Chapter Two: Public and Private Sectors Unite

As the Great Depression of the 1930s unfolded, government leaders played an increasingly larger and larger roles in determining the course of action the private sector would be pursuing in the years ahead. The Roosevelt Administration’s interpretation of Keynesian economics, as reflected through its many New Deal programs, facilitated those close ties, at least initially. The enormity of the Second World War inspired even greater cooperation among the public and private sectors. Much of that new-found cooperation occurred in the wake of the 77th Congress’s passing the War Powers Acts of 1941 and 1942. That kind of resolute cooperation started to break apart in the immediate post-war years when contradictory opinions regarding what direction the U.S. economy should take after the war had begun to sow dissonance and uncertainty among its heated ranks.

Sensing an end to this unheralded cooperation led the liberal faction of the private sector to propose a new, two-prong government strategy. It was directed towards creating a vigorous, more self-sufficient economy once the war had ended. Introduced in 1944, this very practical and precise economic approach would not only assist returning servicemen in securing good paying jobs; but also, help major businesses prepare for the peace time economy that was about to happen. Unfortunately, equally vocal conservative elements within the private sector strongly disagreed with that platform. They wanted a more laissez-faire approach aimed at perpetuating long-term national growth based on current market conditions and not some ill-advised federal stimuli packages.

Luckily, the ensuing fight between those factions of the private sector did not prevent the U.S. Congress from passing the Servicemen’s Readjustment Act of 1944. That important piece of legislation offered direct aid to returning soldiers and their families through what was later referred to as the GI bill. Regrettably, those same Capitol Hill leaders were far less generous when it came to allocating federal dollars to help this nation’s largest industries as they began to make the costly transition from a war time to a peace time economy. Both blocs of the private sector remained divided when it came to whether the federal government should or should not arbitrate on behalf of those large firms wanting to relocate their headquarters from older regions in the Northeast, Mid-Atlantic and Great Lakes regions to newer districts in the South and West.

That hotly contested controversy soon produced two very different schools of thought. One school promulgated by the right wing of the private sector endorsed the premise that large businesses should finance the construction of their-own new headquarters without direct federal assistance. It further suggested that any new construction, of that magnitude and scope, should occur primarily in blighted neighborhoods analogous to older cities found in the Northeast, Mid-Atlantic and Great Lakes. By the mid-1950s, that same conservative group had modified its initial proposal to embrace what it referred to as “indirect federal assistance.” Under this arrangement, those Fortune 500s willing to erect costly, new headquarters in older urban climes should be encouraged to apply for the multitude of new economic and financial incentives available to them through the much-touted, federal program called Urban Renewal.

Title 1 of the National Housing Act of 1949, this Urban Renewal effort in the 1950s and 1960s afforded private investors a golden opportunity of securing large tracts of cleared inner-city land at virtually no cost.^[1] Those supporting such conservative ideas naturally assumed that those highly undervalued inner-city parcels were ideal locations for such large, urban-renewal projects including new corporate headquarters. In fact, the availability of such inexpensive land, mostly on the periphery of established downtown districts, might be the very economic catalyst needed to promote large scale, inner-city revitalization for many years yet to come. Its advocates advised local government leaders to sweeten those deals even further by actively supporting what they called “new opportunity corridors.” Those spacious, tree-lined boulevards would connect new, inner-city Fortune 500 headquarters with outlying limited access highways and high speed rail connectors.

The second school of thought supported by the liberal faction of the private sector recommended a more radical approach towards future urban development. Using the growing political and military tension between the United States and the Union of Soviet Socialist Republic (U.S.S.R.) as its backdrop, this enthusiastic contingent argued that the future success of large corporations might well rest on their readiness to leave older, congested hubs in the Northeast, Mid-Atlantic and Great Lakes regions for newer, more spacious enclaves soon to being developed in Southern and Western states. Those supporting that line of reasoning believed that relocation efforts, like that, would benefit participants in two distinct ways. First, in the event of a war their more remote locations would have far less chance of being destroyed in an all-out nuclear attack. Second, building a new facility with all the latest conveniences and newest technical advances would undoubtedly lead to lower overhead costs over the long-term in that more efficient work spaces would prompt higher productivity. Lower taxes along with the possibility of using surrounding acreage for future expansion and increasing employee output represented a few of the many added bonuses waiting for those companies that willingly relocated from the Rustbelt to the Sunbelt.

