How an American City Can Become a Manufacturing Hub

Introduction

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Podcast Introduction

2:08Hello and welcome to another episode of the Odd Lots Podcast. I'm Tracy Allaway. And I'm Joe Weisenthal. Joe, do you ever discover little cultural blind spots that you had in your life? I'm sure. Yeah, I'm sure. Where are you going with this? So I discovered one recently, and it kind of led to a minor epiphany for me, but I had heard the Billy Joel song, Allentown. I had never watched the video. And in preparation for this episode, I watched the video, and suddenly a bunch of Simpsons references made sense to me.

2:41Interesting. And I don't mean to be very grand millennial by making Simpsons references here. Isn't it depressing how if you make a Simpsons reference to like someone younger in the office, they look at you with a blank stare? I know. It's really depressing. I just don't do it anymore because it's so depressing. I know. And here I am doing it on the podcast. But I actually... Because we're the same generation, so we can do it among each other. We can do it. This is a safe space. Our listeners might not get it. So the reason I bring it up, though, is for kind of a serious point, not just to talk about Billy Joel music, although now that I think about it,

3:12he has a lot of songs about, like, the political economy of America. But it is because Allentown, Pennsylvania, basically became a poster child for deindustrialization and the hollowing out of American manufacturing in the 1980s. That was a great intro. Oh, thank you. And of course, right. So we know, and obviously over the years on Odd Lots, we've talked a lot about industrialization, deindustrialization, reindustrialization. Great. All very interesting themes.

3:43Everyone maybe, like, feels in their gut somehow that they're, like, pro-reindustrialization, whatever that means, right? But then the gap between, like, somehow, like, we feel good about producing physical things. We want more of that. What does that actually look like in practice? What are these jobs? What are these potential industries? Then it suddenly gets much more hazy, right? People don't know what that actually looks like in practice. Right. How do you actually go about implementing industrial policy on a local scale? And I have to say, the other thing I found out

4:14in researching for this podcast, I had no idea, but Allentown, Pennsylvania, was also the site of the first, some of the first mass-produced transistors. Yeah. Which are, like, the precursor to semiconductors of today. Can I say what the random thing about Billy Joel? Well, before we go further. You know, because obviously you mentioned he talks about, you know, a lot of political economy things, including, of course, in We Didn't Start the Fire. The final line of that song is, like, something about the Cola Wars. And he's like, I can't take it anymore.

4:45And I just think it's really funny that the Cola Wars, Coke versus Pepsi, is the thing that tipped him over the edge. Like, all the Vietnam War, all these things happened, and finally the thing that tipped him over the edge was the Cola. Anyway, sidetrack, but I just had to get that out. We should do a whole episode on Billy Joel songs at some point, including my favorite karaoke standard, which is Downeaster, Alexa, all about the decline of the fishing industry. But anyway, Allentown, Pennsylvania, let's focus. We do, in fact, have the perfect guest.

Interview with Mayor

5:13We're going to be speaking with the mayor of Allentown, Matt Turk. So thank you so much for coming on All Thoughts. It's un gran placer. It's a huge pleasure to be here. That actually helps, because we are at the City Lab Conference in Madrid, right. And we just saw you have a medal from the marathon over the weekend. Tell us about that. I landed on Saturday, went right to the Marathon Expo, picked up my bib. 24 hours later, I was starting the Madrid 42K. Not 26 miles, but 42 kilometers marathon.

5:44It was hot. It was hilly. It was beautiful. Great crowd support. Phenomenal marathon. Finished the marathon and then went right to a reception for Bloomberg City Lab. And I've been nonstop since then. That is dedication to both cardio and city planning. So congrats on that. I mentioned Allentown, the song and the video in the intro. And I discovered there's some controversy about this because apparently the steelmaking was more in Bethlehem rather than in Allentown.

6:14So should Billy Joel have been talking about semiconductors instead of steel? I mean, he could have been talking about Mack Trucks. He could have been talking about silk manufacturing. That's like the local controversy is that like he's talking about, you know, Bethlehem, but he didn't rhyme as well with shutting factories down. But then there's, you know, I was surprised. I thought that everyone in the country felt like not great about the song Allentown. Then I met the mayor of Toledo and he was like, that's a great song. It's about the working man and blah, blah, blah, blah, blah.

