For years, the Hawthorne Works was about the biggest thing going in this grimy industrial town tucked into Chicago's western edge. At its peak, during World War II, the 48,000 workers who streamed through the factory gates daily gave Hawthorne a population three-quarters that of Cicero itself.
Off hours, they attended the plant school, played for Hawthorne's many sports teams, or participated in a smorgasbord of clubs, from chess to sharp-shooting. It was the industrial age at its zenith, the flowering of Smokestack America.
It was also the biggest maker of communications equipment anybody had ever seen.
Hawthorne Works was the pride of Western Electric, American Telephone & Telegraph Co.'s manufacturing arm. For a time, it cranked out every single telephone used in the United States. Then it made the giant electromagnetic switching machines that routed the nation's telephone calls for decades. It even turned out washing machines and sewing machines, in the early days when Western Electric wasn't confined to the telecommunications industry by government fiat.
But Hawthorne has become a fading shadow of that old industrial behemoth. Its work force, shrinking steadily over the past decade, is down to 4,750. A contractor's wrecking ball is turning more than one million square feet of brick buildings to rubble. Its obsolete production lines, unable to satisfy requirements of the computer age, turn out only the simpler components for telecommunications equipment.
Now, in its eleventh hour, Hawthorne has been given a glimmer of hope--ironically, thanks to the impending breakup of the Bell System, of which it was once a cornerstone.
For Hawthorne, the breakup of the Bell System provides a chance to expand into new businesses beyond its current piecemeal production lines. Even a return to the days when the plant made appliances and other noncommunciations equipment is possible, though not very likely.
"I see it as a tremendous opportunity, an exciting opportunity, because we should have the opportunity to sell what we make to whomever," says Virgal Schad, the plant's general manager. "I'm not sure we'll have more control over our destiny, but we have more chances to direct our destiny."
At the same time, the breakup increases the risks that the plant may be shut down for good. Hawthorne is going to have to prove, more than ever, that it can pay its way in the new, competitive world being entered by its parent company. If it can't, if Western Electric can make things cheaper elsewhere, the plant gates will close forever.
"It's not engraved in stone that there will always be a Hawthorne," Schad says. "If we don't make a profit, particularly in this new competitive environment we're now entering into, we'll go the way of the buggy-whip makers. Nobody will need us any more."
"The chances to fail are certainly much greater," says Bob Born, director of engineering. "But so are the chances to succeed."
This new turning point was created by the Federal Communications Commission in 1981, when it directed AT&T to establish a separate, deregulated subsidiary to sell communications equipment. The same order freed the new subsidiary to sell computers as well as telecommunications equipment. That subsidiary, American Bell, began operation this month. In a second phase of the breakup, AT&T's former local phone companies are to be split off from the parent company next Jan. 1 under a court settlement between AT&T and the Justice Department, and reestablished as seven new regional telephone companies.
With the disbanding of the Bell monopoly, Western Electric will be freed from the regulatory constraints that kept it from making nontelephone equipment. And it will be able to sell any products it makes to customers in and out of the shrunken Bell System, including American Bell. Hawthorne and the rest of Western Electric already are seeing the effects of the first stage of the break-up. As yesterday's start-up date for American Bell approached, AT&T's orders for new phone equipment from Western Electric dried up because officials of American Bell--which can buy its equipment from any manufacturer--began considering their options, Hawthorne managers say. That slowdown coincided with a general downturn in telephone sales caused by the laggard economy.
A year ago, before the announcement of the proposed settlement of the Justice Department's antitrust suit against AT&T, Hawthorne's fate was tied to its ability to keep producing its products more cheaply than other factories in Western Electric's manufacturing system. There seemed little chance that Hawthorne, with its relatively antiquated facilities, would get any new business, and the odds of keeping even the lines that it had seemed to be dwindling.
Fiber-optics technology and new ways of making capacitors seemed destined to make Hawthorne's current products as obsolete as its old switching machines, and plant employes wondered aloud whether Hawthorne was becoming a graveyard where Western Electric sent obsolete technology to die.
That specter still hangs over the big plant. But Hawthorne now has the chance to replace some of the business that almost certainly will be lost in the next few years, or to sell what Hawthorne already makes to other customers.
