ECONOMIC RESTRUCTURING AND LOCAL CONSEQUENCES The case of Drents Dorp, Eindhoven

Jack Burgers and Don Kalb

Deindustrialization and Working-Class Neighbourhoods

In recent years, many studies in the field of urban sociology have focused on the local consequences of the loss of jobs in manufacturing industries. In depicting the social and spatial consequences of deindustrialization, the notion predominates that working-class neighbourhoods are uprooted by growing unemployment (Newman, 1989; Nash, 1989; Smith, 1991; Fainstein et al., 1983). Disintegration is very often the central category used to describe the neighbourhoods of people formerly employed in the industries. It is suggested that factory workers lost not only their jobs and incomes but also, and perhaps more importantly, their social anchorage because of the waning of working-class culture. It is suggested that in homogeneous working-class neighbourhoods, deindustrialization corrodes the basis of local community life. Thus, deindustrialization is supposed to pave the road to anomia.

Not surprisingly, conceiving of the consequences of deindustrialization in this way is based predominantly on experiences in US cities. There, spectacular job losses did occur in the steel and automotive industries in cities like Chicago and Detroit, which are characterized by huge and highly segregated working-class populations (Smith, 1988: 192). The question is, however, whether the US experience can be generalized to other countries. In this article, we present the results of a Dutch case study on deindustrialization and local consequences. The question we tried to answer was whether the loss of employment in a typical working-class neighbourhood caused social disintegration. Before we present the results of our case study, three preliminary theoretical and methodological remarks should be made.

First, the Dutch situation is interesting because of its institutional context. The well-developed corporatist character of the Dutch welfare state 1 gave deindus- trialization in the Netherlands z a relatively gradual character. Meanwhile, its relatively high social-security benefits cushioned the loss of income suffered by the unemployed. Furthermore, neighbourhoo.ds in Dutch cities are much less homo- geneous and segregated in terms of socio-economic status than neighbourhoods in

Neth. J. of Housing and the Built Environment, Vol. 10 (1995) No. 2.

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American cities because of a much larger degree of 'decommodification' of the housing stock (Murie, 1994). By studying the social consequences of deindustrialization in Dutch cities, it is possible to evaluate the role of institutional factors which are ignored in most urban sociological accounts of local consequences of deindustrialization.

Secondly, it is important to note the romantic and nostalgic flavour of most descriptions of local consequences of deindustrialization (especially in Castells, 1985 and Smith, 1988). The kind of reasoning employed is reminiscent of notions which were used in sociological studies to portray the transition of traditional, agrarian society to modem, industrial society. Again, the description of social change - this time the coming of postindustrial society - seems to be inspired by a romantic nostalgia for stable communities. The question is whether working-class neighbourhoods in the heyday of industrial employment really were the stable communities contemporary observers hold them to be. The Dutch situation is especially interesting because the economy industrialized rather late, beginning in

Figure 1 Eindhoven in The Netherlands

Y Qa~O

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this century. Industrialization and deindustrialization occurred within three generations. The social consequences of deindustrialization can be placed against thebackground of the emergence of working-class neighbourhoods only two generations before. Many people who were the first to settle in these neighbourhoods are still alive today. We evoked their life histories through in-depth interviews and compared their lives with those of their children, grandchildren, and people who later moved to the neighbourhoods they (used to) inhabit. In this way, we can provide a more realistic image of the possible disintegration of their neighbourhoods than by comparing actual changes with an unproblematic ideal type.

A third preliminary remark concerns our case study and the data we gathered. We looked for a neighbourhood that was as homogeneous as possible in terms of its working population before deindustrialization set in. The Dutch city coming closest to a company town is undoubtedly Eindhoven, the hometown of the electronics giant Philips, in the south of the Netherlands. In Eindhoven, we picked the neighbourhood called Drents Dorp, known for its concentration of blue-collar workers (Kalb, forthcoming). As we will show later on, in the early 1970s, almost the entire working population of Drents Dorp was employed by Philips.