6:45And I was like, what are you talking about? Like this is the song that like everybody in our region and the Lehigh Valley just like dreads hearing because it's about this like different era that maybe was like felt right in the moment in 1982. Like that maybe kind of captured the moment. But in 2026, it's like it doesn't sound further from, it couldn't sound further from the truth. Give us like a little Allentown history. Like what is the timeline when we talk about these sort of key industries that were once associated

7:17with the city of Allentown? What was the sort of peak of it? And when was the sort of trough? Yeah, I mean, so, I mean, the city was founded back in 1762. It had its revolutionary moment. We hit the Liberty Bell there, but it really picked up and incorporated in 1867 for the kind of reconstruction. And that's when the industry really started to, it started to industrialize like many American cities. Early industry was cigar manufacturing. So tobacco that was grown in Lancaster was shipped to Allentown for production into cigars.

7:50Silk manufacturing became a pretty big deal in that area. It was a place where silk could be brought in and then processed. In the early kind of 1910s, sort of around the First World War, Mack Truck moved to Allentown from Brooklyn. This was like 1915. And industrial production of those vehicles started. We manufactured Volte bombers, a particular type of bomber for World War II. This is all coincident with Bethlehem's steel industry rising up.

8:23The industrial work continued through to, I think you guys mentioned the transistor and Western Electric. That was kind of a big story. But then like a lot of places, manufacturing started to decline. Not as strongly in Allentown as other parts of the country, but the Western Electric plant eventually shut down. What year were we talking about with that? Western Electric was in the 70s. It actually, and it morphed into something else. It eventually became Broadcom.

8:54So there's still some manufacturing. It didn't necessarily exist in the city. It spread out into suburban parts of the region. There's still some chip manufacturing occurring or wafer polishing occurring in the area. We still have the kind of muscle memory of semiconductor manufacturing. But again, the industry evolved and changed. The Volte aircraft shut down when there was no need to produce bombers anymore. Mack Trucks continued operations in Allentown, but in the 80s shifted most of its production

9:26to a plant in Mukunji that still operates today. A lot of those old Mack plants were acquired by an organization that I used to work for, the Allentown Economic 12 Incorporation, and repurposed. Initially repurposed for, this is the 80s. The thought at the time was that it could be an incubator facility, a business incubator. It did become that, but it was more of a manufacturing incubator. These were old sawtooth roof buildings with 12 to 18 foot ceilings.

9:59So some big spaces, but not a lot of clearance. They weren't suited for modern manufacturing. That's what a lot of the building stock in Allentown looked like. But the production was still occurring in some capacity in the city, definitely in the region. When the steel shut down in Bethlehem in 1898, I think was when they did their last cast, that's when, leading up to that, the region had already started to think about how to diversify, how to build on the Western Electric,

10:30the semiconductor manufacturer. Lehigh University was a source of engineering talent. They started to diversify out into life sciences. So there's some precursor drugs that are manufactured there, some medical supplies that are still manufactured there, another one that I didn't mention was Air Products. So it's an industrial gas manufacturer. I know you guys were recently talking about helium. Yeah. Air Products is like... It's so fun talking to a listener. That makes it so easy. It's just like helium. I have helium.

11:01So helium is something that Air Products manufacturers. It's one of those head scratchers when you're talking about a region's industrial output to say like, we make an element, like an elemental element, like the lowest area of Thomas Kitt. Yeah. It's hard to describe how that happens, but that was founded in Allentown. Actually, it was founded in Tennessee and moved to Allentown in the 50s. But a lot of that production was still occurring. The kind of civic leaders of the time in the early 90s is they could foresee the end of Bethlehem Steel

11:32when it was acquired. I think it was acquired by Arsor Middle, but they could see the end in sight. And so they made a conscious effort to diversify working with the Commonwealth of Pennsylvania to stand up some tech-led economic development, which had its, it was successful in a few places. The biggest success in attracting investment or the biggest kind of economic development story for the region was in 2006 when the region convinced Olympus, which is the manufacturer of surgical devices

12:02to relocate its North American headquarters to, they were out in suburban Bethlehem. But that's been the character, right? There's, it's a very diversified economy. Today, it's still about 17% of the jobs are manufacturing jobs. So it's much higher than many other parts of the country. And it's held pretty steady. So that's... That was great. Yeah. That was amazing. Well, that was a fantastic summary. But on that note, I mean, I think a lot of cities and towns in America,

12:33whether they're in the Rust Belt or Pennsylvania or the South or wherever who have gone through this deindustrialization phase, they all say they want to build back their manufacturing sector in some way. But it feels like Allentown has kind of gone about it in a slightly different way in that you've had a sort of grand strategy or vision for how to do that rather than try to attract just like individual businesses in a piecemeal way. Can you talk about

Formulating Industrial Plan

12:59how you actually formulated that plan? Yeah. So I started working for the Economic Development Corporation in 2008. And we had the manufacturing incubator. It's called the Bridgeworks, the manufacturing incubator that was in place at that time. It was trying to pivot away from manufacturing when I got there. We also had an industrial building that sort of funded our existence where we had a T-shirt manufacturer, an industrial valves manufacturer, and somebody who is building

