I am a native Detroiter, and though I moved to Arizona at the start of high school, I remained in touch with the Motor City in a personal way well into my twenties.
As a little kid I can remember the thrill of seeing the Cadillac assembly plant on the way to Grandma’s. Or the blast furnaces making the sky glow orange on cloudy nights. Or seeing the latest models in the lobby of the General Motors Building on West Grand Boulevard (and the cool tunnel under the Boulevard to the Fisher Building across the street). Or the introduction of new car models each September, searchlights piercing the sky.
Later, while in graduate school, I had a summer job with a Ford supplier that took me to the executive suites of Ford and to the Lincoln-Mercury Division too, headquartered then in the wood-paneled hallways of Ford’s first Dearborn office building. As I noted here a few days ago, I once even applied for a job on the Dodge assembly line.
People in Detroit didn’t work at Ford, they worked at Ford’s, possessive as if they worked for Mr. Ford (because in many cases their fathers had worked for Mr. Ford). Even the freeways in Detroit told you who the important people were — the Edsel Ford, the Walter P. Chrysler, the Fisher (it was the Fisher Brothers that built GM car bodies), the Walter P. Reuther (the great United Auto Workers leader).
It was the quintessential American industry and it was the “Arsenal of Democracy.” During the last year of World War II, Ford was assembling one B-24 every 63 minutes. The assembly line was over a mile long. Chrysler made Sherman tanks and anti-aircraft guns.
You grow up in Detroit, the automobile industry is in your blood. At least it’s still somewhere in mine.
So what has happened that makes so many Americans willing to let the American auto industry go down the drain? Not only that, but as commenter Eric notes, with a “vindictiveness that pervades” so much of the discussion.
How in fact is stiffing Detroit any different than the way New Orleans has been treated?
OH, and New Orleans died of corruption and mismanagement, as is Detroit.
Understood Emmett, and perhaps even true to some arguable extent.
But the people who live and work there deserve better.
Not saying it’s fair, but between the unions, the inability to compete with Japan, and greed and mismanagement at the top, I think the auto industry has metastasized from an example of American industry at its finest to a symbol of much that we don’t like about our country.
Yeah, those union workers got 6 figure salaries so need to be punished in any bailout, unlike those bankers who worked for pittances. Another example of a former great nation scapegoating the people who made it great.
Indeed, isn’t it the responsibility of unions to negotiate the best deal in wages and benefits they can get for their members? It isn’t, so far as I know, the union’s responsibility to protect the corporations from mismanaging themselves into bankruptcy.
I like Josh Marshall’s proposal. Don’t bail the car companies out directly. Just assume their healthcare costs for employees and retirees. Kill two birds with one stone that way.
We have to bail out Detroit, for the simple reasons stated, but to sell it to me under a need to “retool” irritates me. That is the responsibility of any decently run company. And given the difference between the production cost of a pickup and the current sales price I think perhaps there was sufficient capital available to retool.
We have watched numbers of industries tank without this kind of bailout. Given the overall consequences I understand, but I watched Texas oil tank without concern, the northwest timber industry over the spotted owl…the examples are plenty; we might as well quit talking about concern for employees and admit we don’t want to watch 10% of GDP tank.
On one hand, I hate to see people lose their jobs and their homes. On the other, these are the same people who have, for years, insisted on getting wages two and three times what we pay teachers in this state (who also have unions) for doing work that requires a high-school education (or less). Their managers are the same people who have been selling high profit margin gas guzzlers to an equally complicit American public and gloating about it…until now.
While I empathize to an extent with the plights of individual families, there are many families in the same or similar situations who haven’t done nearly so much to bring this upon themselves. Part of me does want to watch 10% of the GDP tank…part of me doesn’t. This is really complicated, but for “Detroit” as an entity. Not much sympathy here.
Amber, as I have just posted, the base pay for auto workers is $28/hour. There is nothing unseemly about that amount.
If teachers make less than autoworkers, shame on the teachers.
You’re kidding, right? $28 an hour for a job with a high school education? Plus benefits? I know many, many college educated people who would love a job like that. Not just teachers.
And no, not shame on teachers. Shame on America and shame on Detroit for valuing bolt tighteners (or whatever) more highly than teachers, social workers, electronics technicians, customer service reps, cashiers and all the other ‘skilled labor’ (white and blue collar) in this country.
It’s not the amount that’s unseemly. It’s the fact that a highly leveraged group of people are getting a wage that so many other equally hard working people are not. Before Detroit sees any ‘bailout’, the minimum wage should be raised to $10 an hour across the board. If that sounds unreasonable, try living on it.
Finally, if Detroit had put more money into innovation instead of buying advertising to sell the (again, equally complicit) American public cars it didn’t need and lobbyists to fight fuel economy standards (among other things) it might not be needing this bailout…or might not be needing it so much.
