< 'Glass House' Chronicles The Sharp Decline Of An All-American Factory Town

DAVE DAVIES, HOST:

This is FRESH AIR. I'm Dave Davies in for Terry Gross who's off this week visiting family. We heard a lot in the presidential campaign about anger and frustration among working-class voters in America's heartland. Today, we're going to focus on one factory town in central Ohio that was once a bustling center of industry and employment, but is now beset by low wages, unemployment and social decay.

Lancaster, Ohio, isn't just a research subject for our guest, Brian Alexander. It's his hometown. His new book tells the story of the company that was once Lancaster's largest employer. The Anchor Hocking glass company was a Fortune 500 company with its headquarters in the town. The company provided jobs, civic leadership and community pride. Its decline, Alexander argues, isn't just a product of increased competition and changing markets. He says the firm was undone by Wall Street investors who had little knowledge of the company and little interest in anything besides short-term profit.

Brian Alexander has written three previous books about aspects of American culture and has written for a variety of publications including The New York Times, Science, Outside and Esquire. His new book is "Glass House: The 1% Economy And The Shattering Of An American Town." Brian Alexander, welcome to FRESH AIR. You did a lot of reporting for this book, but it wasn't just reporting. You grew up in Lancaster?

BRIAN ALEXANDER: I did grow up in Lancaster, yes.

DAVIES: Yeah. What's your relationship with the place been over the years?

ALEXANDER: I've loved the place. I always loved the place, even when I was graduating high school and knew I would be going away to college and probably would never live there full-time again. It was an emotional experience to leave. I'll never forget the Christmas before I left. I had served midnight mass at St. Mary's Catholic Church, and I was driving back home after mass. And it had snowed a lot during the service.

I stopped at a stoplight at the corner of Cherry Street and Pleasantville Road which is a main intersection in town, and the town was absolutely still because of the snow - acted like a sound barrier. I looked around at all the lights and everything. And I let the stoplight just sort of turn green and red and green and red a few times, and I started to cry because even though I wanted to leave the town, it was my town. And I knew that I was never going to feel that same way about a place ever again.

DAVIES: You describe it as an all-American town. When was it an all-American town and in what way? What do we mean by that?

ALEXANDER: Well, you know, it's interesting. I think it's always been an all-American town and still is in some of its negative respects now. But I think what you mean is that what Forbes magazine meant, so in the - after the war - after World War II, Forbes devoted almost its entire 30th anniversary issue to Lancaster, Ohio, of all places, and positioned Lancaster as the epitome and the apogee of the all-American town, a sort of perfect balance between large industry, agriculture, small businesses like retail and merchants and so on, workers, a kind of gentry and that everything was in a - this state of almost utopian equilibrium.

And for the most part, it really was like that, which is not to say there were not problems. There's always been problems. There's always been small-town scandals, and there's always been an element of poverty, a fair amount of drinking in Lancaster. My grandfather used to say that he was an old glassman from Western Pennsylvania, and he would come to visit. He would say that he never saw a town with more churches and more bars.

DAVIES: (Laughter). Now, Anchor Hocking was this big glass manufacturer. Just describe this company a bit, how big it was, what kinds of stuff it made.

ALEXANDER: At its peak, Anchor Hocking was the world's largest maker of glass tableware, the second largest maker of glass containers - beer bottles, peanut butter jars, mayonnaise jars and so on. It made other kinds of glass, too, like the little domes that went over electric meter covers, you know - the electric meters. It had 40 plants - could be a glass plant, but it could also be an office, it could be an R&D, it could be a distribution center. But they had 40 facilities all over the United States.

DAVIES: And it's - I guess an important part of the story is it didn't just have production plants in Lancaster. The headquarters were there. The executives lived...

ALEXANDER: Precisely. So you had a core of college-educated, sophisticated people who made good livings, working right downtown at the corner of Broad and Main Street. And more importantly, in some ways, their wives - because their wives - remember this is '40s, '50s, '60s and into the '70s - their wives typically did not work at a career-type job outside the home.

They threw themselves into the town, so they did hospital benefits. They did benefits for preserving the old antebellum homes in Lancaster. They did vaccination drives. They made sure the sidewalks got repaired, the streets got paved. They attended city council meetings. I mean, this was a core of civic leadership.

DAVIES: So there's a real and civic investment in the town not just economic gain. One of the things that you note is that the infrastructure that makes a town work - building new schools or hospitals - that happened in Lancaster and citizens taxed themselves to do it.

ALEXANDER: They did. When natural gas was discovered in Lancaster, the citizens got together and formed their own municipal gas company, their own water company. When they decided that they needed a hospital in the teens - 19-teens - they got together, and they passed a hospital levy. When it came time for new schools, they got together and said we need new schools. So they did it. They taxed themselves, and there was a great willingness to do this.