Setting aside the many positive economic and financial rewards awaiting those anxious to move to newer places there were also some other negative aspects related to such arbitrary action. The great distant that currently existed between the majority of those new sites and today’s national markets along with the lack of nearby, reasonably-priced suppliers un-categorically discouraged a mass exodus from well-known areas to more far-flung places immediately following the Second World War. Also, the potential financial shortfall of not having sufficient amounts of skilled labor on hand further thwarted those seemingly very noble efforts. However, perhaps the biggest single obstacle to such a move concerned the quality of life found in those outlying districts. In the minds of most mid-century executives, the quality of life in a community, as reflected through its various cultural, religious and social amenities, said it all. An intrinsic part of all urban settings in the U.S., the quality and quantity of amenities found within a location undeniably affected its long range business prospects. The old adage the more diverse and plentiful the amenities within a community the better chances for sustained growth there certainly applied here.

Those immediate shortcomings notwithstanding, they did not, in themselves, stymie the early lobbying efforts made by die-hard business and political leaders from both the Sunbelt. In the 1960s, they instigated a concerted effort to attract new businesses to their respective areas by offering numerous business and government enticements. Although many federal leaders enthusiastically supported their remarkable efforts, the vast majority of Washington insiders knew full-well that other, more pressing economic and social issues would take precedent over their wishes. Those persistent new economic and social issues manifested themselves through a host of specially targeted reforms that began during the Johnson Administration. Known collectively as the Great Society, these administration programs, federally legislative acts and department-led initiatives attempted to improve the daily lives of Americans through valiant efforts aimed directly at ending poverty; eradicating discrimination, improving the environment and lessening crime.

The War on Poverty represented one of the Great Society’s leading programs. It intended to eliminate urban poverty as quickly as possible by using highly respectable methodological approaches to attack its core. An outgrowth of President Lyndon Baines Johnson’s State of the Union Address, delivered on January 8, 1964, the War on Poverty set the stage for an array of other major government reforms that included the Food Stamp Act of 1964, the Economic Opportunity Act of 1965, the Social Security Amendments of 1965 and the Elementary & Secondary School Act of 1965.^[2] The Nixon Administration expanded upon those earlier efforts when it introduced its-own initiative Revenue Sharing.

Officially called the State and Local Fiscal Assistance Act of 1972, Revenue Sharing distributed more than $30,000,000,000 in federal funds to qualified communities initially over a five year time-span.^[3] Its most ardent supporters believed that in addressing the economic and social needs of this country’s most disadvantaged class through specially targeted programs, such as Revenue Sharing, that they would be able to play a most significant role in relieving the suffering of millions of Americans who were forced to live and work in some of our nation’s most economically depressed cities. Those same politicians also hoped that Revenue Sharing might at long last bring to an end the growing cases of civic and social unrest occurring nationwide. That highly publicized federal initiative allocated funds directly to state legislatures who, in turn, dispensed it to targeted communities based on economic need. Sixty-three percent of those funds went to qualifying cities and towns while the remainder remained in the hands of state legislators. In an ideal world, those racially-divided communities with the greatest economic and financial needs would have received the bulk of that funding while more prosperous districts would have qualified for only minimum assistance. Of course, that did not happen.

Taking advantage of Revenue Sharing’s many legal loopholes enabled skillful business leaders and savvy politicians from economically thriving urban areas throughout the Sunbelt to attain a large percentage of those funds. Behind closed doors, those same leaders justified their self-serving actions by claiming that those funds represented an easy way in which to improve the quality of life within their respected districts without having to raise taxes substantially. With that objective squarely in the forefront, political leaders from many prosperous areas applied for favorable status under this act. Once they obtained that status then they began to receive sizeable federal allocations with virtually no questions asked by Washington lawmakers. Most of the funds received went towards improving local education and public works programs. Extended to the fall of 1986, Revenue Sharing allocated more than $86,000,000,000 in public funds over its 14 year lifespan.

