Lessons from the Inbev Takeover and What it Means to St. Louis

Having just gotten back to St. Louis I am getting my first local reaction to people to the sale of this quintessential St. Louis institution. I had written on the pending Inbev takeover from the East Coast but now that I am back in St. Louis I have a better idea of how locals are taking it.

There seems to be a sadness from many people to the takeover. After all St. Louis is famous for very few things and beer is one of them. Now that AB is no longer locally owned ( making Schlafy the largest locally owned brewery, as stated in a memo the owner sent out to employees) Da Lou has lost a little bit of luster. STL tourists in Rome, Jerusalem, Bangkok and Rio may no longer be able to point to a bottle and say “look this is where I am from” to people who know nothing of the St. Louis Cardinals and the Arch.

I am not a drinker so my feelings on AB have always been mixed. They have been a good corporate citizen and done a lot of good in the community; but they make and sell a product that is clearly harmful. While they pump millions into local charities and into the tax-base they cost the region countless lives through drunk-driving and beer-related violence. Having said all of that, at the end of the day, Americans like other Westerners like to drink and beer is the beverage of choice for many Americans and as long as there is a multi-billion dollar company that provides thousands of good paying jobs to hard-working locals I was glad to have them in St. Louis.

Mayor Francis Slay has said that his first order of business with CEO Carlos Brito will be do try and convince him to move their corporate headquarters from Belgium to St. Louis (not going to happen). I think locals should be more realistic and instead of asking for the impossible focusing on what can be salvaged; good paying jobs to blue-collar union workers and corporate charitable efforts. In particular, two things locals should petition the new ownership to do is keep Grant’s Farm open (which is a local treasure) and to continue the world famous brewery tours.

If Inbev is unwilling to keep these two things going, it will send a sign that they may pull out of St. Louis. St. Louisans keep on saying that AB will never close the brewery because St. Louis is centrally located in the United States and the cost of living and business here is low. When they say this they are missing one huge point; Missouri is a union state and St. Louis is a pro-labor city and relocating to a Southern right-to-starve state would save Inbev millions every year in labor costs. Don’t think this could not happen.

What the local media is not telling you to any significant degree is this;

- St. Louis used to have one of the largest companies in the world in McDonnell-Douglas based locally. They laid off thousands of people and were bought by Boeing, devastating the North St. Louis County economy. Sons of middle-class professional workers of McDonnell-Douglas have now come out of broke North County schools and are more likely to be in prison than have a job like their fathers had.

- TWA was based in St. Louis and was one of Americans largest airlines. Ten years ago you could get a direct flight from St. Louis to London, New York or Miami. Today, unless you wan to fly a discount airline, it is extremely difficult to get a direct flight from St. Louis to either coast. Because of this St. Louis has a beautiful convention center that can only attract second and third rate conventions because accessibility is a major issue for convention planners. Most importantly when TWA was bought by American thousands of locals lost their jobs. You can find ex union members who worked at TWA with good benefits now greeting you at Family Dollar or Wal-Mart.

- AG Edwards was the largest financial services firm based outside of New York and was bought by Wachovia. Thankfully, Wachovia made a major investment in St. Louis, but STL no longer has the prestige it did in that industry despite Edward Jones still being based here.

- St. Louis used to have the second highest concentration of jobs in the automotive industry. That is no longer the case. The old GM plant on Union on the North Side is long gone having moved out to Wentzville with an iffy future. Ford has closed its doors in Hazelwood and Chrysler is gradually shutting down its operation in Fenton. Ex auto workers with no college degrees have to take a major cut in their pay and lifestyle. Guys who were making $30 per hour are now lucky if they make $12 and have any benefits at all.

While the city of St. Louis is getting cleaner, easier to live in, more full of life, and in some areas safer, the prospects for the local economy in the long-haul are not looking great. While everyone is partying away at the Mandarin or the Pepper Lounge the local economy is on shaky ground.

What is going to come to replace the jobs we have lost? Bio-tech is often mentioned. The problem with bio-tech is it is great to have as a source of tax-revenue and jobs but those jobs are few as it is not labor-intensive. Coffee shops? High-priced restaurants? Night clubs? How many of you know more that two people with a green job? I am not trying to be pessimistic but St. Louis needs to do some serous soul searching.

The national corporate media is telling you we are in a recession yes and people are hurting and companies are bout and jobs are lost and yes all of that is true. What they are not telling you is that America is not the country it was 10 or 20 years ago. We are not as dominant. In the new global economy many Americans will loose and that means that a sizeable chunk of Americans may just be looking at less comfortable lifestyles more on par with the working and middle-classes in less affluent nations. For a handful of wealthy Americans the global economy is working just fine and it is precisely for them that such a system was created.

Next…

I have an interesting cabbie tale of an enthusiastic Obama supporter who is over 80, been going to cardinals games since the Sportsman park days, and is vociferously arguing the merits of watching baseball on Sundays with other church ladies. Ill mix in that a tale from a fellow cabbie of a detached leg in the middle of the street in Walnut Park and a cage-fighter in my cab.