As 1,246 workers at the former Mylan Inc. (now Viatris) factory in Morgantown prepare to join the ranks of jobless West Virginia, they can look back to the 1980s to determine the source of their unease.
It was the decade when American companies decided that their primary responsibility was to shareholders – the people who invest in a company for the purpose of earning a good return. The other stakeholders in a company’s success – its employees, the communities where companies have factories, and the like – are of secondary concern.
Mylan has grown from a West Virginia-based company to a Pittsburgh-based company to a company that is part of a European-based company. As the Morgantown location became a smaller part of the larger company’s operations, its role in its owner’s success became less important, and now it is consumable.
Local businesses with their main activities in their home state are more invested in the success of their state and more invested in their employees. As West Virginia businesses have been consolidated into larger operations, their relative usefulness to their new owners diminishes. It is much easier to close a factory in a place you rarely visit than to close one in the city where you live.
Some West Virginia businesses have survived this trend of shutdown and shutdown. Banks come to mind in this regard. United, WesBanco, and City National are West Virginia-based banks that have retained their headquarters in the state as they have grown into influential regional corporations.
If West Virginia is to stop this cycle, when it comes to buying their businesses from outside and shifting their jobs elsewhere, residents will have to become the predators in the M&A game, instead of the prey.
It won’t be easy, but it will require changes.
On the one hand, West Virginia will need capital to start and grow businesses in the state. It takes money to make money, and one of the problems with a low per capita income state is that few of us have the assets to invest.
The state also needs a culture of entrepreneurship. Many West Virginia residents would love to start a business, but they need help making sustainable business plans. Help is available; people need to know how to access it.
Another concern is the lowering of barriers to entry. The state government has made the process of obtaining a business license easier, but businesses face regulations, tax requirements, and other hurdles. One of the main barriers to entry is infrastructure. The lack of high-speed internet and public sewer service in much of the state is holding back West Virginia.
Unrealistic? Pie in the sky? Not really. However, these are generational questions that go beyond what a government official, university president, or person in the private sector can do. It won’t be easy, but the alternative is another Mylan.