In the history of Drents Dorp, three periods can be distinguished. First, there is the period of the twenties and thirties, when it was settled by people from peripheral regions with little or no industrial experience. The second period covers the fifties and sixties. This may have been the heyday of capitalism, as Castells (1989) once suggested, but in any case it was the heyday of Philips, Eindhoven. The last period began in the seventies. Then, Philips was forced by international competition to decrease its workforce. The company started to dismantle some of its production capacity in Eindhoven, thereby disengaging itself from the city. For each of these periods, we will discuss two points. One is the relation between the inhabitants of Drents Dorp and Philips, their employer and provider of all kinds of facilities in terms of reproduction of labour. The second is the changing character of the neighbourhood and the appreciation thereof by the people living there. In describing the social history of Drents Dorp, we used four sets of data.

We reconstructed 15 life histories of people who came to live in Drents Dorp in the 1920s by interviewing them or their children. Additionally, we reconstructed seven life histories of people living at the addresses of these first settlers. Secondly, we conducted a limited survey in the neighbourhood to record the labour-market position of the inhabitants. Fortunately, 81 households cooperated, a response of 95 per cent. Thirdly, we interviewed some key informants. These were representatives of the municipality of Eindhoven, social workers, and housing officers. Finally, we were able to use some data from Philips' own archives.

As stated above, we tried to depict the social history of the neighbourhood by relating economic change to neighbourhood change. Obviously, our case study had an explorative character.

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Drents Dorp before the Second World War: peasants in an industrial neighbourhood

Philips came to the south of the Netherlands because land and buildings there were relatively cheap and labour was abundantly available. After the First World War, the firm continued to develop all kinds of production processes and became increasingly science-based. At that time, the production process was scaled up rapidly. The City of Eindhoven was not able to provide the necessary infrastructure for such a vast industrial plant. Local authorities, for instance, could not provide enough housing for the expanding population. For this reason, Philips had to provide housing for its workers. At the same time, this allowed the company to create a stable workforce. One of the neighbourhoods Philips built was Drents Dorp, named after a province in the north of the Netherlands where many workers had been recruited. It was developed between 1924 and 1930. In that period, 920 houses and seven shops were built. The people who settled there were escaping from a peasant economy in which they could not make a living any more. The company provided opportunities which neither government nor peasant associations could offer. Above all, Philips offered economic security, a living above subsistence level.

Figure 2 Drents Dorp gemeente Eindhoven

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1000 '" 2000 3000 4000 5000

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The family structure was remarkably strong among the migrants. Durkheimian accounts of nineteenth-century industrialization emphasize anomie and social disintegration. In contrast, modem historical sociology and anthropology tend to stress the role of the family in the migration from rural areas to the city. And that is exactly what we see in the case of Eindhoven. Migration was not an individual process but one undertaken by families. And family ties were strengthened rather than weakened by migration to the city. Philips played a key role in the construction of a stable working-class neighbourhood by providing modem houses and, even more importantly, by allocating these dwellings to families with daughters over 14 years old. With their agile fingers, these girls were considered to be ideal workers on the assembly line, where the light bulbs were made. The wages Philips paid also showed that the family was taken for granted as a social unit. Most fathers did not earn enough to support the family. The rationale was that the children would be employed by Philips as well. During the economic crisis of 1931, more than 10,000 people were laid off. At that time, the working-class family configuration -- with several children, in many cases -- proved its worth as a kind of informal social security. Philips seems to have spread unemployment over the families by letting many fathers keep their jobs while dismissing some of the children, at least for a while. Working for Philips strengthened rather than weakened family ties.

Migrants mainly came to Eindhoven in search of a secure future for their children. The families that came were carefully selected by Philips. They certainly were not an unadjusted agrarian proletariat; rather, they were respectable and disciplined. Parsimony was considered an important virtue, and a sound economic future for the children was an important value. To the present day, first-generation migrants who arrived in the twenties and thirties emphasize the blessings of an old- age pension, a benefit only a huge company can provide.

