The study described in this report sought to determine why industrial plants become no longer economically viable and how to prevent this from happening prematurely. Conducted in Cleveland (Ohio) for the Cleveland Tomorrow Committee, the research was done by the McKinsey and Company staff, who interviewed chief executives, conducted case studies, and surveyed trade literature concerning these industries. The three critical factors they identified in Cleveland's decline were high union labor costs, increased foreign competition, and low capital investment. Chapter 1 of this study analyzes the causes for a plant's loss of economic viability and raises questions about plant closing decisions. Chapter 2 describes several plant closures in Northeast Ohio, caused by declining markets, increased competition from more efficient producers, and obsolete facilities. Chapter 3 reviews four cases in which labor relations issues played a direct part in the threatened closure. In all four cases, work rule changes significantly reduced labor costs, and improved labor-management relations promise productivity improvement in the future. Chapter 4 introduces two cases in which no explicit threat to close was made, but in which, with job security at stake, changes were made that induced management to locate new facilities close to existing plants that were becoming obsolete. Chapter 5 summarizes the findings of the earlier chapters and suggests some public and private policy conclusions. (KC)