What Miller Is Brewing
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
One reason it would be tragic if Miller Brewing moved its headquarters out of Milwaukee would be the break-up of the campus of fun on the city’s west side. Literally across Highland Boulevard from Miller is the home of Harley-Davidson. All you’d need is a pool-cue factory up the street, and our roadhouse synergies would be complete.
On the other hand, the mere possibility of losing Miller could be a salutary scare for another old Great Lakes city still arguing over where the glory days went.
Anyway, Miller hasn’t said it’s leaving, but its parent, London-based SABMiller, is hitching its American beer-making with that of Colorado-based MolsonCoors in a joint venture. By eliminating even more spaces between their names, they expect to better compete with Anheuser-Busch.
That news has an insecure Midwestern town fretting. Miller’s the last big brewer left in a city that named its baseball team after the industry. While there are eight Fortune 500 companies headquartered here, the city has felt its position sliding. As in similar cities, population has stagnated and the kids have headed for Chicago or Dallas after college.
In 1970, metro Milwaukee was the peer of Seattle and San Diego in the share of all personal income nationwide earned by the people in its economy. Thirty years later, its share was less than half those of its former peers. They grew; we diminished.
People fear we’ll diminish more. In the Sun a few days ago, Harvard economist Edward Glaeser noted as a cause of Buffalo’s intractable destitution that less than 19% of that city’s residents held a college degree. In Milwaukee, the figure is around 18%.
So people fret about losing a headquarters, both as a milestone of decline and as signal to others about whether this is a place where the high-priced talent can live and work. The head of the Metropolitan Milwaukee Association of Commerce, Tim Sheehy, says that so far it seems that Miller and Coors haven’t started thinking seriously about where the headquarters will go. When they do, Mr. Sheehy says, “the important thing is to listen to what they need.”
That would be a change. The city’s attitude long has been, “we are what we are.” This includes good things: short commutes, reasonably priced real estate, lots of nearby services and talent, particularly if you include Chicago.
But our business climate’s inclement is ranked 39, according to the Tax Foundation, while Colorado’s is ranked 13. Nor is it just taxes. Several heads of small, techie companies have made splashes with published essays blasting the attitude governments have in Wisconsin: heavy-handed regulation, inflexibility, in one case a city bureaucrat keeping a chief executive officer cooling his heels while she took time away from answering his questions so she could have a cigarette break.
“Some of our staff could work out of a Starbucks,” the CEO-on-hold, Chris Carter of software consultant CCI, says. “I like Wisconsin, I like Milwaukee,” especially the river view out of his refurbished old factory. But he needs to see some appreciation.
MillerCoors could fuzz it up, keeping top people in both places, or maybe they’ll head somewhere else entirely — say, Chicago. As Mr. Glaeser noted in an earlier study, high- and low-skilled cities are diverging as people with talent are drawn to others like them. That attracts companies — “Talent is very much driving capital,” the head of Chicago’s business recruiting agency, Paul O’Connor, says.
This doesn’t bode well for humbler burgs. When paper-makers Fort Howard and James River, respectively of Green Bay, Wis., and Richmond, Va., merged in the 1990s, they spurned both cities for suburban Chicago. Or HSBC, the London-based bank that entered America years ago by buying Buffalo’s Marine Midland and putting up that city’s tallest tower. Now, HSBC’s new North America headquarters is going up near Chicago, part of its long, quiet address change out of Buffalo after it bought Household Finance. Its top banking executives slowly relocated to New York over the past few years.
Against this sort of economics, what can a town do? The obvious thing is to be as attractive as you can, particularly to future giants. Mr. Carter says, “There’s a lot more of me out there,” meaning guys with $20 million companies aiming to hit $100 million. Who knows what factor could keep each around — Mr. Carter says he doesn’t want to uproot his kids — but surely the basics count: Better schools, better policing.
And taxes. Any time CEOs complain about ours, particularly on personal income, critics fire back that Wisconsin’s a high-tax, high-service state, always has been, and that’s that. But as new numbers from the Wisconsin Taxpayers Alliance show, it’s more like high-tax, high-pension, since public employees here accrue unusually generous retirement benefits. That’s not exactly a value proposition.
Less obvious might be to surrender some pride. Mr. Sheehy’s approach hints at this: Listening to what a company needs instead of telling it all the things it should appreciate about us. “It’s not about you, it’s about the company,” Mr. O’Connor says.
Which is a change for a place with a long tradition of unions and civic socialism. “There are a lot more places to locate,” Mr. Sheehy says. It helps Milwaukee that it’s near Chicago, giving access to its airport, its ad agencies, rich Chicagoans who buy riverfront condos springing up around downtown Milwaukee. Even admitting that, however, is a surrender of a historically prideful autarky. It’s not easy.
If it takes a headquarters scare or two to get a town a new attitude at last, then maybe the crisis is worth it.
Mr. McIlheran is a columnist for the Milwaukee Journal Sentinel.