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SIX - Schenectady, the Declining City: General Electric, Deindustrialization, and Strategies for the City's Renewal

6 Schenectady, the Declining City: GeneralElectric, Deindustrialization, and Strategiesfor the City's Renewal Schenectady developed as an important center of production, research, and innovation because ofhuge manufacturing profits in the late nineteenth century and the growth ofGeneral Electric (GE), home based there, into a powerful corporation. However, in the 1970s, as the economy became more global, U.S. manufacturing faced greater competition from abroad. The economic role ofindustrial cities declined as companies like GE closed their old plants, shrank their labor forces, and started to diversify and invest in other areas of the economy and other parts ofthe world. Deindustrialization in Schenectadywas similar to restructuring in other industrial cities such as Gary, Indiana; F1int, Michigan; Youngstown, Ohio; and Lynn, Massachusetts. Schenectady lost jobs and revenues at the same time that changes in the national economy and government policies deprived the city of state or federal intervention to cushion the blow ofthese losses. A growing trade deficit, an unstable dollar-exchange rate, and rising consumer and federalgovernment debt squeezed budgets at all levels. The proportionally rapid increase of low-paying service, subcontracting, part-time, and temporary jobs broadened income and wealth disparities between people, neighborhoods, and cities. Schenectady's unemployed and poor population demanded public assistance at the very time that the city had less to offer. Residents also found themselves in competition with businesses as the city provided subsidies to attract new industry or to keep existing GE facilities within the community. Once avibrant city, Schenectady went into a decline. SCHENECTADY, THE DECLINING CITY 121 The Rise ofthe Industrial City Situated west ofAlbany on the Mohawk River, "Schenectady undeniably was a daughter ofAlbany, yet there was very litde maternal or filial love manifested by either: on the contrary, there were years ofcoercion, defiance and even caterwauling . Yet Schenectady until 1798 was subject to Albany" (Monroe 1914:46). The two cities still compete. Although for a while Schenectadyexperienced independent economic development, now Albany's economy dominates the region. Schenectady's origins can be traced through the history of its Stockade neighborhood, one of the oldest in the country. In 1661, Arent Van Curler started a new Dutch setdement on the land that he described as "the most beautiful the eye ofman ever beheld" (Bogert 1966:2). This new town was the farthest west and the most dangerous setdement ofthe Dutch. To protect the town, a stockade with a blockhouse at one comer was built around the settlement . From this structure the present Stockade neighborhood derives its name. The stockade itself proved useless: Only a few people and two of the settlement's original houses survived a massacre by the French and allied Native Americans who attacked from Canada in 1690 (Monroe 1914:99). Despite its almost total destruction, the outpost was not abandoned. The settlement slowly recovered; Dutch rule was replaced by British. In 1704, the British built Qyeen Ann's Fort, the first ofa line offorts in the Mohawk Valley (Monroe 1914:104), which served as the focus of colonial Schenectady. Boats coming from Schenectadywere crucial for supplying the western British army and navy as well as the traders with Native Americans working in Ohio, Indiana, Michigan, and the fringe of the Canadian north and west (Hart 1975). During the eighteenth century, Schenectady was one of the most important commercial centers in the Northeast. "Branches of the firm of famous merchant families, Finley and Elias, were located in London, Montreal, and Detroit, but their principal headquarters were their stores at the comer of Union and Ferry Streets in the Stockade" (Monroe 1914:125). The area was lined with wharves, warehouses, and boat-building shops, serving the traffic that plied the Mohawk. Then in 1819, a disastrous fire wiped out most of these establishments, along with a large number of nearby houses, and changed the destiny of the Stockade neighborhood. Business buildings were rebuilt, but to the south and east of the Stockade, leaving the old section almost entirely residential. Mter the Revolution, the old fort was taken down and a market built (now 122 CHAPTER 6 Arthur's Market) to accommodate both Rotterdam farmers and the farms on the great flats (where later General Electric would be built). Schenectady was becoming an industrial manufacturing center. General Electric and Industrial Transfonnation Founded in 1851, a steam-engine factory, Schenectady Locomotive Works (known as the Big Shop) by 1882, shipped 172 locomotives a year and employed more than a thousand...