In spite of the many economic and financial benefits available to those Fortune 500s willing to relocate to the emerging Sunbelt regions, from the mid-1970s onward, most large U.S. corporations did absolutely nothing about it. Much of their hesitancy to act quickly stemmed from the serious financial reversals they faced resulting from both the OPEC Oil Embargo of 1973 and the Recession of 1974. The escalating costs of operating their many scattered plants and offices generally took precedent over any relocation plans that might have been discussed by their boards earlier. The introduction of a host of new conveniences such as low cost air conditioning, cheaper construction costs and a nearly completed Interstate highway system may have breathed some new life into corporate relocation, but only for a brief period of time.

It is interesting to note here that a similar economic and financial reversal occurring ten years earlier had stymied analogous relocation efforts. It was not an energy crisis or a major recession that decided its outcome then; but rather, the actions taken by the U.S. Congress in the autumn of 1964 that led to the lifting of trade sanctions levied against imported steel. Such congressional action radically altered the primary economic and financial agenda for most large U.S. corporations. In fact, that action by Capitol Hill officials had forced the majority of Fortune 500 firms to refocus most of their energies away from everyday pursuits, which among other things might have included the possibility of moving their headquarters to a new locale.

The sudden influx of affordable, high quality imported steel into what was already viewed as a saturated market quickly destabilized the domestic economy. Closer investigation of those rapidly unfolding economic developments provides some valuable clues as to why that occurred then and why it happened so quickly. Much of the problem stemmed from the reluctance of many Fortune 500 enterprises to confront this menacing problem upfront. Many failed in a number of key areas that included such pertinent things as updating business practices, modernizing modes of production or expanding distribution networks. Had they made serious inroads in one or more of those vital areas then many of the subsequent cataclysmic economic and financial developments might have been avoided.

The slow simmering anxiety so evident in the U.S. business community of the late 1960s reached a feverish boiling point by the mid-1970s when a full-blown recession devastated nearly everything. Characterized by exaggerated, escalating labor costs; double digit inflation, stagflation and shrinking markets at home and abroad, the Recession of 1974 obliged many Fortune 500s to not only develop new business plans quickly; but also, institute more effective marketing strategies immediately. Both those urgent developments endeavored to improve their economic and financial chances substantially in a business environment that was fast becoming untenable.

As was pointed out earlier, many Fortune 500 companies responded to that growing economic and financial predicament by trying to eliminate as many competitors as quickly as possible through what they believed, at that time, to be highly sophisticated, well-organized acquisition and merger plans. Of course, the long-term economic success of any kind of acquisition or merger effort rests principally on the eagerness of those companies, charged with the responsibility of controlling the purse strings, to expeditiously embrace the many lucrative, economic and financial opportunities resulting from their recent adventures. As many corporate heads rapidly discovered acquisitions and mergers did not in any way guarantee sustained economic growth and prosperity even for those stoic corporations that had miraculously survived the first round of dramatic business changes wrought by the abrupt lifting of those government sanctions in 1964.

Many late 20th century business strategists knew full-well that the true key to lasting economic and financial success existed in the capability of their mega firms, responsible for launching such large scale acquisitions and mergers, to be able to successfully reduce their mounting overhead expenses whenever necessary while simultaneously expanding their profit levels. The growing volume of new items and services that flooding the open market following their most recent acquisition or merger activities, should have been sufficient to offset any appreciable financial losses they might have incurred during that interim period of business readjustment. Practically speaking, well-planned acquisitions and mergers should be an indispensable part of any protracted economic growth for enterprises actively engaged in such speculative ventures. If that was not the case, then why did so many companies repeatedly expose themselves to the many economic and financial dangers and risks akin to such practices?