13:29large-scale tents. As tenants. And they were kind of keeping the organization alive. There was this, you know, in 2008, it was right kind of in the early days of the global financial crisis. There was some concern about how we would recover economically, what we would do. But these early investments in manufacturing were, from what I could see, looking ahead, something we shouldn't turn our backs on. There was this healthy, seemingly healthy manufacturing economy in place in the Lehigh Valley. And it felt like,

14:01it felt like there was an opportunity to build for the future. I worked with our CEO, our executive director at that time to start thinking about how we might position the area as a place where you could bring smaller footprint manufacturing. We knew we had this building stock of buildings that were smaller than 100,000 square feet, sometimes on multiple stories. So it was a kind of gravity flow model of manufacturing where you would load in raw material at the top of the building.

14:31And as it gained weight, it would drop down the building for final finishing on the ground floor and then shipping. We felt like there was an opportunity to kind of leverage the existing industrial inventory to attract manufacturers that were more boutique. I remember reading an article in the Wall Street Journal in maybe 2009 or 2010 about a bag manufacturer in San Francisco who was like very proud of being in San Francisco.

15:02I was like, this is, I think there's something here for us. I reached out to the manufacturer at the time. This was kind of around the same time as the rise of like makerspaces and 3D printing was kind of coming online. It looked like you could do some stuff in a smaller form factor. And we kept thinking like this is a chance for us with these strong roots in manufacturing to bring some of it back. We got deep into it and really explored. We formed something called the Urban Manufacturing Alliance in collaboration with San Francisco

15:32and the Pratt Institute in New York and our friends in the Philadelphia Industrial Development Corporation and in Detroit to just kind of bring cities who were interested in manufacturing together. We started talking about reshoring or onshoring at that time but it felt distant. data centers

16:05need electricity AI needs copper reshoring needs steel and gold's run may tell you something about how the world is repricing money and debt. All of those point back to real assets. The Rax ETF is an actively managed one-stop real asset shop from gold to commodities to natural resource equities adjusting as conditions change. Visit VanEck.com slash R-A-A-X pod to learn more and investors should consider the investment objective risks, charges and expenses of the fund carefully before investing to obtain a prospectus

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17:39Message and data rates may apply. JPMorgan Chase Bank N.A. Member FDIC Copyright 2026 JPMorgan Chase and Company Support for the show comes from Public. Public is an investing platform that offers access to stocks, options, bonds, and crypto. And they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called Generated Assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific like biotech companies

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18:41And paid for by Public Holdings. Brokered services by Public Investing. Member FINRA SIPC. Advisory services by Public Advisors. SEC Registered Advisor. Crypto services by ZeroHash. Sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete disclosures at public.com slash disclosures. I'm glad you brought up the sort of maker 3D printing phenomenon because- That was such a thing around that time. Yeah, it was, but it's forgotten, isn't it? Because when we talk generally about the tailwinds or the growth of the 2010s,

19:12it's almost entirely people talk about tech, right? And software, et cetera, the internet and all that. And then we talk about post-COVID, this re, you know, this new enthusiasm for reshoring. But it was like this forgotten chapter that within, particularly the first half of the 2010s, the various maker spaces and the 3D printers and people were really excited about that, kind of fizzled out like that, like that mini movement. You don't hear as much about it. Fizzled out for sure. But so we did a re-industrialization strategy in 2014. We worked with somebody to evaluate

19:43our total industrial stock. I had at that point moved on to work for the regional economic development corporation, but was still involved with this urban manufacturing alliance. At the region, we could see that manufacturing was still important. I had a better sense of what other types of manufacturing was occurring in the area. We developed a strategy, kept thinking, what I kept seeing at the region was that there is real demand to be in the Lehigh Valley and in these smaller footprint buildings.

20:13So we saw inquiries all the time for buildings between 40 and 80,000 square feet. But this was a time when the Lehigh Valley was pivoting its economy toward transportation and warehousing, building million square foot buildings with 24 to 36 foot ceilings. Really, as this other technological trend of the e-com started to show up, this was the high demand for industrial space. So we had lots of interest from small manufacturers, particularly coming out of places like Brooklyn,

20:45where maybe it was not quite the place to be, who wanted to spread their arms a little bit and maybe have access to talent. They were trying to be in the Lehigh Valley, but we didn't have a ton of building space to meet their needs. So when we built that re-industrialization strategy, a big part of it was how do we position the built environment for this demand? And some of that is, you know, rehabbing existing industrial buildings as, surprise, surprise,

