Shuttered factories, shattered lives in US rust belt

[Meddle]

Weeds have not had time to overtake factories shuttered in the wake of recent bankruptcies at General Motors, Chrysler and a host of suppliers, but the signs of shattered lives are spreading as the economically devastated region, dubbed "the rust belt" after its steel industry, fails to absorb the collapse of the auto industry.

Long lines at the unemployment offices. Empty shelves at the food banks. Boarded up businesses. Homes lost to foreclosure, their contents strewn on the street.

Michigan, the birthplace and home of the US auto industry, is the hardest hit.

"There's just no doubt that region has faced an incredible tsunami of events," said Mark Partridge, an economist at Ohio State University.

"It's really tough on the psyche... they've had one failure after another."

In the past ten years, Michigan has lost half its manufacturing jobs as the Detroit Three saw their share of US auto sales slide from 70 to 45 percent.

That's more than 543,000 people forced out of plants where the wages were usually good enough to pay for a nice house, a college fund for the kids and maybe even a cottage.

Most blame management for pumping out ugly, unreliable cars people simply didn't want to buy.

Some blame the union and its gold-plated benefits, while others say it's the government's fault for shifting the burden of healthcare costs to employers.

But simply put, GM, Ford and Chrysler had been losing market share to Asian automakers for decades.

They managed to post record profits in the 1990s by developing gas-guzzling sport utility vehicles, but were slow to match the smaller crossovers introduced by Toyota and Honda.

When fuel prices soared, the Big Three tanked.

The plant closures started in 2005 and the restructuring plans deepened as the economy slowed in 2007. The union made historic concessions. Management got focused on fuel efficiency and quality.

And then -- just when it looked like they might pull through -- the credit crunch and financial crisis hit in the fall of 2008. US auto sales fell to lows not seen in decades.

Ford survived with the help of massive loans it secured before credit dried up, but GM and Chrysler were forced into bankruptcy protection and a 50-billion-dollar government bailout.

Michigan went from having one of the lowest unemployment rates in the country -- 3.3 percent in June of 2000 -- to topping the list every single month for over three years.

More than 740,000 people here were actively looking for work in June as the unemployment rate hit 15.2 percent. An untold number have moved away or simply given up.

"I think there's a lot of hope," said Andy Levin, deputy director for Michigan's department of energy, labor and economic growth.

Governor Jennifer Granholm -- a charismatic and energetic speaker with close ties to President Barack Obama -- has been traveling the globe to pitch the state's resources to prospective employers.

She's making a major push to draw alternative energy jobs, touting the state's experience with advanced manufacturing and engineering its easy access to the shipping lanes and wind power of the Great Lakes.

State officials have also devoted millions of dollars to an innovative retraining program for unemployed and low-income residents and have launched a major tourism campaign promoting Michigan's miles of pristine shorelines.

"It's an incredibly beautiful place and we have all these incredible water resources and our manufacturing process and know-how," Levin said in a telephone interview.

"We can make things cheaper, faster, better than other places because we have the highest concentration of engineering talent."

The success stories fill 12 pages of a website set up by the state's economic development corporation to tout the "Michigan Advantage."

A 2.9-million-dollar investment by a medical device firm [[108 jobs). An 84-million-dollar expansion by an insurance company [[1,600 jobs). A new, 220-million-dollar plant to build batteries for hybrid cars [[498 jobs).

They pale in comparison to the 337,600 jobs Michigan has lost in the past year alone.

"The fallout from the shrinkage of the auto industry -- even in the best scenario -- we will be feeling that for years," said Charles Ballard, an economics professor at Michigan State University.

"The downward trend has been going on for 60 years, so it's not going to be fixed by Thursday. Even if they do the right things it'll take years before they bear fruit."


Copyright AFP 2008

Let's see, 2,200 jobs gained, 337,000 jobs lost. Seems fair, eh?




Will the last one out please turn off the lights?

[Dfd]

What do you all think of this idea.
Until someone figures out how to get Detroit rolling again, why not take advantage of what Detroit has to offer. It's ruins. People travel the world to see different ruins. A lot of people find them fascinating. This web site shows that there is a lot of interest in it. A smart entrepreneur could acquire buses, figure out routes, and so on. This could bring national or international attention to Detroit.
Maybe this idea has been visited before and I missed it. If it works I'll be up to take a tour.

[Patrick]

Those jobs are never going to come back. Ever. I still hear idiots talking about how these well-paying factory jobs could return one day. These are the same folks who will not put any effort into learning new skills.

[RickBeall]

It's going to be difficult employing 337,000 people to run the ruins of Detroit tour. But maybe if the tour guides unionize?

[Searay215]

I don't think anyone wants to tour our relics when there are so many around the world and here in the states. There are many that make ours look like Disney Land. Here are a few examples:

http://www.abandonedbutnotforgotten....utogallery.php

http://www.graveaddiction.com/abindex.html

http://www.rays-hill.com/turnpike/HOME.htm

http://www.dirjournal.com/info/aband...-in-the-world/

[Meddle]

60% of those jobs are gone permanantly. Even if the auto industry were to rebound, the plants would be re-tooled to use more automation and less humans. They'd also use more out of state plants to avoid the UAW labor rates.

