The scope of the damage and destruction along Lake Street, University Avenue, and other neighborhoods in the wake of George Floyd’s death at the hands of the Minneapolis Police Department is now becoming clear. Minnesota’s Fortune 500 companies have pledged to help rebuild these areas.
State and local governments are involved as well. Mayor Jacob Frey announced the creation of the Minneapolis Forward: Community Now Coalition, co-chaired by “a trio of local business leaders.”
This is not the first time Minneapolis has faced such a crisis.
Plymouth Avenue, 1967
[image_caption]Rashad Shabazz[/image_caption]
Historian Susan Marks elaborates: “Throughout the three-day period, demonstrators had showed their frustration with discrimination against African Americans on the Northside. They had focused most of their anger on white authority symbols, including businesses and property. Local police received few reports of assaults on white citizens themselves.” She goes on to note that, “Some local press addressed systemic causes — including alienation and racism – and called on community leaders and policymakers to prevent future violent incidents.”
William C. Norris and Control Data’s northside plant
One of the business leaders who reacted to the 1967 protests was William C. Norris, founder, CEO, and chairman of the board of the Control Data Corporation (CDC). At the time, CDC was one of the largest and fastest growing companies in Minnesota, building plants and creating jobs throughout the state, especially in the Twin Cities. However, except for its corporate office in downtown Minneapolis, all of its facilities were located in the suburbs.
James W. Worthy, in the introduction to Norris’ book, “New Frontiers for Business Leadership,” noted that 1967 was a turning point for Norris’ business philosophy: “During Control Data’s early years, Norris appeared to take little interest in social issues. … In 1967, however, two critical events took place that would result in his leading Control Data into radical new frontiers of corporate strategy and public policy. In 1967, Norris attend a seminar for chief executive officers at which Whitney Young, then head of the National Urban League, led a discussion on the social and economic injustices to which blacks in America were continually subjected. It opened Norris’ eyes to disturbing vistas of American life.”
The second event was the Plymouth Avenue uprising. Historian Jennifer Delton, in her book “Racial Integration in Corporate America, 1940-1990,” quotes Norbert Berg (Norris’ successor as CEO of Control Data) as saying, “All of a sudden, Norris was different. It was like he’d had his eyes opened. He had become aware of problems and of his ability to do something about them. I always believed Whitney Young did that.”
Control Data announced that it would “go against the general move to the suburbs and build a manufacturing plant on the North Side of Minneapolis in an area of unemployment and minority group concentration,” according to an article in the November 28, 1967, issue of the Minneapolis Tribune. To do this required more than constructing a new plant. Delton describes how Control Data had to alter a variety of its personnel policies in order to hire local workers, train both the new employees and their supervisors, and provide services such as day care, health care, banking, and even bail bonds.
[image_credit]University of Minnesota Libraries[/image_credit][image_caption]An image of an employee at the Control Data in north Minneapolis.[/image_caption]
One of the problems with this approach became apparent in the “greed-is-good” mentality of the 1980s. As profits started to shrink in the face of competition from desktop computers and in the 1990s, “Control Data’s slippage from its glory years prompted much hand-wringing and finger-pointing,” according to Thomas Misa in his book “Digital State: The Story of Minnesota’s Computing Industry.” Critics pointed to Norris’ Corporate Social Responsibility as the source of the problem and eventually forced him out in 1986. The Northside Manufacturing facility soon closed and thereafter Control Data focused on maximizing its shareholders’ earnings rather than providing civic leadership as part of its business responsibilities.
Lessons for the present
I draw three lessons from studying this history. First, it is shortsighted for businesses to reject a leadership role in civic affairs. Focusing solely on maximizing profits neglects opportunities to improve our communities more generally.
Second, policymakers must jettison paternalistic attitudes toward economic development. Norris himself, for instance, referred to Northside Manufacturing as “the ghetto plant” and the premise of much policymaking seemed to be that there was no hope for homegrown economic development in such a place. Jobs and businesses had to be brought to these areas.