21:15industrial buildings. So it's continued on from there. Yeah, so this is another thing I learned about Allentown. I'm full of Allentown facts at the moment, but apparently Allentown is within a day's drive of 40% of the population in the U.S. Is that true? Yeah, it's over a hundred million, many more than a hundred million people. And that's what made it such a strong destination for some of the e-com. But it's also like that, you know, you go back to like why it is a vibrant economic region is that

21:46it's a great place for weight gaining industries, right? So the other big thing we worked on at the Regional Economic Development Corporation was we recruited Ocean Spray to make most of its great cranberry juice. in the Lehigh Valley. Sam Adams was brewing most of its beer in the Lehigh Valley. Was it weight gaining industries? Anything you add water to basically, right? So you when you have the cranberries come into the plant like to become cranberry juice, you add a ton of water.

22:17It doesn't make sense to produce that far away and then ship all that water. So because you're not just, you know, within a day's drive of 40% of this population, you're also close to New York. So a lot of like Keurig, Dr. Pepper has a big production plant. There's a lot of food manufacturing that occurs there as well. And then on the manufacturing side, you also, because of the e-comm, because of the food manufacturing, you saw a lot of packaging and bottling manufacturing show up.

22:47So one of our most recent in Allentown successes was recruiting a company called Schlesz Bottle that manufactures bottles for beverages. And they wanted to be close to the production point. So the manufacturing bottles in Allentown, filling it with beverages and shipping it back to New York. This is so core, like Ricardo Hausmann coded stuff. Like, okay, you have this one industry and then you have innovation and an adjacent industry. Super. Monkeys swinging from trees. Yeah, I'm also just like learning all these terms.

23:17You know, gravity based manufacturing or weight gaining. This is all fantastic stuff. Weight gain industry is, I think, what we're both doing in Madrid. That's what we're both doing in Madrid. That's really well done. That's jamon gaining. That's right. Yeah. We should have run a marathon and then we could have compensated for all that. What are like, you know, obviously this is all against the backdrop of this vortex of manufacturing going to China largely, et cetera. When people think, you know, you're at a conference like this and probably a lot of mayors are

23:49interested in re-industrialization,

Onshoring and Reshoring

23:51et cetera. What types of industries are good candidates generally for thinking of like, what should be built locally? Like something like plastic bags or bags. It's like, well, I don't know, maybe that could be offshore. What are like strong candidates for what is durable here? It's odd that you mentioned plastic bags because one of the things we recruited as it was kind of leaving the world of economic development and going to politics was a Turkish plastic bag manufacturer. So that was kind of interesting. So one of the things that

24:22distinguished the region and I think is good for onshoring, and I want to go back on the onshoring thing for a second. When we developed this strategy, when we're talking about onshoring and reshoring back in the early 2010s, there was no, like we didn't know a global pandemic was going to come and disrupt supply chains. we were thinking about the logistics of making things close to the customer. And I was thinking a lot about the theft of IP in China and how it was kind of like those components

24:53of globalism didn't make a ton of sense. You were kind of giving away your most precious resource. So a lot of it was driven by how do you kind of capture the spirit of American manufacturing. Now COVID hit and all of a sudden that's what brought into stark relief. That's what made it make sense. So one of the things that I think makes a ton of sense and we still see a lot of in Allentown, whether it's the transistors or it's the bag manufacturing or Westport axle manufacturers axles for Mack trucks

25:24in Allentown area, it's components, right? It's how do you de-risk the supply chain by diversifying your component manufacturing? That makes a lot of sense in cities because you're not building the whole truck there, right? And to build the whole truck you need something like Lordtown or Lordstown, you need River Rouge, you need the enormous factories. When you're building the components, whatever those components might look like, you can exist in a much smaller

25:55form factor, something as small as 40,000 square feet. But even to get down to what we were calling craft manufacturing at the time, you might be able to exist in a much smaller space and perhaps the ground floor of a mixed-use building. And that's what the next step for us was, and what more cities should be doing, I think, is making sure that your zoning allows for light industrial to take place in residential neighborhoods so that you're not kind of, you have to

26:27make sure that you allow this stuff to happen in your city. And the new manufacturing, you know, we think about Pittsburgh in the early part of the 20th century as being so thick with smog and you couldn't even see across the river. We were, you know, you still see pictures of, I remember being in Tianjin in China in 2017 and, like, you couldn't see as you were going across the bridge. That's not what manufacturing really looks like anymore. So you can kind of do that in cities. So as cities are thinking about what type of manufacturing

26:57you might try to attract, I think high-value component manufacturer, light touch, but high-tech. Again, taking advantage of the resources that we have in American cities and taking advantage of the fact that, you know, people now are choosing where they're going to be first and then what they're going to do second. And the cities that have a locational advantage on cost