In lieu of an abstract, here is a brief excerpt of the content:

David Moberg 3 Economic Restructuring: Chicago’s Precarious Balance AFTER SPURRING CITIES across the country into a bidding war for its favors, Boeing Corporation announced, in March 2001, that it was moving its corporate headquarters from its long-time Seattle home to downtown Chicago. Although $56 million in public subsidies brought only 450 jobs, Chicago political and business leaders celebrated the capture of the nation’s leading exporter and iconic global corporation as proof of the city’s intrinsic attractions as a world corporate center (McCourt, Leroy, and Mattera 2003; Reed 2003). On the other hand, relatively little fanfare erupted when Brach’s Confections Inc. announced two months earlier its plans to shut down the world’s largest candy manufacturing plant at the end of 2003. It was easy to see the lossofroughly1,000jobsonChicago’sstill-poor West Side as an episode in the oft-told “Rust Belt” story of a fading industrial past giving way to a postindustrial service and knowledge economy . The company’s transfer of production to Mexico followed more than half a million other manufacturing jobs that, over the decades since World War II, had largely moved out of the central city to the suburbs, to the South, and to foreign countries (Ginsburg, Jin, and McCann 1994). But what looks like a paradigmatic tale of the emergence of a new Chicago economy is not so clear and simple. After all, both Boeing and Brach’s are manufacturing companies. Globally, manufacturing obviously has not died. Neither has it all migrated. At the time Brach’s was closing, metropolitan Chicago had the largest number of manufacturing jobs of any U.S. metropolis. Despite other shutdowns, Chicago was still the candy capital of the country, and even without its once-famous stockyards, it was by far the national leader in food processing. Brach’s was a local icon, cited by Industry Week (Verespej 1999) as one example of why Chicago was the premier location for manufacturing in the United States. But, starting in 1986, Brach’swassubjectedtoawaveofcorporatebuyouts and spin-offs that imposed shifting and disastrous marketing strategies. Despite many years of both pressure and assistance (including $10 million from the city), community groups and the workers’ union could not persuade the changing cast of owners and managers that they could succeed by improving technology and training workers rather than pursuing cheaper workers (and sugar) across the border (Ginsburg , Jin, and McCann 1994; Langley 2003). Attracting Boeing was a public relations coup, but it also raised troubling questions. If the subsidy wasn’t critical, as a key Boeing executive said, what did the outsized enticement say about Chicago’s confidence in its own merits? Might the $56 million have been better spent on improving schools, fixing infrastructure, training workers, or enriching cultural life? Ultimately, Boeing generated far fewer ancillary economic benefits than projected in the rosy, never-released analysis justifying the public subsidies. Another Chicago corporate giant, Arthur Andersen, had prepared the analysis not long before that one-time symbol of Chicago’s strength in business services folded in the aftermath of the Enron debacle (McCourt, Leroy, and Mattera 2003; Reed 2003). Economic Restructuring 33 The city’s roster of corporate headquarters remained mixed, despite optimistic projections that Boeing heralded the beginning of a new era. Starting in 1998, Chicago had lost a string ofheadquarters,suchasAmoco,Ameritech,and Inland Steel, mostly to corporate takeovers.1 In January 2004, J. P. Morgan Chase & Co. bought Bank One, depriving Chicago of the headquarters for its largest bank. Also, corporate headquarterswerenearlyaslikelytobeinthesuburbs as in the central city (Chicago Tribune 18 May 2003); Economic Focus 2002). Nevertheless, both suburbs and city could take comfort in the dramatic growth of business services, such as architecture, personnel, and consulting firms, which provided specialized assistance to the corporate managers of far-flung empires.2 In one of the nation’s fastest-growing employment sectors, with moderately aboveaverage salaries, metropolitan Chicago was either first or second nationally in the number of business service workers, depending on who’s counting (World Business Chicago or the Harvard Cluster Mapping Project), and many of those jobs were in the city. Also, despite its lingering Rust-Belt image, metropolitan Chicago had the largest concentration of high-tech workers of any urban region in the country (and tied with Washington, D.C. for the greatest number of information technology jobs). The city ranked considerably lower in the proportion of all workers in high-tech and in the ratio of high-tech manufacturing to services (whereascitieslikeSanJoseandSeattlerankedat...

Share