DAVIES: Now there were thousands of blue-collar workers in the town working in Anchor Hocking's glass manufacturing plants and others...

ALEXANDER: And others, yes.

DAVIES: ...And there were wealthy or better off white-collar employees. Did the executives and their workers drink in the same bars?

ALEXANDER: Absolutely. So for - you know, I told - I was sitting in this particular bar that I used to sit in when I was in my youth called Old Bill Bailey's it's on the west side. And I heard all kinds of stories about, you know, hey, Elwood was in here back in, you know, '75. And I got hired because Elwood was a vice president, and he was in there drinking beer and singing songs with the glass guys. It's not to say that everything was always harmonious. I mean, there were definitely union management fights and so on and so forth. But more than one person told me stories about getting hired by one of the executives inside a bar.

DAVIES: It sounds like an idyllic town in so many ways, often in an industrial setting, things are gritty and tough and hot and sometimes dangerous. Could you take us inside the glass plant, one of these for a moment and just give us a sense of what it looked like, how it worked?

ALEXANDER: What you said is true. It is gritty. It's often dangerous even. It's old, and yet I think it's important to note that a lot of guys really like working in there. They may complain about working in there, but when you listen to them talk, they actually love their jobs partly because it's kind of so extreme.

And so here's why it's extreme. There are two ends to a glass plant, the hot end and the cold. The hot end is really the business end where minerals come in - melted in big furnace, comes out, and it's taken to mold machines. And guys operate these machines to make product or what's called ware. There's fire everywhere. There are flames bursting up. There's a long tunnel called a lehr where the annealing process takes place. There's fire jutting out from that.

There are - a mold station, for example, where a glass baking dish is made in a glob of lava-like glass flows into the mold, and a plunger comes down and shapes the glass into a baking dish and a burst of fire comes out of that. And so when you're in the hot end of Plant 1, everything is dark, partly because it's old, and the machines are dark. And you see all these flames, and you see men silhouetted against all these flames. It's an incredibly impressive thing to see.

DAVIES: Brian Alexander's book is called "Glass House: The 1% Economy And The Shattering Of An All-American Town." We'll continue our conversation in just a moment. This is FRESH AIR.

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DAVIES: This is FRESH AIR. If you're just joining us, we're speaking with Brian Alexander. He's written a new book called "Glass House." It's about a manufacturing town in Ohio - Lancaster, Ohio - and how it suffered as the financial practices in America changed.

So Lancaster was a town that provided employment at living wages. There was a social compact between the owners and the workers that worked for the community. And what we're going to talk about and what the book talks about is how that changed and disintegrated. And we'll get there, but first, just for a glimpse of Lancaster today, you know, you open the book by talking about a guy named Eric Brown who's a police officer, a police commander. And it's rare to see a cop cry, but he - tears come to his eyes talking about Lancaster. Tell us about him and what so troubled him about what's become of Lancaster.

ALEXANDER: Eric - Eric's a great guy, first of all. He was the commander of the MCU - the Major Crimes Unit - which is a multicounty task force that comprised of member agencies. Eric grew up in Lancaster, was a local football star at the high school, tried his hand at big-time college football, decided that wasn't going to work for him. So he came back to Lancaster to become a sheriff's deputy and then joined the Lancaster Police Force, worked his way up and eventually became a commander.

I think what upsets him is he - like so many people that I interviewed and spoke to in Lancaster and like me really - they still love the town. And so it's heartbreaking for them to see some of Lancaster's problems. And Eric knows probably better than anybody that it's not just drugs. Drugs are a very serious problem in the town. There's no question about that. But I think he believes that drugs are a symptom of some sort of larger, rather vague and nebulous problem that he cannot control. There's nothing he can do about this problem or series of problems.

And I think it leads to an enormous level of frustration because he still has big stakes in the town. As he says, his son is still there. His son is still raising his family there. His in-laws are there. He's invested personally in the fate of the town. And when you feel there's nothing you can be doing and you meet this frustration, it's got to find an outlet. And he sort of teared up a little bit in the middle of our conversation in a bar.

DAVIES: He's arresting guys he grew up with and their kids, I assume.

ALEXANDER: Yeah. Yeah. I mean, you know, this is a town where you know people, and so people you know and have known all your life - or you knew their fathers or their uncles or their cousins - you end up meeting these people in the back of a squad car or in a police office or in a jail.