Supervising such speculative business activities during a bull market extraordinarily improved the chances of long-term economic and financial prosperity for shrewd corporations able to successfully manipulate the system in their favor. However, many of its staunchest supporters conceded that any sudden fluctuations in the stock market during that proactive period might prove financially disastrous for nearly any Fortune 500 firm involved in such actions and chiefly for those with less than sufficient liquidity. The plethora of new management options introduced by leading efficiency experts such as Bill Bane, Peter Drucker, Rajai Gupta, Bruce Henderson and Max Widenman, embracing the second half of the 20th century, rarely focused on routine business matters. Yes, theoretically they were very much interested in building up rapidly depleting capital reserves and better managing the barrage of human resources issues that deluged corporate America on a daily basis. However the everyday world of business demanded much more from them than just simple guidelines any knowledgeable leader in business already possessed. Practically speaking these highly attuned business practitioners spent the bulk of their time promulgated a wide range of new and unique business formulas and economic theories intended to improve overall management skills on all levels quickly. They achieved those very worthwhile business aims by advocating new, riveted goals and objectives to anyone who cared to listen. Many of those previously untried approaches made very courageous efforts to mitigate the unprecedented increases in business expenses that might have been the by-product of a number of unsavory things such as excessive inventories, meager lines of credit or runaway inflation.

Specifically, those new efficiency measures ascribed to closely monitored, rigidly controlled business patterns customized for the special needs of participants. With very rare exception, they were aimed towards achieving certain, limited business goals and objectives. Furthermore, they strongly endorsed the idea of clearly defining any-and-all new business functions critically assigned to influential employees and astute managers in order to avoid any potential conflicts or confusion at crucial stages later-on. The idea of “Social Responsibility” became an integral component of many of those theories. Many efficiency experts insisted that big business owed its many consumers much more than just a steady stream of controlled products and services. Attuned enterprises must also constantly improve both their products and services based on real, not alleged, needs and wants expressed by their many satisfied customers. Regularly administered questionnaires and surveys, representing a true cross-section of their customer-base, should elicit what the public needs and want. If done properly, those surveys should play a key role in determining the extent of necessary changes and when they should be introduced to the buying public.

Those draconian methods apparently work well for some Fortune 500s at least at the outset. Internally driven business controls, they covered a wide range of things from monitoring annual inventories and limiting labor contract concessions to periodically readjusting stock values based on changing market needs and reducing the workforce during downtimes. Closer analysis on what economic and financial considerations might have prompted those corporate leaders to radically depart from the business norms of the day indicates that perhaps other, more sinister economic and financial forces were compelling them to think outside the box. Fearing even greater foreign competition soon compounded even further by other harsh realities such as escalating overhead costs and greater demands by organized labor for higher pay jobs with more fringe benefits appeared to have overwhelmed them. Many Fortune 500s responded by scurrying around to find some reasonable solution to their ever mounting economic and financial woes. Those new cost effective approaches directed towards improving their bottom line speedily seemed to address their immediate need for a quick remedy to their innumerable problems wrought by new and unprecedented economic and financial uncertainties.

Periodic recessions throughout the 1950s and 1960s had taught big businesses some very valuable lessons. First, they learned that they must be prepared at all times for major changes prompted by their highly volatile, yet very loyal consumer-base. Second, they discovered that the pressing need to outpace the sudden, post-war deluge of eager new competitors forced them to become even more aggressive when it came to pursuing large numbers of new customers on an annual basis. Third, most domestic companies that successfully immersed themselves in the latest technological advances soon found that they not only fared better financially than those that did not; but also, more often than not successfully overcame the many new economic and financial challenges posed by their knowledgeable competitors. Those lessons proved uniquely beneficial for traditional firms in that many of their latest rivals increasingly respected both their determination and resourcefulness by not infringing upon their customer territory at least temporarily.

That mutual respect among rival companies may not have lasted long; however, it did afford some time for resilient local enterprises as they struggled to maintain their thin economic and financial edge in a highly competitive world. That realization that the business world of the 1950s and 1960s was fast becoming little more than a hodgepodge of different kinds of enterprises characterized by vastly different economic goals and financial objectives meant that knowledgeable domestic firms could no longer sit on their laurels. Those corporations wishing to remain active participants in the world of big business soon recognized that they had to maintain more than sufficient capital in reserve in the event that the domestic economy should suddenly sour.

