Who didn’t see this one coming?
The recent revelation that Northwestern Mutual Life Insurance is mulling the possible sale of Russell Investments should be a surprise to exactly no one, even if they know nothing about the history of that company.
For those who don’t, or need a refresher course, Russell Investments is a pension and investment advisory company, founded and for years based in Tacoma, that had a global reach through its services of evaluating money managers according to such parameters as return and risk portfolio.
It later expanded into offering investment services for its clients; the company didn’t make investment decisions such as what stocks to buy itself, but instead was a “manager of managers,” assembling portfolios tailored to the goals and risk tolerances of the pension funds. To the extent it had a public profile, it was through the stock indexes it published that, if not as well known as the Dow Jones industrial average or the S&P 500, were more closely followed by investment professionals for providing more useful insights into the broader market.
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Russell might not have been globally known outside of its business niche, but it was certainly well-known in Tacoma. It would be hard to find a donor plaque for an item of civic infrastructure of recent vintage that didn’t include the Russell name somewhere on it.
That Russell was Tacoma-based was more than just an economic boost and a philanthropic mainstay for the community. It also was a source of civic pride. There was no reason beyond historical accident for Tacoma, of all out-of-the-way places, to be the home of such a company — along with its remote location, Tacoma didn’t have a financial services sector even of Seattle’s size to explain Russell’s presence.
And, as those who know the sad saga, Seattle is where Russell wound up. The immediate influence was a screaming deal on office space in downtown Seattle, a collateral effect of the Washington Mutual debacle; the sense that Seattle seemed a more appropriate location for such a company might have played a role as well.
But that move occurred in 2010. The seeds were sewn in 1999 when the Russell family sold the company to Northwestern Mutual, based in Milwaukee (which, come to mention it, isn’t a financial center on the order of its large neighbor down the road). At that point Russell ceased to be a local company – not in terms of its local presence or involvement but in terms of where decisions are made.
That matters a lot, and if you don’t think so ask the members of the Machinists union who grudgingly and narrowly approved a contract extension with Boeing (at least we think they did; given the twists and turns in this story already, check back regularly for further developments).
While the negotiations, the vote and the affected workers might have been here, the company that dictated the terms and made the threats to build the 777X elsewhere isn’t headquartered here; neither, it ought to be mentioned, is the parent labor organization that pushed for a vote, and then a second vote.
Would the story have played out differently had Boeing not moved its headquarters to Chicago? Perhaps not — labor relations weren’t exactly placid when Boeing was based here, one reason why it now isn’t. But the move of decision-making to some other spot on the map rendered Boeing’s Puget Sound presence, to use a bit of hyperbole, just one more branch office, much as the purchase of Russell by Northwestern Mutual rendered it as one more remotely located subsidiary.
Unless it’s spun out as an independent, that’s what Russell might be with its new owners. If it’s bought by an even larger financial services company than Northwestern Mutual, it could get moved again, on the rationalization of “what are you doing in a backwater like Seattle? You need to be on or near Wall Street.”
If Russell departs, Seattle won’t notice the way Tacoma did. If Jeff Bezos ever tires of Seattle and decides to move his company, or sells it to someone who wants to, that they’ll notice.
With the likelihood of Russell moving back to Tacoma about as great as Boeing moving its headquarters back to Seattle, Tacoma is moving on, too. At some point Tacomans may even start referring to what was the Russell building as the State Farm building.
But if you want to know why we keep harping on the importance of Tacoma growing its own companies, and why it’s a never-ending process (at least it is if you want to sustain your economy), go knock on the door of 909 A St. and see if you find Russell Investments — or, perhaps in a few years, try the same thing up at 1301 Second Ave. in Seattle.
Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at firstname.lastname@example.org.