The transition from a rural, agrarian existence to an urban, industrial way of life was an enormous adjustment. Philips proved very proficient in turning peasants into industrial workers. Ingenious methods of conditioning and surveillance got the migrants used to the industrial regime. For many migrants, the adjustment to factory work was difficult. In spite of the promise of economic security, it caused much hardship among people who were used to an agrarian regime. Many of the first- generation migrants had great difficulty staying on the job to reach retirement age in good health. They just kept it up for the sake of their children.

Despite the hardship related to the transition from an agrarian to an industrial existence, there are hardly any signs of resistance or class struggle. The solid structure of working-class family life was mirrored in the corporate structure of the company. At the time, Philips was -- and for that matter, partly still is -- a family firm. Traces of resistance were only present in the sphere of reproduction. Some households refused to buy their food from the company shops even though the items were cheaper there than in the average Eindhoven store.

But Philips did more than just provide secure jobs. Forced by a reluctant and entrenched local government -- a typically southern-Dutch Roman Catholic elite, not much enamoured of modem industry -- the electronics company took care of the reproduction of labour as well. Philips provided modem houses, perhaps the most

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impressive of all the novelties the migrants from the north encountered in Eindhoven. Philips realized that this life style was new to their workers. That is why the company hung up a list in every water closet with rules for the inhabitants to- keep in mind..It was pointed out, for instance, that the rooms should be ventilated regularly and that the pavement in front of the house should be kept Clean. And supervisors saw to it that the residents lived up to these rules.

What were the social characteristics of this neighbourhood? How could it be typified in the years before the Second World War? Neighbourhood life in Drents Dorp may be described from the perspective of social status and religion. Talking with former Philips workers, it is striking that they describe tensions and conflicts in terms of status rather than class. This seems to correspond with the production process and labour relations specific to Philips. The company's internal labour market was not only very large but also very differentiated. Certain parts of the production process were characterized by undifferentiated mass production and therefore could be fertile soil for the formation of class consciousness. However, those jobs were predominantly given to young girls. Philips had a widespread network of department heads and other superiors who emphasized and represented respectability and reliability more than anything else. In talking about the promotions they got, the migrants always stress these very qualities.

The precedence of status over class also shows up in the tensions between different groups in the neighbourhood. Houses on the main street of Drents Dorp were bigger and somewhat more expensive than elsewhere in the neighbourhood. The people who lives there were called employees in Philips' jargon. Apart from the houses they lived in, they were differentiated from the workers by the fact that they were paid not every week but monthly and did not have to punch in and out on the time clock. Sometimes employee families flaunted their prestige. For instance, while drying the laundry, wives would hang the white dustcoats, the privilege of the employee, as visibly as possible in the backyard. In response, the more blatant neighbouring workers' wives sometimes did the same with their husbands' blue overalls.

Conflicts on the workfloor were always sparked by frictions between workers and their immediate superiors. Philips management -- that is, the Philips brothers Anton and Gerard and their next of kin -- was too far away. They were looked upon as a kind of super patriarchs, almost beyond human proportions. Barriers that blocked upward mobility at Philips were perceived in sectarian terms by most of the workers. There was ample opportunity for social mobility, especially for the pupils of the Philips company schools. Nevertheless, there was a strong conviction that Catholic workers could not climb beyond a certain rung on the ladder, because the Philips family was Protestant.

Religion played a role in the neighbourhood as well. Though people were well aware of each other's denominations, religion did not pose an insurmountable barrier in terms of social contacts. Working-class political mobilization, took place in either the Protestant or Catholic pillar, if at all. Because of its supposed atheist character, socialism hardly gained a foothold.

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Drents Dorp in the fifties and sixties: 'panphilipsism'