In addition, there emerged an informal business understanding among smart competing corporate heads that their company’s survival might well depend on their ability to readily slash overhead costs while retaining respectable profit margins. That was no easy task to achieve even in the best of economic times. In the overall scheme of things, those leaders seemed to recognize that the future prosperity of their enterprises specifically and the U.S. economy generally rested with the members of the private sector being able to do the right thing whenever called upon to do so. Whether they always met those expectations was another entirely different matter.

The new economic and financial problems they confronted in the 1970s and 1980s were like no other era with the possible exception of the Great Depression. That economic and financial realization so visible to even the most casual observer appeared to elude some of this nation’s leading corporate heads until it was nearly too late. The lure of unprecedented high profits with only marginal increases in overhead costs, due primarily to tightly regulated, moderate increases in inflation throughout the 1950s and 1960s, blinded many of this nation’s business leaders from the economic truth. In effect, many remained incredulous until they felt the total impact of the harsh economic and financial reversals occurring in the late 1970s and early 1980s. For many engaged on the national scene that was too late. The high number of bankruptcies recorded in those two volatile decades substantiated that very basic business premise. Many of those large U.S. corporations able to survive that monumental ordeal continued to display an unconscionable fear of pending economic and financial doom for years to come.

The severe aftermath of the Oil Embargo of 1973 and the Recession in 1974 convinced many naïve business leaders to embrace one or more of those rather harsh management tactics. They hoped their actions in that regards might resolve many of their current pressing problems soon. Such capricious behavior, on their behalf, ran counter to older, more common sense economic and financial approaches. Those earlier, proven plans had encouraged large corporations to be extremely cautious when it came to following new and untested business guidelines. As many major businesses quickly discovered the cure for the disease was far worse than the ailment itself. In their attempt to remain efficient at nearly any cost, many of the leading U.S. companies had unwittingly stifled their-own creative juices when it came to developing and marketing a steady supply of new products or innovative services.

Their growing hesitation to fully embrace those revolutionary business changes, beginning in the mid-1960s, played directly into the hands of credible foreign corporations. With rare exception, those overseas companies took full economic advantage of the growing ineptness displayed by many U.S. businesses when it came to successfully meeting the many needs and wants of consumers worldwide. In this particular instance, the corporate cultures unique to many foreign enterprises enabled them to revamp their procedures and marketing strategies swiftly. Their uncanny ability to change on literally a moment’s notice provided those new, highly competitive corporations a decided business edge over their stodgy U.S. counterparts.

From the domestic perspective, the incorporation of those new, efficiency oriented business axioms directly into America’s corporate lexicon did very little to ensure future economic growth for many Fortune 500s actively engaged in such efforts. With time, that growing business quandary compelled many large corporations to set aside their recently discovered managerial theories in order to adopt more reliable, less probing economic and financial approaches of the not so distant past. Relentless competition waged from what appeared, at that time, to be an innumerable number of highly profitable foreign companies prompted that hasty retreat from modern theories to more sensible policies and procedures of an earlier era. Also, the stark realization that nothing would ever be the same in the business world due to the lingering economic effects of both the OPEC Oil Embargo of 1973 and the Recession of 1974, led many corporate leaders to reject the inevitability of change much to their disappointment.

In the final analysis, many of the largest U.S. corporations that had strayed away from traditional business procedures in order to adopt those new managerial procedures and strategies quickly returned to more acceptable business practices, and why not? It seemed the logical thing to do in this new, uncertain international market setting. Once back in the fold, most of those same large companies went about customizing conventional procedures with the intent of better suiting their many new economic and financial needs. The Millennium found many Fortune 500 corporations maintaining what they considered to be an acceptable balance between annually recording profit and losses, on the one hand, and fulfilling the new, emergent government environmental mandates, on the other. The one exception to the rule occurred within the high-end of the U.S. retail sector where many of them surprisingly followed a totally new tactic. Apparently, that most recently developed strategy worked quite well. By simultaneously raising the prices of many of their most popular luxury items while liquidated other things such as their less than profitable subsidiaries, many high-enders uphold a new, business equilibrium. That equilibrium had eluded them for many years.