Just what products will sustain the plant in the future isn't known, however. "We're doing a lot of thinking and planning and wondering and analyzing what kind of products we make are saleable," Schad says. And Born says that ideas for products that once might have been unthinkable now will be considered. "Now we can say: 'That's a possibility--let's talk about it,' " he says.
To some extent, this planning is being hampered because some details of the implementation of the consent decree reached between AT&T and the Justice Department still have not been ironed out. Those details could affect how some of Western Electric's assets are apportioned. "At the moment, we are not going up and down the street with a sandwich board saying we're open for business," Schad says. "We are in a period of transition, trying to determine where we will fit into what will be AT&T, Bell Labs, Long Lines and Western Electric."
But that doesn't stop Hawthorne's management from dreaming and laying some contingency plans for when they finally are set free. They believe that among the more obvious possibilities for expansion are producing wire from the plant's cable shop, using Hawthorne's forge to produce specialty metals, and innovations in the plant's capacitor line. "All these markets are very competitive, but you also have to find a specialty niche and make a product you can sell," Schad says.
Somewhat further out are adaptations of existing Hawthorne production lines to make other products, such as a calculator manufacturing plant spun off the circuit board business.
"I feel to a certain degree pessimistic, because a lot of our product lines are elderly in terms of the new technology," Schad says. "But on the other hand, when you think of what you could make with these tools, machines and skills . . . "
Any of the proposals made by Schad are subject to approval by Western Electric, so he and his subordinates will have to justify their plans on grounds of practicality and profitability. "If I can make the case that the profitability is there, and it's a proper use of corporate assets, we might be able to get the go-ahead for it," Schad says of expansion possibilities. "We could go back to making washing machines if I can make a washing machine cheap enough."
Still, Hawthorne's management realizes that any plans it makes might be jeopardized by the same hard realities that have caused so many other changes at the plant over the past few years. Despite the demolition of many of the plant's older buildings, despite the construction in recent years of more modern facilities on the site, Hawthorne is still a fairly old manufacturing plant, little suited to many high-technology chores.
"My buildings are old and drafty, the sprinkler systems let go every once in a while because the pipes are old, and you have to patch the pipes," says Schad, cataloguing some of the problems. "These things are there, and you have to live with them." Other negatives are high taxes and energy costs, a dwindling local work force, and the plant's sheer size. Even with the elimination of some of the older buildings, Hawthorne still has 2.5 million square feet in six different buildings, so widely spread out on the complex that the plant has its own bus service to move workers around.
"Our ratio of square feet to land was maybe okay for the era in which the plant was built, but certainly not for the way things are today," Schad says.
Hawthorne officials also aren't too optimistic about the possibility of a massive investment by Western Electric to modernize the plant. "I would say the chances of major investment here are rather slim," says Schad, adding that the best hope might lie in a home-grown technological breakthrough. "But again, the corporation has to consider where it would get the biggest bang for its buck," he says. Production of a product developed at Hawthorne might best be moved to another plant, he fears.
Even if Hawthorne wins a new lease on life making, say, specialty metals, wire and some sophisticated electronics equipment, the days when its worker population rivaled that of Cicero aren't likely to return. Plants today are smaller than those of Hawthorne's time, and Schad believes the facility can operate most efficiently at about its current employment level. At the absolute outside, employment eventually might balloon to 7,000 workers, he says.
For those who have been laid off from Hawthorne over the years--the Hawthorne workers with the shortest tenure these days have been there well over 10 years--that's not good news. Things aren't helped by persistent rumors that Hawthorne soon will close altogether--rumors fed by fears that Western Electric's brave new world will be too competitive for Hawthorne to survive. "There's great concern that we're going to punch out of business," Schad concedes. "I must get that question five, six, seven times a day."
The uncertainty over the plant's future doesn't do much for plant morale. Once it was a model of paternalistic management, offering, for example, jobs and other support to survivors of 815 employes and family members killed when a Chicago River steamer capsized on a company excursion in 1915.
Now, life in a colder, more competitive environment is going to require some adjustments. "The uncertainty worries all of our people, and it's having an impact on our morale," Schad says. "We are embarked on a cultural change in the life of the factory."