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MANUFACTURING IN UTAH

By Michael Christensen

Geneva Steel plant, 1946

The manufacturing sector of most western states has always been smaller than the national average. With the western states being latecomers to the nation, their economic development differed from that of eastern states--most western states developed because of demand for their natural resources. Whether these natural resources were beaver pelts, minerals, agricultural products, or lumber, they were, for the most part extracted and then shipped to the East, where they were processed at existing manufacturing facilities. In fact, eastern states often fought attempts to build competitive manufacturing plants in the West. Utah was not substantially different from this general historical development pattern. During the nineteenth century, Utah manufacturing employment varied from 54 to 65 percent of the national average.

Although lower than the national average, Utah's manufacturing sector was initially much larger than the manufacturing sectors of other Intermountain states. The Mormon pioneers' desire to be self-sufficient helped manufacturing get a better start in Utah than it did in other western territories and states. The manufacturing that did develop in Utah during the territorial days was designed to meet the needs of the resident population. In 1860 Utah's manufacturing sector employed 14 percent of Utah workers; the Intermountain states' average was only 5 percent. However, as these states matured, their manufacturing base increased. By the turn of the century, most had caught up to or surpassed Utah in output of manufactured goods.

In the 1850 census, fourteen Utah manufacturing establishments, employing 489 people, were listed. Iron manufacturing was the largest industry; shoe and leather product manufacturing was second, followed by furniture, lumber, and wood products. Clay, glass, and stone manufacturing and food processing were also listed.

In the 1860 census, 148 manufacturing plants were listed, employing 1,161 people. Seventy-six percent of all manufacturing employees were employed in four industries: iron and steel manufacturing establishments employed the most at 303; those in shoe and leather production numbered 231; apparel and fabricated textiles workers numbered 211; followed by those employed making furniture, lumber, and wood products, with 134. Also important to the growing economy were food products; clay, glass and stone products; metal products; and paper, printing, and publishing.

The completion of the railroad in 1869 brought manufactured goods to Utah from other parts of the nation. The competition forced many Utah companies to close their doors; however, the railroad also gave rise to export-based manufacturing. Where Utah manufacturers were able to find a competitive advantage, the railroad allowed them to expand their markets and sell their products nationwide. The industries that were hurt most as Utah became more a part of a national marketplace were shoe and leather manufacturing, apparel and textile production, and furniture manufacturing.

As late as the conclusion of World War II, Utah's manufacturing sector was still small compared to the national average. Those employed in manufacturing nationally earned 27 percent of the total national earnings. In Utah, manufacturing represented only 9 percent of the total state earnings. Utah was not unique among western states in the size of its manufacturing sector--manufacturing in all western states amounted to only 8 percent of earnings. World War II helped change all that. It spawned a hug expansion of manufacturing throughout the West. From 1946 to 1962 manufacturing employment in Utah went from its lowest point in the state's history (as a percent of total employment) to its highest point. During this time it rose from 13.8 percent of total employment to 18.3 percent. By 1950 manufacturing earnings in Utah had jumped to over 13 percent of total earnings, a 43 percent increase in just four years.

This dramatic increase in manufacturing employment continued for another decade. By 1960 manufacturing's share of the state's total earnings had risen to almost 19 percent. During this same period (1946-60) other western states also made tremendous strides in manufacturing. Arizona led the way with an 850 percent increase in manufacturing earnings. Utah was second with a very impressive 510 percent increase. Below is a table showing the earnings increases of the major industry sectors.

Increase in Earnings in Utah by Industry Sector 1946-60

During and shortly after the World War II, the federal government spent billions of dollars nationally on manufacturing facilities and scientific research, and much was spent in Utah. Probably the biggest federal government investment in manufacturing in the state was the building of Geneva Steel Works in Utah County. This $200 million project permanently altered Utah's manufacturing structure. No private investor would have risked such a large investment in a steel plant so far from its markets. However, the federal government felt it necessary to have a steel plant away from the coasts and therefore less likely to be a target of enemy attack.

Once it was built and functioning, it seemed logical to keep Geneva operating. Utah is the only western state with deposits of both iron ore and coking coal. Under the ownership of U.S. Steel Corporation, Geneva became a major employer in the state. Equally important, many related industries such as steel fabrication developed into large employers because of Geneva's presence. However, in 1985, USX Corporation closed the plant. Shortly after, it was sold to local Utah businessmen and reopened. The plant is again a major Utah employer with 2,400 on the payroll and hundreds more employed in companies whose work is directly linked to Geneva's steel production. Despite the successful reopening of the large plant, iron and steel manufacturing employment in Utah is declining as a percentage of total manufacturing employment in the state. In 1950 primary metals manufacturing represented 29 percent of all manufacturing employment; in 1989 primary metals industries employed only 6 percent of manufacturing employees.

Steel manufacturing was not the only industry the federal government helped get established in Utah. During the second decade after World War II, another major industry began developing--defense manufacturing. In 1956, Sperry Rand Corporation (now Unisys) came to Utah to build missiles. Two years later, Thiokol Corporation located a plant west of Brigham City to build solid fuel propellants for the Minuteman missiles. Hercules Corporation became another large defense contractor. This company was established in Utah in 1914, and produced blasting powder for mining. In 1958 they entered the aerospace industry by producing rocket engines. These three companies currently employ over 13,000 people (Thiokol 7,000, Hercules and Unysis 3,000 each).

Another example of the growth of the aerospace industry is the coming of McDonnell-Douglas to Utah in 1987. One of the two giant airplane manufacturers in the United States, McDonnell-Douglas employs about 600 people in Utah and produces parts here for the company's airplanes.

Computer software and electronics are other recent growth industries in the state. Examples of software manufacturing are Novell and WordPerfect corporations. Founded in 1983, Novell has become an industry leader in designing computer software "local area network" or LAN systems, and by 1991, the company employed about 1,200 people. Novell and WordPerfect merged in 1994.

The rise of these new post-World War II "durable goods" industries dramatically restructured the state's manufacturing sector. In 1950 the durable goods industries employed about 48 percent of all people in manufacturing. By 1989 durable goods employment amounted to 67 percent of total manufacturing employment numbers. Transportation manufacturing (including aerospace) grew from 1 percent of the total manufacturing employment in 1950 to just over 25 percent by 1989.

By comparison, the broad category of nondurable goods has shown a significant decline. Food canning and kindred products had been a mainstay of Utah manufacturing from pioneer days. In 1950 this industry had employed almost 30 percent of all manufacturing employees; by 1988 it employed only 11 percent.

In summary, Utah's natural resources and the Mormon pioneer desire to be self-sufficient were key factors in the early history of manufacturing. As a result, early manufacturing centered around industries that served the resident population. Slaughterhouses, iron works, mills, canneries and creameries, as well as textile and furniture manufacturing were all significant employers. World War II had a profound affect on manufacturing in Utah. As a result of this great conflict, new industries were developed. The two most important were defense contracting (especially aerospace) and steel manufacturing. A third modern manufacturing industry that has developed in the decades after the war is the electronics/computer field, which has become important to Utah since the 1960s.