To uninformed outsiders, business actions of that depth and nature might have appeared to be little more than elaborately staged maneuvers or ingeniously executed business schemes intended to quiet the growing anxiety expressed by some of their largest investors, and to a certain degree they were correct. After all, few levelheaded, traditional retailers would have condoned such impulsive business behavior especially if the economy was in an expansion mode. Critics argued that any potential profit advantages that might be derived from such maverick activities would not be justified over time even if the company, in question, enjoyed an immediate and possibly sizable windfall from such actions. Opponents pointed out that the idea of pitting one component of a corporation against another with the expressed intent of generating some kind of short-term bonus from both while possibly sacrificing both did not make a great deal of sense. Yet, many conservative minded, high-end retailers in followed just such a course at the turn of this century. Surprisingly, the economic results of their cavalier actions were mostly successful.

Most late 20th century vendors believed that business cunning and economic prosperity were one-and-the same. This led many high-end rollers to repudiate any forms of traditional retail thinking that might have supported the notion that any unexpected price fluctuations within the existing luxury market would inevitably result in an overall drop in sales for shop owners engaged in such endeavors. That line of reasoning soon lost much of its credibility due to a totally new, highly more flexible retail sector that suddenly burst on the scene in the mid-1980s. This new phenomenon led to a sudden resurgence in the sales of very high priced luxury goods the likes of which had not been felt by the multitude of U.S. retailers since the flamboyant buying sprees that characterized the 1920s. Specifically, this resurgence catered to the many fancies and whims of a brand new, super wealthy class of consumers who seemed to have unlimited financial resources at their disposal.

The ability of this new elite class to purchase virtually any commodity, it wanted, at any time, regardless of price resulted in sizable profits for those retailers able to take the many decided financial risks involved in such speculative actions. What distinguished this new retail phenomenon from others in the past was the fact that any sudden fluctuations in pricing did not seem to adversely affect overall sales activity for its many participating stores. At long last, jewels and junk could be sold successfully within the same retail outlet. On the other side of the corporate ledger, the likelihood of profiting handsomely from selling under-performing subsidiaries belonging to that same retail sector increased significantly by the 1990s. The old business adage that two vastly different elements within the same business cannot work at cross purposes without creating some kind of lateral economic or financial damage proved to be entirely false. Most importantly, in casting aside traditional business norms many Fortune 500s now had a unique opportunity that allowed them to test various new market strategies and selling techniques without exposing themselves to a great deal of economic or financial danger. It proved to be a win-win situation for everyone involved then.

Interestingly, only a handful of U.S. economists seemed panic-stricken by the overwhelming popularity of these non-conventional practices. In fact, many extolled their merits by claiming that they were especially beneficial for ambitious, mid-sized firms who wanted to increase their market capabilities as soon as possible. The majority of analysts contended that such flexibility, best exercised in times of grave economic concern and financial need, embodied some of the finest business principals readily adapted to the perilous local business scene. By the turn of this century, many highly respected business leaders lauded its appropriateness on a multitude of levels but most especially in terms of its rapid technical advancements. In many cases, record economic spurts of one kind or another set the stage for major advances that soon unfolded. Broadening a company’s domestic or international perspective by relocating its main offices to a more desirable locale might give an illusion of great economic and financial flexibility without that firm having to orchestrate any costly changes that might or might not pan out over the long run. All of that soon played out on the international economic stage with results varying considerably depending on the economic resiliency of the individual corporation involved in such activities.

By the Millennium, conventional business wisdom strongly suggested that it would only be a matter of time before most Fortune 500 companies would gladly leave the confines of older Rustbelt cities and towns for newer Sunbelt communities. As appealing as that idea might have been for some firms, most large corporations rejected it outright. In fact, only 13% of the Cleveland Fortune 500 endeavors have left since the mid-1950s. The continual attractiveness of Cleveland as a corporate center has not declined over the years even if many of the original Fortune 500s are no longer operational.