In his book on how high-tech industries influence everyday life, Manuel Castells (1989) posits that in retrospect, the fifties and sixties, when the Western world was recovering from the war, can be seen as the heyday of capitalism. These were decades of unprecedented economic growth, rising individual income, absence of unrest, and the emergence of consumer culture. This characterization of the Western world certainly holds true for the Netherlands. And Philips played an important role in this respect. The Eindhoven plant was considered an ideal type of modern production, a model for all Dutch industries. In 1970, Philips was the biggest private employer in the Netherlands, with more than 100,000 workers. Besides its sheer size, the company was impressive because of its social policy. In this respect too the company was a model for Dutch industry. A job at Philips was considered a lifetime guarantee for a decent living. It offerred all kinds of opportunities for social mobility, income growth, and an enormous variety of leisure facilities. The successful Dutch novelist Adri van der Heijden, writing about his youth in Eindhoven, coined the term 'panphilipsism', denoting the ubiquity of Philips. He describes a grandfather, a glassblower at Philips, walking in the sun with his grandchild. The glassblower tells his grandson to look into the sun: "If you do that for long enough you will see tiny letters written on the sun, saying 'Philips, 100,000 Watts' or a even a million, I can't see that well." Philips was in every way at the apex of its existence. That holds not only for employment but for the company's activities outside the workplace as well. In some theories, only central and local government provide for collective consumption which enables the reproduction of labour (cf. Castells, 1977). In contrast, Philips was a private company that to a large degree reproduced its own labour. A symbolic event in this period was the opening of the so-called "Evoluon." This technology museum was opened on the 75 ~ anniversary of the founding of Philips. Its central theme was the conquest of nature by man through industrialization. The exhibits made it perfectly clear that after what was perhaps a somewhat disgraceful beginning, in the end, industrialization was a blessing to all mankind; it did not have to lead to social upheaval and revolution. For the worker in Eindhoven, the city was the heart of the world. And as far as anything existed beyond Eindhoven, it was brought home by a Philips product: television.

Let us now consider how the relationship between the company and its workers developed. What changes took place in the local culture of Drents Dorp? What happened to the working-class families that had been employed by Philips?

The social security that Philips offered is mirrored in the celebration of many 40-year-service jubilees of the first-generation migrants from the north. They gave the company the best years of their lives. Their loyalty could not be rewarded more symbolically than by giving them a gold watch, as Philips did. And in the end, they could look foreward to the secular hereafter of the industrial system: retirement. They had the satisfaction that all their children made a living at Philips doing work that was much less exhausting than their own had been. At last, the first-generation migrants saw their efforts rewarded. The stable economic existence they sought for

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their families, and especially for their children, had been attained. Their sufferings had eventually paid off for their offspring. The children grew up in much more luxurious circumstances than their parents did. But even during the heyday o f working-class life at Philips, Drents Dorp was not a stable community. In the fifties and sixties, the employees living in Drents Dorp started to adjust their housing conditions to their growing incomes. They moved out to higher-status neighbourhoods. Philips workers occupied the vacancies they created. Hence, in terms of class, the social composition of the neighbourhood became more homogeneous.

Life in Drents Dorp became easier for the workers as their living standards went up. In many cases, their children took advantage of the growing opportunities Philips offered, both in education and in leisure facilities. Two things are striking in the lives of the children who were brought up in Drents Dorp. First, it was taken for granted that they would be employed by Philips. The Philips schools offered a sound education that was more highly valued than comparable technical schools in town. This was especially important for the boys. In the post war period, mass employment among girls rapidly decreased. Men became the breadwinners. First they were predominantly workers, but at the end of the fifties, white-collar employment increased as well. Secondly, boys who were not able to begin or finish the Philips school were usually employed by Philips anyway. Some of these boys wandered from one department to another. But Philips, being a highly diversified company, always managed to find suitable jobs for them. The children and grandchildren of the migrants from the twenties and thirties did not have the same problems related to living in Eindhoven that their parents once had. They did not suffer from the loss of their cultural roots. These second- and third-generation residents were born and bred in the city. They valued the possibilities offered by the emerging consumer culture in which Philips played such an important role, both by employment and through its products. A glassblower's grandson describes with sparkling eyes one night back in the fifties when he and his friends trashed the theatre after seeing the movie 'Rock Around the Clock'. And his sister proudly describes the quality of the sports facilities at Philips, contrasting them with the inferior dressing rooms of the hockey teams the Philips Sports Association (P.S.V.) played against in her youth. In this period, Philips was a kind of private welfare state. The company offered social security, jobs for every educational level, social mobility, scholarships, and a wide spectrum of leisure facilities ranging from high culture to football.