DAVIES: You know, there's a familiar narrative about industries of the Northeast and Midwest that, you know, they enjoyed prosperity in the post-war years when America was dominant and everybody wanted American products. And then over time, there was competition from foreign manufacturers and from other regions of the country that offered union-free, low-wage labor. And a lot of these companies had old plants that were expensive to run and maintain and kind of lost out in the competition. To what extent does that describe what happened to Anchor Hocking, this glass company and the businesses in Lancaster?

ALEXANDER: That is - all that is an element. Absolutely. It's all an element. When you can pay a foreign worker a third or less of what you're paying a unionized Flint glass worker in Lancaster, that's an element. But it's far from the only one. There's - we seem to have this shrugging shoulders belief that this is all some sort of natural evolution - like how the dinosaurs died. But what I'm trying to argue in the book is that some of this at least in part results from a series of conscious decisions.

DAVIES: Right. Decisions by, well - let's get to the...

ALEXANDER: Yeah. Politicians, economists, businesspeople, financiers.

DAVIES: And a change in the way the country's economy works, the way financial systems work.

ALEXANDER: Right.

DAVIES: So let's go through some of this. When did outside financial interests first pose a challenge to the management of Anchor Hocking, this giant of a company?

ALEXANDER: The first time was Carl Icahn. So it's the 1980s. Carl Icahn has really just begun his career of what became known at the time as greenmailing.

DAVIES: Corporate raiding, taking over companies...

ALEXANDER: Corporate raiding. Saying, you know, I've just now bought 5 percent of your stock. I want to see it on the board. You're running your company in a lousy way, and so I'm going to come and make all sorts of trouble for you. But, you know, if you want to buy me out at a profit, at a premium, well, maybe I'll go away.

And so that's exactly what happened with Carl Icahn. Carl Icahn bought over 5 percent of the stock of Anchor Hocking, agitated the board saying, you know, you need to make some different decisions. You could be returning more shareholder value. And was eventually bought off at a - what I calculated to be about a $3 million profit to Carl Icahn. That episode did not last long. But I argue that it changed Anchor Hocking forever from then on.

DAVIES: In what way?

ALEXANDER: It scared people. For 80 years, Anchor Hocking had been this very boring, widows and orphans, old-time manufacturer. Everybody had an Anchor Hocking measuring cup. Everybody had an Anchor Hocking glass or a baking dish in their home. It was just there. It paid dividends every year. Nobody paid attention to it. Now suddenly, Carl Icahn has done what's called putting it in play.

And this is a term of art where business becomes a game. So Anchor Hocking now is in play. And it draws the attention of Newell partly because in its panic, Anchor Hocking sold off its container division. All those beer bottles, mayonnaise jars, peanut butter jars and so on - that was about 50 percent of the income of the company, so they essentially have the value of the company making itself a much smaller target in what is now an ocean full of sharks.

DAVIES: And there's a business principle behind this idea that I, as an outsider, can look at a company and see something that I think I could do better or that it isn't doing well enough. What's the business principle behind the idea that this corporate raiding is a good thing?

ALEXANDER: Well, the argument that activist investors often say - and, look, sometimes it's true - is that CEOs and executive officers and even boards become complacent and lazy. They don't look at how to better make the company more efficient, have increased sales, what have you, better corporate strategies. I don't deny that at times that might be true.

Anchor Hocking did make some mistakes on its own before Carl Icahn ever got there. And so he may have had some legitimate argument in that. I'm sure he would say he did anyway. And so they say that they make the American economy more efficient. The other side of the argument is that they hold people up, and they take money. And they walk away.

DAVIES: So in the 1980s, the company is bought by some - by the Newell Corporation which was this manufacturing empire. And...

ALEXANDER: Right.

DAVIES: ...That had some serious effects on the company in the town. What happened?

ALEXANDER: Right. Well, Newell buys it, and - in what was a hostile takeover. It's still a little bit mysterious exactly how hostile it was. But they buy it in a hostile takeover, and the first thing they do is fire all the executives and close down the headquarters.

So now you have gutted a core group of people that were active in the life of the town. As one person of Lancaster, an old timer, who I interviewed said, it ripped the heart out of this town. So you've taken away the executives, you've taken away their wives, their families, even some of those people who stayed there, of course. Not everybody left, but many of them did leave because they were too young. They had to go find a job someplace else. So leadership class is no longer there.

DAVIES: And from Newell's point of view, you know, this is one company among many they own. Why would they need many headquarters? So there's a rational basis for them, but devastating for the town.

ALEXANDER: Devastating for the town, and the new incoming people, the people that Newell picked to run Anchor Hocking never lived in Lancaster. They all lived in Columbus. There is a long-standing belief, unshakable belief that Newell instructed its incoming executives to not live in Lancaster, so as not to be involved in the United Way and other Lancaster civic activities.

