United States. By 1990, the number was near zero. Only one small integrated mill - Acme Steel - remains within the city limits.

``People were really scared in 1980,'' says Lynne Cunningham, executive director of the Southeast Chicago Development Commission (SCDCOM). ``That was when their world started crumbling, because that's when the middle [class] started to go under.''

Overall, the area lost 30 percent of its jobs during the 1980s; 10 percent of its average income; and almost 12 percent of its population.

There was a racial component to Southeast Chicago's transformation, says Pierre deVise, professor emeritus of public administration at Roosevelt University. Middle-class whites left and were replaced by middle-class blacks in several neighborhoods. Most of that racial shift had already taken place earlier, before 1980.

The region still has a few communities, such as East Side and Hegewisch, where virtually no blacks live. Hegewisch, almost totally cut off from the rest of the city by the Calumet River, was the neighborhood that fared the best during the 1980s. It actually saw jobs increase 30 percent - the only Chicago neighborhood outside of the central business district to see employment growth, Professor deVise says.

South Chicago, a largely black and Hispanic neighborhood, fared the worst in the region. It lost 46 percent of its employment base in the 1980s. Unionized steel jobs provided an important path to middle-class status. In Southeast Chicago, that path no longer exists. There are signs, however, that the area has stopped its decline and is poised, perhaps, for a rebound.

Twenty blocks north of the shuttered Wisconsin Steel plant, Rich Metzger shows off the buzzing factory of the Verson Corporation. Verson is a survivor - in fact, the sole surviving US manufacturer of industrial presses. A banner hangs in the lobby: ``The Last Great American Press Team. We can compete.'' And it has.

``We're in a position where the tables have turned a little bit,'' Mr. Metzger says. That is an understatement. In 1986, the company reached a low point where it carried too much debt and faced an onslaught of foreign competition.

``I didn't believe they had a ghost of a chance,'' says Keith McKee, director of the Manufacturing Productivity Center on the campus of the Illinois Institute of Technology.

But a buyout by Chicago-based Allied Products pumped new cash into the company. The company reorganized, and the turnaround began. Verson has boosted employment by one-fourth since that time. Its market share has tripled.

But Metzger is not ready to celebrate yet. ``We are the last guys standing'' of all the US pressmakers, he says. ``The danger in this situation is that we would misinterpret a transitional period as being a permanent operating condition.'' If the exchange rate turns unfavorable, Metzger says he expects another onslaught from foreign competitors.

There are other signs of a brighter future. South Shore Bank, a local entity, has become a national model for urban redevelopment. When larger banks refused to make high-risk loans in the area, South Shore stepped in to provide loan money so area residents could buy homes and start businesses.

Businesses and community groups are coming together as never before. SCDCOM has helped sponsor a multicompany training program. The idea is that the community will help companies train their employees for more skilled jobs.

``You would be surprised what people working 20 years don't know,'' says Bob Schroeder, a trainer in the program. ``That's what most of my job consists of: breaking bad habits they have accumulated through the years.'' In each of the last two years, 100 such workers have gone through training sessions. Five companies participated last year. Ms. Cunningham says she expects that figure to double this year.

``The only regrets I have are that I can't send more people,'' says Ken Knaga, manager of human relations at Acme Steel Company.

By providing area companies with a better-skilled employee, Cunningham hopes to boost the firms' competitiveness and attract new companies to the area. The era of factories employing 5,000 workers is probably over, she says. But she foresees many smaller, technologically advanced factories starting up operations here with 25 to 50 people.

Chicago Mayor Richard M. Daley has not ignored the area's economic plight.

``If you are talking about change and departure of firms, the Southeast Side has a history of that,'' says Demetria Giannisis, director of international strategic planning for Chicago's planning and development department.

For the first time, the city is coordinating its efforts with neighborhood groups. The mayor has designated South Chicago's business district as part of its Strategic Neighborhood Action Program. The move means that the city's housing, transportation, and development departments are working together to improve the neighborhood's infrastructure.

The mayor had campaigned to locate the city's third major airport in the area. But the plan drew heated protests from several local community groups. Last year, Mayor Daley scrapped the idea. ``When that didn't materialize, there was a sigh of relief,'' Mr. Knaga says.

So far, these moves to redevelop Southeast Chicago are flickering hopes compared with the glow of middle-class prosperity that used to reign here.

``Even the mayor felt that the best use of this devastated land was to raze it to the ground and build an airport,'' deVise says, ``and perhaps that's not far from the eventual use of this area.''

But that is not the only possibility.

During the 1970s Richard Taub, a social sciences professor at the University of Chicago, surveyed the all-white East Side community with a colleague. Even then, he says he could see the signs of decline.

``Young people were moving out to Lansing, Calumet City, Dalton,'' he recalls. ``We were amazed that the community was doing as well as it did, and we attributed it to a tight community feeling.'' Perhaps community closeness, mixed with a tenacity that characterizes this area, can spark a new light in Southeast Chicago.

When Wisconsin Steel closed 13 years ago, Lumpkin did not give up. He formed the Save Our Jobs Committee, which still hands out free food every month and is carrying forward its long-standing suit for $45 million to $50 million in damages against the company that bought the plant from Wisconsin Steel. That company, which failed, will now have its assets distributed by a bankruptcy judge, who is scheduled to hear the case in November.

``It's long,'' Lumpkin says of the case. But ``as long as you fight, you've got a chance of winning.''

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