Third, political and business leaders must recognize that the affected communities know what they want and need, so it makes little sense to begin the process by courting Fortune 500 CEOs or asking big companies to locate in the damaged areas. Rather, we should start by embracing the work of organizations such as the Center for Economic Inclusion’s Call to Action to Dismantle Structural Racism & Economic Disparities in Minneapolis-St. Paul and the NAACP’s Twin Cities Economic Inclusion Plan.
We can then work together to build a bright future for our communities.
I thank Susan Riley for extensive help with this column.
Thank you for this enlightening history –
the facts and your analysis. I have so much to learn.
It’s good that this article acknowledged CDC’s declining fortunes under Norris. One exec of a spinoff company remarked that Morris forgot what his customers wanted. Where to strike the balance remains a complex issue.
In addition to the manufacturing plant, a Control Data Institute (vocational training school) was located across the street with a mission to train area residents not only to work for CDC but also for other employers in technical specialties.
I’m disappointed the author felt the need to make negative comments about Control Data and MN corporations in general. And I am really tired of everybody white being the bad guy in these discussions. There are many people who want to help and make a difference. Peoples attitudes are changing for the good, and continuing to make negative comments about corporations greed ( they did build at vocational training center to help people get jobs ) and white people is just not helping anything.
What negative comments?
Mr. Johnston said: “One of the problems with this approach became apparent in the “greed-is-good” mentality of the 1980s.”
The only thing I’d correct is that the “greed is good” mentality is very much alive in corporate America, Wall Street and Washington, D.C. to this day. Many government policies were re-engineered under Reagan on the philosophy of Milton Friedman and his ilk that government policies ought to promote the maximization of wealth and profits. That’s just a nicer, more “politically correct” way of saying “greed is good.”
Mr. Norris was a type of CEO who went out with the “Reagan Revolution.” Socially responsible corporate governance became passe just like civil rights in 1981. Don’t criticize Mr. Johnston for reporting the truth.
It goes even farther than that. Publicly traded corporations simply must have a fiduciary responsibility to maximize corporate profits. If the companies don’t do this, they are very often sued by shareholder’s through personal injury lawyers who allege the companies didn’t do everything possible to maximize and monetize shareholder value. Companies attempt to make efforts to practice CSR but they are hamstrung by the pressure from attorneys representing shareholders, who will sue at the slightest drop in the per share price.
That’s not exactly true. Adolph Berle and Gardner Means wrote in their landmark work “The Modern Corporation and Private Property” that the publicly traded corporation had become a new form of private property that was affected with a public interest. Berle did warn that if society did not assert its claim to make such corporations socially responsible, the great corporation lawyers would assert a more narrow right of the absentee shareholder or creditors to maximize profits. These claims have been asserted, as I said by the likes of monetarists like Milton Friedman and his ilk. But it’s a contested and contestable point because the issue is never drawn simply, cleanly and finely as such to establish a general rule or principle.
There are few if any shareholder rights lawsuits anymore. Those that are brought are not by “personal injury lawyers” but by corporate law specialists. These suits must overcome rules that make class actions all but impossible.
Anyway, any influence over corporate policies are more by pension funds, banks and institutional holders of corporate shares than individual shareholders. If these suits were such a threat, you’d have seen by now lawsuits shutting down the so-called “rights” of corporations to make “Citizen United” type political contributions using corporate funds. If there’s a First Amendment right to prevent a union from making political contributions, it ought to follow that it’s a breach of fiduciary duty to squander corporate funds on such contributions. To my knowledge, there have been no such lawsuits. If there have been, they were speedily dispatched for the reasons I’ve listed on the obstacles they face.
For those wondering what became of the Northside Plant building, it’s been added onto and remodeled but is still recognizable: https://goo.gl/maps/C7a7bajFyLJHfJxz8
Hopefully the slow recovery of Plymouth Ave. businesses in the late 60’s can be avoided on Lake Street: Get $$ in ASAP to get businesses reopened and new construction to fill empty spaces: The longer it takes the bigger the job becomes. Years became decades on Plymouth Ave.