Quite frankly, I think this is just manufacturing’s version of the Darwin awards. It’s a sad moment for America to be sure, but that’s what we get for thinking we don’t have anything to learn from other countries and other countries’ companies. Japanese automakers are going to be hit hard, to be sure, but not like this. Oh, and while I’m ranting, maybe you could ask your friends and family in Detroit why American automakers never bothered making small, fuel-efficient cars here like they provide for the European market. They say because people won’t buy them…but who here had even heard of an SUV (other than people who actually needed one) until Detroit started pushing them on consumers because of their profit margins? Many countries in Europe have a tax based on weight of the vehicle (which makes sense in light of fuel efficiency and road maintenance issues)…do we even need to point out that the automakers’ pour obscene amounts of their cash into lobbying against these kinds of reforms here in the U.S.? Hell, we the people don’t even get a say. Thanks to the lobbying efforts most proposed reforms are DOA.
Gotta agree with Amber on the minimum wage.
As for unions, yes, unions should do what they can to help their members. In the case of the United Farm Workers, I don’t think many will dispute that farm workers need all the help they can get. In the case of the United Auto Workers, though, I think they crossed a line sometime back from helping their members to institutionalizing protectionism.
To be fair, this also applies to most of the unions in this country today, including teachers unions.
Yes, the auto companies are mostly to blame for getting themselves into this mess, but if the unions were truly concerned about their members, they should have lobbied harder to get the companies to be better competitors so their members had a shot at still being employed in 10 years.
Yes, in terms of social impact, helping all the people who will be (and are being) affected by this depression should take precedence over bailing out Wall Street. I still want to see a lot of these guys doing the perp walk, starting with Greenspan. But I digress…
Somehow, I’ve managed to work almost 25 years now full-time without the shelter of a union contract with a federally subsidized, marginally obsolete corporation. I’ve had to manage my own retirement and pay for my own healthcare. Nobody will bail out my retirement and healthcare if I get laid off and can’t find a job.
So why are UAW members deserving of special treatment?
There’s much here that can and should be discussed. Perhaps others will join.
For the moment, just this:
Teachers in Albuquerque are paid over a large scale ranging from $30,000 to nearly $80,000 a year for 183 days at 6.5 hours; or $25 to $66 an hour plus benefits. (That teachers may or may not work lots of extra hours and must stretch the pay through 12 months is certainly significant, but we are talking hourly wage.)
By that I, the father and father-in-law of teachers, am not saying teacher pay is adequate or appropriate to the value brought to our society. I’m saying the discussion deserves perspective.
And dirty, dangerous jobs deserve respect too. All jobs do.
And I too agree on the minimum wage, as I’ve written often on this site.
Richard raises some good points. One of my main objections to bailing out Detroit is that this isn’t their first rodeo, so to speak. They were busted on the almost the same thing during the 1970s oil crisis. Reagan came in and weakened the unions and lowered their corporate taxes. What did we get in return…short-sighted greed. Don’t think of a reasonable business plan that is fair to management, workers, and consumers and good for the long-term health of the company (and the U.S. auto industry as a whole). Focus on narrow interests (both the UAW and the automakers) and short-term gain. Maximize short-term profits and damn the long-term.
I’m convinced that if we provide the automakers with help, we’ll just get more of the same piss poor “planning” with the same results. A band-aid for the short-term and a fire drill in ten to twenty years.
All of this talk about people not buying cars is focused on the bad side. The good side is that maybe, just maybe (but my dark cynical side doubts it), Americans are waking up to the fact that just because someone is selling something doesn’t mean they have to buy it. We have too much capacity. Too much focus on replacing decent cars every three years just because we can. Too much focus on buying a ‘cool’ car instead of buying what we need. ‘we the people’ are guilty on that one but the automakers and their marketing and their five- and seven-year financing that basically ensures people end up upside down in their loans are part of the problem, not part of the solution.
I’d also like to point out that the automakers and the UAW, while protecting their own interests, were brutal on the same interests when they applied to their suppliers. Anyone remember Delco?
Again, I don’t like to see American manufacturing tank. I don’t like to see American workers who actually get a decent wage and decent benefits lose their jobs. I do, however, like to see hubris rewarded with the appropriate downfall. There’s just going to be a lot of collateral damage in this case, which is the only reason why some sort of intervention may be justified.
If you think standing all day on an assembly line is a great job that so many college graduates would want, think again.
Let us not forget the tax breaks given for buying the behemoths GM, Ford, Chrysler pushed.
Study the history of labor in this country and then criticize the unions. It is not all about wage and benefits; it is about safety, respect, and the future of the Middle class.
If it were not for unions most other workers in this country and abroad would not be earning what they do, let alone receiving good benefits.
John, I agree that unions were once vitally necessary. My father helped organize the merchant seaman’s union, and I heard many stories of the violence and hardship they had to endure.
However, I am of the opinion that most unions have outlived their purpose.
Ken started this discussion by asking “So what has happened that makes so many Americans willing to let the American auto industry go down the drain?”
Part of it is a perception that unions are part of the problem (and please, let’s discuss this: I want to learn more).