I found - I could not find any proof of that, but you cannot shake Lancasterians' (ph) belief that that was in fact the case. In any way, they all lived in another town. They did not live in Lancaster. They were not active in Lancaster.

DAVIES: And what about workers, the number of people employed, wages, benefits?

ALEXANDER: Workers will tell you that Newell was not a bad employer. They were not necessarily unhappy under Newell. It wasn't the same. It was less of a family atmosphere. That - workers who are hourly people and salaried people all say the same thing. They say that the company became somewhat more efficient, that they made money, they made money for Newell, that they were not unhappy under Newell. But it didn't feel like the old Anchor Hocking, and, of course, it never would again.

DAVIES: Brian Anderson's (ph) new book is "Glass House." After a break, he'll talk about how Lancaster voters responded to President Thomp's (ph) message, and we'll remember Bharati Mukherjee who died last month. I'm Dave Davies, and this is FRESH AIR.

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DAVIES: This is FRESH AIR. I'm Dave Davies in for Terry Gross who's off this week visiting family. We're speaking with writer Brian Alexander. His new book "Glass House" is about his hometown Lancaster, Ohio, a once bustling factory town whose largest employer, the Anchor Hocking Glass Company, has declined due to market forces, and, he argues, mismanagement by a series of Wall Street investors who bought the firm.

In 2004, Anchor Hocking, the glass company's bought by Cerberus this private equity group And I - this is worth going over in just a bit of detail what happens under this private equity group. But let's just, first, clarify a couple of terms. What is private equity? What is its goal and its business model?

ALEXANDER: Well, the basic business model is that, I'm a private equity guy. I go out and I try to find investors to create a pool of cash. So I go to pension funds, I go occasionally to very wealthy individuals, I go to other money managers, and I say, give me money. I'll form a pool. And I will go out, and I will buy a variety of companies, help these companies operate and so that, at some point, we can exit the company, either sell it or have an IPO and make a profit. And I'll return that profit to you.

DAVIES: Right. So in theory we're buying companies and maybe combining them with other companies, but making them perform better, increasing their value and everybody makes money. Let's see how it worked in Lancaster, Ohio. To buy Anchor Hocking, the glass company, they formed a company called Global Home Products. And then, that company borrowed a bunch of money to buy Anchor Hocking and some others. So Anchor Hocking now finds it's owned by a new company, but it has all this debt because money was borrowed to buy it. What's the effect of that debt on this company?

ALEXANDER: Right. I mean, private equity is essentially a rebranded version of leveraged buyout. So the effect of this debt is you've now got to pay interest on the debt. And that's an enormous expense because the debt can be huge. And it can shackle you. You also might have to undergo things like selling off some of your assets as a way to attack the debt, which can then hamper things like marketing, research and development and so on.

DAVIES: Right. And they brought in new managers. And you write that they had some bright ideas. One of them was buying a new information technology system, you know, for processing invoices and all that and rushing that in. What was the effect of that?

ALEXANDER: Well, as one person told me in the book, it brought us to our knees. They essentially collapsed, had very serious cash flow problems. They couldn't make it work. And as a result, the long story short is that they went into bankruptcy.

DAVIES: What was the effect of this experience on the workers, their lives, their morale, their connection to the company?

ALEXANDER: You know, that's - I think that's the biggest issue. This was a - if I can be so bold as to say it - a spiritually destructive experience for them. People in Lancaster, and I think people all over the country, feel that capitalism is supposed to work a certain way. And these people had firsthand experience with a kind of 'nother brand of capitalism that they were not expecting and did not fully understand.

And there's no reason why they should understand. It's not that, you know, they're not smart. They are smart. It's that this is not the way they were told the system worked. And so it left them incredibly disillusioned and wary and untrusting. And I think that really follows through in other elements of their lives within the town and within this country.

DAVIES: We talked about how Lancaster, Ohio, was an all-American town in the '40s, '50s, '60s and into the '70s, in part because there was, you know - there were people of all incomes and a corporate leadership that was invested in the town. Look at the town now and tell us how it compares.

ALEXANDER: Man, it - well, it's not the same town by any stretch of the imagination. Although, if you were to look at the town you'd say, well, it looks about the same. The houses, for example, are not quite as well kept up as they used to be. The west side, which has always been sort of the working-class side of town, is even more disheveled than it used to be. People are genuinely struggling. Parents are in jail, so grandparents or aunts or uncles have the kids.