Undeniably, suitable locales are an indispensable part of nearly all successful ventures whether big or small. Most of the large cities in the Northeast, Mid-Atlantic and Great Lakes regions still amply fulfill the many economic and financial demands placed on them by corporate America’s growing leadership. Of course, the same might be said about newer urban centers in Southern and Western states. In the final analyst, the corporation itself and not some amorphous, outside economic or financial influences ascertain the practicality of an enterprise leaving a familiar place for the unknown. However, one thing has remained crystal clear over the past six decades. Most Fortune 500 businesses have followed their-own keen instincts and have remained in traditional urban settings, such as Cleveland, rather than take the chance of relocating to newer sites.

That being said, the many economic and financial anomalies that characterized the national business scene, especially during the 1970s and 1980s, closely resembled the underlying economic energies that still impact our global economy right to the present day. Similarly, the downward economic and financial spiral experienced by a large percentage of the U.S. business community during the height of the Recession in 1974 closely resembled the substantial losses incurred during the current pandemic. Those Fortune 500 ventures with great economic and financial vision generally survive the many economic and financial pressures thrusted on them during periods of major recessions. However, the same cannot be said about other, less prepared operations that frequently succumb to those impinging economic and financial forces.

Before investigating some of the foremost developments affected many Cleveland Fortune 500 firms and their impact in determining headquarters choices, it is important to lay to rest some inaccurate notions pertaining to the number of enterprises that have left that city over the past six decades. As previously pointed out, the number of viable ventures that have relocated to other urban climes in the Sunbelt remains small. Part of Cleveland’s enduring success as a leading Fortune 500 community resulted from unrelenting, locally inspired business pressures. Begun during the post-war period, those added burdens concentrated primarily on the critical dos and don’ts of modern business as local leaders perceived them at crucial junctions. They ranged from operational efficiency and market visibility to higher profit margins and lower overhead costs. Not exactly breakthrough ideas in themselves, they nevertheless perplexed some business leaders who remained wedded to traditional approaches when it came to such issues as expanding one’s business. Not knowing the best way in which to maneuver around what appeared to them as endless new business minefields compelled many traditional corporate heads to enthusiastically endorse conservative business practices rather than subscribe to the newer, more radical approaches that were gaining a substantial new following by the 1950s.

A new component further confused this situation. Starting in the 1980s, corporate stakeholders began to enjoy a far wider choice of lucrative investment options. Those choices ran from financing extensive automated production schemes and participating in new Wall Street capital ventures to investing in on-line commerce and benefiting from large-scale outsourcing. Those latest investment opportunities furnished what appeared, at that time, to be an endless supply of exciting business ventures geared specifically for those very hardy investors brave enough to assume the inherent economic challenges and risks involved in such endeavors. Regrettably, burdensome economic and financial uncertainties repeatedly plagued many of those potentially lucrative, new undertakings. Putting aside the innate business uncertainties that faced speculators wishing to invest in such untested enterprises, there were other, equally-pressing problems confronting corporate America throughout the 1980s. Increasingly, conservative leadership warned unsuspecting investors of the many pitfalls related to new, unscrupulous business rivalries that had suddenly appeared on the domestic horizon. Affluent overseas economic interests had fomented a great many of those new rivalries. These ruthless competitors were determined to purchase as many of our nation’s most profitable big businesses as quickly as possible. Conservative leaders went a step further by alerting venture capitalists to the phenomenal rebound currently being experienced among the wealthy, global connected financial, retailing and service sector and how that emerging trend in business might adversely affect future investment prospects both in the U.S. and abroad.

Conservative leaders expressed mounting concerns that a large number of domestic based investors might be convinced to invest heavily in the growing number of highly questionable global enterprises rather than sink their hard-earned cash into reliable local entities including the iron and steel industry. That possibility of a complete and total switch in investment strategies did not escape the attention of alert corporate heads. They carefully followed the economic progress of those budding trends as they unfolded. In the case of Cleveland, local Fortune 500s tended to air on the side of caution, which meant that they did not invest substantially in uncertain undertakings even though those business trendsetters continued to yield remarkably high returns. The reluctance of many Cleveland Fortune 500s to invest heavily in such speculative enterprises significantly lessened the chances that those same businesses would be relocating to the Sunbelt in the foreseeable future.