Drents Dorp from the seventies onward: deindustrialization at neighbourhood level

The seventies was a decade of transformation of the world economy. Corporations and welfare states were forced to reconsider their strategies. For the first time since 1944, Philips faced structural problems. In the seventies, Philips started laying off workers worldwide. From 1971 onward, jobs were lost in the Netherlands as well.

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Most of the time, employment was reduced by not filling redundant vacancies, through early retirements plans, and a creative use of the national disability insurance. The company could thus save face and keep labour unrest at bay.

At first, nothing in Drents Dorp suggested that the future was becoming gloomy. On the contrary, the individual prosperity of the inhabitants increased. In many cases, social mobility was translated into geographical mobility. As mentioned above, the employees started to move to other neighbourhoods back in the fifties and sixties. In the seventies, many workers followed their example, as did their often more highly educated children. Drents Dorp no longer had large families. The children had grown up and started their own households. This trend shows up in the statistics on the local area. Between 1971 and 1990, the population of the neighbourhood decreased almost by a third, from 4,055 to 2,771. The many vacancies created by upwardly mobile parents and more highly educated children led to a replacement of the original population by newcomers to the neighbourhood.

The problems that had been mounting at Philips since the early seventies became critical in 1990. The possibilities to continue a soft restructuring had been exhausted. A little more than a year before the centenary - 15 May 1991 - it became clear that the company was in serious trouble. A massive capital -- 4.5 billion Dutch guilders - - was mobilized for a thorough reorganization. The number of jobs to be lost worldwide was estimated at 60,000. Not only more or less peripheral activities were to be reorganized or shed; even core activities would be subject to reform. According to Teulings (1984), the company is the victim of an 'internationalization squeeze.' Philips is relocating parts of its production process to countries in the economic periphery of the world, but also to core countries. Consequently, the employment Philips provides in the Netherlands has been cut with a double-edged sword, as it were. And it shows in Drents Dorp. Whereas 97 per cent of the neighbourhood's working population was employed by Philips in the early seventies, 20 years later this figure had fallen to approximately 50 per cent. Yet unemployment in the neighbourhood is below the gross unemployment rate of the City of Eindhoven (5.4 per cent).

The relation between the city and the company had already been changing in the years leading up to the crisis. At the end of 1989, Philips announced the decision to close the Evoluon, the museum that had been established on the firm's 75th anniversary. In Eindhoven, the Evoluon is regarded as a gift from Philips to the city. Its closure was symbolic of the changing relationship between the company and its home base. Eindhoven came to realize that it was no longer the centre of the electronic universe. Philips detached itself from the city; the company no longer needed to provide the social and physical infrastructure for industrial production. On the contrary, past initiatives in this respect were increasingly felt to impede economic growth. At the end of the 1980s, Philips also retreated from its role as a social landlord. The provision of council housing became independent of the Philips company. That means that since the. late 1980s, people moved into the neighbourhood who were not employed by Philips. The neighbourhood residents can be divided into three groups. One-third are still employed by Philips. One-third work elsewhere. And one-third receive transfer payments, ranging from old-age

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pensions to unemployment relief or disability benefits; in the Netherlands, the latter two often amount to the same thing. The working people who are not employed by Philips are in construction, the retail trade, or the lower levels of the service- industries.

The neighbourhood has changed in a rather peculiar way. It has become more homogeneous in socio-economic terms. Although we have no data on income, socio- economic differences in the neighbourhood seem to have leveled off over the years since the more affluent employees moved away in the fifties and sixties. Yet from the point of view of the (former) Philips workers, the neighbourhood has become more heterogeneous in recent years. With the separation of the company from the neighbourhood, caused by the dissociation of the company and its housing association, feelings of disintegration have increased. The neighbourhood is no longer a small-scale company town, and it has become more heterogeneous in terms of life style. The former symbolic friction between workers and employees has been replaced by mutual annoyance and frustration about such matters as barking dogs, neglect of gardens and public space, and youths hanging out in the street. Drents Dorp, in the minds of the (former) Philips workers, is no longer a 'real' Philips neighbourhood.