Part of it is a history of auto industry bailouts which never resulted in a decisive turnaround. You can argue that government was part of the problem, and I’m sure it was, and you can argue that consumers were part of the problem, and I’m certain that’s the case (just look at all the stupid Hummers and Avalanches in suburban driveways), but I don’t see Ford or GM or Chrysler leading in innovation. The Prius is from Toyota, the Insight was from Honda, and the next generation of high-efficiency vehicles will be mostly from Japanese companies.
Finally, for me, part of it is that I’m with James Howard Kunstler: the happy motoring age is over, and all the recycled fry oil and ethanol and other fantasy fuels aren’t going to change that.
I don’t want to see the entire industry go away, because I want to see the railroads rebuilt, and someone needs to build the buses and trolleys with which we’ll eventually be replacing most of our cars.
It might be good if we all stopped to remember that a bailout of the auto industry might be in the form of loans or equity purchases and that — if the company or companies recover — the taxpayers would get their money back just as they did in the case of the famous Chrysler bailout in the 1980s. It need not be set up simply as a handout.
A second thing to keep in mind is that bankruptcy would entail new contracts with the unions. You might think that a good and necessary thing, or not. One of the reasons the airlines chose bankruptcy of course, was so they could renegotiate with their unions — and cut wages and benefits drastically.
I happen to think high wages are a good thing, not a bad thing. For anyone. For everyone.
I think high wages and good benefits are a great thing. I think unions, specifically the UAW, have become the poster child for anti-union sentiment in this country and that their actions have made it hard for people to sympathize with the workers they represent and easy to bash all unions as mere money grubbers. They are held up (in my opinion rightly so) as an example of everything bad about organized labor. Problem is…that’s as far as it gets. People truly have forgotten all we learned in the early part of the century about how necessary good wages and safe working conditions are to the prosperity of our country. It isn’t just about ‘profitable corporations’ its about a prosperous citizenry (all of it, not just 1%).
I don’t think unions have outlived their usefulness. I think unions would bring about a huge amount of equity in our consumer options if they were strong and flourishing. Imagine a world where organized WalMart laborers earned a living wage and decent benefits and weren’t competing against each other for work hours and raises. They might be able to shop somewhere besides WalMart. Imagine if we had strong construction and trade unions again. Skilled laborers might not be forced into unsafe working conditions or forced to work as independent contractors responsible for their own healthcare and other benefits (and there’s the effect paying, or not, for those benefits has on their base pay). Imagine what would happen if global unions could get decent wages and safe working conditions for their members…stuff from China might not be so cheap anymore, maybe it would level the playing field a little and slow down the new “world’s biggest polluter”. There’s a lot of good that could come of it. A bitter pill, but perhaps worth the swallowing.
In recent history (IMO) the UAW has made itself part of the problem (as Richard pointed out) by focusing on short-term gains (money and bennies) over long-term solutions (insisting that the Big 3 position themselves for the future to the best extent possible).
Long-term thinking always seems to be the hard way and this country is addicted to the quick fix. Until we get over that as a country we’re going to have a rough row to hoe. I think better education would help, but you’re gonna be bucking 30+ years of anti-intellectual and anti-labor neocon crap. I voted for Obama because I think he has the stones to do it and, for once in the last God knows how many years, I feel like the president really intends to represent the interests of ‘the people’ to the greatest extent possible (as opposed to representing ‘the stockholders’ or ‘the corporations’ or ‘the lobbyists’).
There’s a good and related discussion of this topic on Jon Taplin’s blog (jtaplin.wordpress.com) in the post called “Where are the Customer’s Jets?”.
I can’t speak to the UAW specifically, but as for unions in general, I can chime in. I have been the member of a few unions myself (library & education fields), but I am also the daughter/sister/ wife/friend of life-long union construction workers. I remember as a child how we had to boycott certain products (such as grapes or the local newspaper) as a show of solidarity for other trade unions. Or how we had to struggle for months to make ends meet when the union was on strike and there was no income. We were taught it was worth it.
And, as for the high wages, I’d like to point out that in construction there is generally no sick time, no paid vacation time (some unions do deduct a couple dollars per hour out of your check and set it aside as a “vacation” fund). There are also a lot of times when there is no work–sometimes for months on end. As an annual average, it was not uncommon for my husband and relatives to earn only 8 months worth of income in a 12 month year. And you aren’t supposed to moonlight and take other jobs in the off times, either.
What’s more, before my husband joined his union, he worked in Arizona–a “Right to Work” state. That meant he earned far less than half of what he did in Oregon, where the unions had some strength. Imagine being out in the brutal Arizona sun 8 or 10 hours a day, bent over finishing concrete on fresh asphalt, with a surface temp of about 140 degrees, and then imagine doing it for years at $12 an hour with NO benefits of any kind! That’s what makes unions a good thing.
Incidentally, being in a union can make the difference between earning a mere $7.50 an hour with no benefits, versus earning $10 and hour with some paid holidays and sick days. Not all unions are raking it in for their members. And many of them are run by the members, not high-paid executives. They are looking out for the health and safety of their members as much as the wages. If they don’t, who will?