Many Fortune 500 companies remained in this Midwestern community for very practical reasons. Like so many other, time-honored cities throughout the Northeast, Mid-Atlantic and Great Lakes, Clevelanders savored their hard-earned reputation as a top rated cultural, educational, health and manufacturing center for over 150 years. Repeatedly praised by countless domestic business leaders for its affordable, proficient labor force; copious natural resources and easy access to national markets, this popular city still retains its high ranking among its peers right to the present day. More importantly, the positive interaction that exists between Cleveland’s corporate community and its many municipal governments is still considered outstanding in a world wrought with economic and financial uncertainty.

Understanding the positive business attributes responsible for much of Cleveland’s ongoing prowess as a top Fortune 500 city helps to explain why so many large firms are still located there. It might also elucidate how well defined, self-interest along with unbending self-motivation, have worked in harmony to create a much cherished local economic base. Maintaining that solid base is essential if Cleveland plans to continue to add to its already longstanding reputation for business excellence. Like so many other U.S. cities and towns, Cleveland’s origins were modest. Founded in 1796 by a Revolutionary War General named Moses Cleaveland, this urban enclave typified one of numerous outposts carved out of what was once a very bleak wilderness known as the Western Reserve of Ohio. Its remote location prevented it from becoming a regional shipping port until later. The decision by the Ohio Canal Commission to designate Cleveland as the northern terminus for its Ohio & Erie Canal radically altered its economic future beginning in 1825. Over the next quarter of a century, Cleveland served principally as a transfer point and storage center for food stuff and manufactured goods being shipped to and from the Ohio River Valley. The sudden wealth generated by this energized trade soon spread throughout Northeast Ohio.

This area’s continued economic growth also encouraged a new and unbreakable business spirit. Cleveland’s solid banking interests and its ever enterprising shipbuilders purposely cultivated that positive temperament. The high ethical and moral standards they established from the outset soon became the accepted business norms for everyone doing business within this fast-growing enclave. Those same positive business virtues spilled over into that area’s burgeoning cottage industries. Their very highly praised products and impeccable customer service left their indelible mark on Cleveland’s early 19th century development. Individually owned and operated commercial endeavors prevailed well into the 1850s even though significant economic changes were looming on the immediate horizon.

The astonishing success of the national railroad system, from the 1850s onward, afforded a multiplicity of new and rewarding opportunities for local entrepreneurs able to capitalize on them quickly. In this instance, the railroad’s insatiable appetite for all kinds of standardized metal products led to the erection of profitable, warehouse-like manufacturing plants on either side of a 12-mile stretch of the Cuyahoga River known as the Flats. Positioned halfway between New York and Chicago and midway between the recently discovered iron deposits in the upper Lake Superior region and the new market centers rapidly emerging in the South and West, Cleveland soon shed its regional commercial interests to become a national manufacturing center.

The uncanny ability of those primed factory owners to obtain sufficient capital for their ongoing expansion efforts guaranteed that hub’s sizable lead over other, similar Great Lakes cities and towns. Cleveland’s affordable lifestyle, reliable workforce and low-priced land all but assured its future importance on both the regional and national levels. In fact, its sizable economic and geographical advantages guaranteed steady growth well into the 20th century. Both the 1940 and 1950 censuses ranked Cleveland as this nation’s sixth largest city. It held that prestigious ranking into the 1970s.

This most adept Great Lakes urban center also produced a plethora of equally profitable consumer related goods. They ranged from auto parts, chemicals, furniture, lubricants and oils to nuts-and-bolts, paints, specialized tools and varnishes. This lively city also served as a leading banking and insurance center as well as the home of several nationally recognized law firms. With all that going for it, local leaders were not at all surprised to learn that one of this nation’s foremost publications Fortune Magazine featured a number of Cleveland’s most prominent organizations in its first 500 business listing.