I saw just the other day a map of the state of Ohio that showed the percentage of kids who are now part of the social service system and what the percentage is their parents who are opiate users. In Fairfield County, 58 percent of the kids who are in the system - their parents used opiates. The county next door, Hocking County, it's over 70 percent. So now you've got drugs in the community, which are an escape from all this sort of stuff.

The economy of the town is struggling, not because there's high unemployment because the employment that there is is all minimum wage or even lower than minimum wage, and so 30-year-old guys are working at Buffalo Wild Wings or Taco Bell making 8.50 an hour. And they say, there's no place else for me to go from here. This is going to be it.

DAVIES: You know, I'm sure you began this project long before Donald Trump was a serious presidential candidate in 2016. Does what happened here connect to the support that he got in places like this in Ohio?

ALEXANDER: Absolutely, absolutely (laughter). You know, I was - I'd be sitting in a lot of bars, and I'd have people discussing, you know, the primary season and so on. And somebody would say something about Trump. And they'd say, yeah, you know, I kind of like that Trump, and other people would laugh. But then, as the months went on, it became more and more obvious that there was actually some real support for Trump. And in fact, Fairfield County went heavily for Donald Trump. And it's - I believe - and this is a theory - that it really is this disaffection.

You know, on Election Day morning, a woman in Lancaster who I spent some time with for the book called me up. And I said have you been to the polls? She said, yeah, Trump, baby. And I said, really? Why is that? And she said, I just want it to be like it was. And I, you know, even saying it now I almost want to cry. I mean, there is this - she's old enough to remember the way it was. And she wants to put her vote with somebody who says he's going to make it the way it was.

DAVIES: And how much do the people affected by what happened here even know of these, you know, distant owners and complex financial transactions?

ALEXANDER: Almost nothing. So, you know, some of the executives within the company, you know, sort of middle management and slightly above know a bit about it. But even some of them didn't know all that much about it. There's - a lot of this stuff doesn't come public.

One of the only reasons I gained a fair amount of information was because eventually there was a - an IPO, an initial public offering. And so then it became subject to Securities and Exchange Commission filings, and also there were bankruptcy cases. So there's a fair amount of documentation. Otherwise, a lot of this stuff goes unreported because it's tough to look inside.

DAVIES: Yeah. Has the town tried to remake itself in any way?

ALEXANDER: It's trying constantly to and is meeting with some success. I don't want to paint too dire of a picture of Lancaster. I mean, there are some little smaller businesses that are opening up, some restaurants that are opening up there. They're always trying to attract some new business there.

The best thing going for Lancaster is how much people love their town, and they want it to work. But they're up against some very tough, tough situations. You know, just this morning's paper in a nearby town Chillicothe, Ohio, there were seven overdose deaths in seven hours in that town. That was just reported this morning. And it's not - again, it's not just the drugs. It's the whole sort of social decay because there isn't this glue that is holding people together the way it used to.

DAVIES: So what's left of Anchor Hocking? Do they still make glass products there?

ALEXANDER: They still do make glass in Lancaster, Ohio, at what's called Plant One over on Pierce Avenue. And they also have mainly a bottle-making plant for liquor bottles, for example, in Monaca, Penn.

DAVIES: How many people are employed there now?

ALEXANDER: Roughly about 900. It's been between 900 and 1,000 people all told. It varies somewhat, according to season.

DAVIES: Down from 5,000 years back. Was it racially diverse?

ALEXANDER: No. Lancaster people to this day will say that they live in the whitest town in America. It's a highly dubious statement, but it shows you that it's virtually an all-white town, slightly more diverse than it used to be, but not by much. And in the '40s, '50s, '60s, it was very, very sort of Anglo-Saxon, Protestant and Catholic in that town to the point where the Klan in the '20s, for example, the Klan was a force. The sheriff and the mayor were Klan members.

DAVIES: Those who voted for Trump in Lancaster, Ohio, what do you think they're going to be looking for? How will they judge his presidency?

ALEXANDER: I spoke to somebody day before yesterday, an old high school friend of mine who actually went to Trump's inauguration. That's how much of a supporter she is. I don't know. I don't have a good answer for that question. I believe that they will ultimately be extremely disappointed.

But I think partly Trump has already fulfilled at least one expectation, and that is to sort of express this sort of generalized anger and aggressiveness that they wish they could do. And Trump, I think, is sort of their paladin doing it for them. Ultimately, I believe they'll find that to be empty, but I can't be sure.

DAVIES: Brian Alexander, thanks so much for speaking with us.

ALEXANDER: Thank you, Dave. I appreciate it very much.

DAVIES: Brian Alexander's book is "Glass House: The 1% Economy And The Shattering Of The All-American Town." Coming up, we remember writer Bharati Mukherjee who died last month. This is FRESH AIR.

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