Tracy Alloway and Joe Weisenthal speak with Matt Turzai, Mayor of Allentown, Pennsylvania, about the city's strategic approach to reindustrialization and manufacturing policy implementation.

The conversation explores Allentown's transformation from the deindustrialized city depicted in Billy Joel's 1982 song to a diverse manufacturing hub leveraging federal programs like the CHIPS Act and Inflation Reduction Act.

Turzai discusses the city's unique geographic advantages, demographic changes, and practical challenges of implementing industrial policy at the local level.

From Steel to Semiconductors: Allentown's Industrial Evolution

Allentown's industrial history spans from cigar and silk manufacturing in the 1800s to MAC Truck production starting in 1915 and Vultee bomber manufacturing during WWII.

Western Electric operated a transistor manufacturing plant in the 1970s that eventually became part of Broadcom, maintaining the region's semiconductor manufacturing capabilities.

"The region had already started to think about how to diversify" when Bethlehem Steel shut down in 1998, leading to investments in life sciences and industrial gas manufacturing - Matt

Air Products, founded in Tennessee but moved to Allentown in the 1950s, manufactures industrial gases including helium, representing the complexity of modern manufacturing.

Strategic Reindustrialization Through Small-Scale Manufacturing

The city developed a reindustrialization strategy in 2014 focusing on buildings between 40-80,000 square feet to meet demand from boutique manufacturers leaving expensive urban markets like Brooklyn.

"We formed something called the Urban Manufacturing Alliance in collaboration with San Francisco and the Pratt Institute in New York" to bring cities interested in manufacturing together - Matt

The strategy leveraged existing industrial building stock with "gravity flow" manufacturing models where raw materials enter at the top and finished products exit at ground level.

High-value component manufacturing offers better reshoring opportunities than full assembly plants, requiring smaller footprints while diversifying supply chains.

Geographic Advantages and Weight-Gaining Industries

Allentown sits within a day's drive of over 100 million people, making it ideal for "weight-gaining industries" that add water or bulk to products near the point of consumption.

Ocean Spray produces most of its cranberry juice in the Lehigh Valley, while Sam Adams brews most of its beer there to avoid shipping water long distances.

"Because you're not just within a day's drive of 40% of the population, you're also close to New York" attracting food manufacturing and packaging companies - Matt

Schott Bottle recently located in Allentown to manufacture bottles close to beverage production facilities, exemplifying the supply chain clustering effect.

Federal Funding Success and Implementation Challenges

Turzai secured a $20 million federal investment through the Economic Development Administration's Recompete Pilot project targeting areas with high prime-age employment gaps.

"We dialed into a particular neighborhood and saw that in that area is about 12% prime age employment gap" in a community of 23,000 people - Matt

The Bloomberg Harvard City Leadership Initiative helped the city learn to use data for federal grant applications, starting with a Safe Streets planning grant.

"As soon as November 5th, 2024, we went into overdrive to make sure that we weren't at risk of losing anything" from federal programs - Matt

Mixed-Use Zoning and the Future of Urban Manufacturing

The city passed form-based zoning reform in 2024 that focuses on building appearance rather than interior use, allowing light manufacturing in residential areas.

"Manufacturing doesn't look like Pittsburgh in the early 20th century with smog so thick you couldn't see across the river" enabling urban integration - Matt

When MAC Trucks built worker housing next to their plant in 1923, "people would walk to work and children saw people walking to work with lunch boxes," creating visible connections to manufacturing careers.

Modern zoning should allow craft brewing, small garment assembly, and bespoke manufacturing that adds neighborhood vibrancy without industrial pollution.

Political Dynamics and Defense Manufacturing Opportunities

"Pennsylvania seems well situated to be a center of defense manufacturing" building on the region's history of producing ships and bombers for World War II - Matt

MAC Defense currently manufactures heavy-duty trucks for the US military in Allentown, representing existing defense manufacturing capabilities.

Eli Lilly announced a $3.5 billion investment just outside city limits that will create 850 jobs, with the mayor focused on ensuring city residents can access these positions.

"As a mayor, your job is to meet the needs of your residents" regardless of national political dynamics, though swing state status provides federal attention - Matt

Resources Mentioned

The Wall Street Journal Lifetime Guide to Money Strategies for Managing Your Finances

isting industrial inventory to attract manufacturers that were more boutique. I remember reading an article in the Wall Street Journal in maybe two thousand and nine or twenty ten about a bag manufact