Discussion

Summarizing our case study of Drents Dorp in Eindhoven, are we justified in saying that the neighbourhood suffers from disintegration?

One reason for feelings of disintegration could be the loss of jobs at Philips. We saw that over a period of 20 years, the share of the working population employed by Philips decreased from almost 100 to 50 per cent. Up to now, however, the loss of employment at Philips in the neighbourhood has mainly taken the form of early retirement. People aged 54 or older who lost their job at Philips are said to be retired, not fired. And that is how they perceive it themselves as well. Many people working at Philips fear they will lose their job before reaching the age of 54. Only then do they feel they have been laid off.

Another reason for feelings of disintegration could be the influx of people who were not (formerly) employed at Philips, because the company disposed of its council housing. Former and current Philips workers stress the changing character of their neighbourhood in these terms. There is some tension between (former) Philips families and the growing number of 'outsiders' in the neighbourhood. But it would be an overstatement to suggest that the neighbourhood therefore is becoming disintegrated. Like the 'employees' who felt superior to the workers 30 years ago, Philips workers now feel superior to ethnic minorities, broken families, and people on welfare. What (former) Philips workers interpret as a decrease in the status of Drents Dorp is upward social mobility for most of the newcomers. Like the migrants in the twenties and thirties, they see their move to Drents Dorp as a rise in respectability. It is important to realize that the newcomers in Drents Dorp who never did work at Philips could move in not only because of the privatization of

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Philips' council housing but also because of the mobility of (former) Philips workers. The latter moved to other, often better, neighbourhoods and thus vacated large parts of the housing stock.

In this light, we do not feel justified in saying that the neighbourhood suffers from disintegration. It is beside the point to describe the consequences of deindustrialization in the case of Drents Dorp as a process of disintegration and disruption of stable community life. Drents Dorp was changing long before there was any sign of deindustrialization. The case of Drents Dorp also makes clear that the way deindustrialization impinges on the everyday life of people in a specific locality is mediated by welfare-state arrangements (cf. Burgers, forthcoming). Philips' housing stock was created by provisions of the national government in the first place. Furthermore, its prese.rvation was made possible by using the relatively benevolent Dutch social housing infrastructure. In fact, Philips' disposal of its housing stock went almost unnoticed by the inhabitants.

Besides concrete institutional arrangements, attention should be given to the specific social history and culture of Dutch labour relations (Burgers & Kloosterman, forthcoming). Because of the traditionally corporatist political culture, private employers, especially the bigger ones, are expected to assume substantial public responsibility. That holds especially for Philips; as we noted above, for a long time Philips was seen as a model for social policy of private employers. But it is national political culture that matters, rather than the policy of an individual corporation. This can be illustrated by the fact that Philips was less reluctant to cut back employment in other countries; for instance, many jobs were cut in its compact disk plant in Hasselt, only about 50 kilometres from Eindhoven but across the Belgian border. The question is, of course, whether this national culture of labour relations can withstand further economic decline.

It is clear from the case study of Drents Dorp that the debate on the local consequences of economic restructuring needs specification as to the social-historical background of the locations involved, the kind of economic activities which are restructured, and the welfare-state arrangements which mediate between global economic development and everyday life. Simplistic schemes of stable local communities disintegrating under the dynamics of modem capitalism blur rather than enhance our insight in the social consequences of the emergence of a postindustrial city.

Notes

In his already classical study The Three Worlds of Welfare Capitalism (1990), Esping-Andersen developed a typolology in which he distinguished liberal, social democratic, and corporatist welfare states. The Netherlands has had its share of deindustrialization. Between 1979 and 1990, 175,000 jobs were lost in manufacturing and construction (K1oosterman and Elfring, 1991). The share of these sectors in total employment fell by 12.3 per cent, from 40.6 per cent in the period 1960-67 to 28.3 per cent in the period

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1980-88. Compared with both the EC as a whole and the US, this was a severe decline. In the same period, the EC and the US were faced with declines in industrial employment of respectively 6.1 and 6.8 per cent (Kloosterman and Elfring, 1991).

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