Detroit is going to have to find a new way to survive without the auto industry.

[Maof]

I don't think anyone wants to tour our relics when there are so many around the world and here in the states. There are many that make ours look like Disney Land. Here are a few examples:

http://www.abandonedbutnotforgotten....utogallery.php

http://www.graveaddiction.com/abindex.html

http://www.rays-hill.com/turnpike/HOME.htm

http://www.dirjournal.com/info/aband...-in-the-world/

thanks seary...particularly like the "graveaddiction" website.

[Patrick]

Even if the auto industry were to rebound, the plants would be re-tooled to use more automation and less humans

OR, more Mexican labor for $3.30 an hour. Something that Toyota and other "transplants" are starting to seriously look at since even manufacturing in the Sunbelt is becoming too costly.

[EastsideAl]

Yes, right now it is cheaper for the robber barons to exploit third world poverty than it is to automate. That will change as the cost of automation comes down, or the cost of increasingly less-poor Mexicans goes up. There certainly isn't going to be any big increase in well-paying production jobs around these parts again.

So, Meddle is precisely right, we're going to have to come up with a new economic model for this region, and we should have started in on this seriously back in the '70s or '80s. By that time it was already clear that dependence on the auto industry was going to be unsustainable over the long term. But nostalgic big dreams of a return to the "good ol' days," the occasional boom cycles of the boom-and-bust auto industry, years of divide-and-conquer corporate-favoring national and state government, and above all else a ton of political, social, and economic capital stupidly expended over and over again fighting one another over animosities that essentially come down to race, has too long held this area back from moving towards the future. It's really almost too late now, but we have to do something.

[Russix]

We need to start banging our heads against the wall as hard as we can until we can come up with something new that everyone else wants. We should be paying the relocation costs to move emerging high-tech industries into the city and then grant extremely generous incentives if products that come from these industries are only manufactured within the limits.

[Patrick]

At the same time, we cannot thrive on being a service and knowledge-only economy. So, how do we get around that when... one out of three working-age Michigan adults -- 1.7 million people -- lack the basic skills to get a family-sustaining job. It also shows that 44% of all Michigan's adults read below a sixth-grade level and that 60% of the students entering community colleges require remedial classes before they can start taking the postsecondary courses that lead to jobs

[eriedearie]

Didn't I hear talk about our factories being used to manufacture parts for wind turbines? How would we find out if this is something that is in the works for our area?

[lilpup]

At the same time, we cannot thrive on being a service and knowledge-only economy.

The US cannot sustain as a service and knowledge-only economy. Manufacturing must return to the US if the nation is to recover and thrive.

Even the Secretary of Commerce has now stated that our trade policies have hurt us and need to be corrected.

[Patrick]

Manufacturing must return to the US if the nation is to recover and thrive.

It will be a a more advanced type of manufacturing. It will not be the grunt work from 1965 where any nub with a 12th grade education could work. More training is involved...think of the Chrysler Dundee plant where everyone has to have a 2 year degree. Salaries will adjust and you will no longer see factory jobs of any kind earn anywhere near 6 figures even with overtime. That will be the biggest adjustment. For good or bad, companies care about profits first and everyone and everything else second.

[lilpup]

Two year degrees are nothing nowadays. Right now even advanced degree holders can't find employment in Michigan!

[Meddle]

More training is involved...think of the Chrysler Dundee plant where everyone has to have a 2 year degree.

And that is an incredibly HUGE mistake. Only a very few careers REQUIRE college; doctor, lawyer, engineer, accountant, scientist and a few others. Anything else can be handled by tech schools or the companies themselves.

[digitalvision]

It's not globalization that's taking the most manufacturing jobs. It's technology. In fact, the jobs bank was actually created because of technological changes, not globalization. The original idea was very smart - keep people mostly employed while they retrained to learn the new skills, then bring them back or find them new jobs. But like most plans, it went awry.

Both the unions and the management know that technology is the real killer of manufacturing jobs, but it's not politically convenient as you can't put a face on it. It's much easier in politics to succeed and whip folks into a frenzy if you have an enemy.

Let's be very honest. There is no hope for those 1.7 million people unless they get up to at least a real high school education. They are useless to the work force, unemployable and there are no jobs for them. Ever. No business wants them or can use them, outside the occasional domestic employment.

Also, I have learned at seminars that employers are now looking at which high school you went to, checking it's ranking, in conjunction with your college, as it's very obvious to the business community there is a large difference between districts and no longer are the Michigan state standards a good barometer of performance. If you're trying to get a gig without a degree, high school choice is becoming crucial, even for seasonal work between semesters.

Sure, is some of it perception? Yep. But that's how the world works.

Our leadership has failed us [[both sides of the aisle) by lying to people that these jobs are returning and not demanding the reforms needed in our education system & our communities [[a good education starts at home, after all). But people vote for what they want to hear.

I've had conversations with politicians; they know it. Most just can't admit it publicly, it's suicide. And the outside candidates [[Snyder, for instance) who do are going to get muzzled unless they can find some grassroots way around [[Obama was attempted to be kept down by his party establishment).

This is a natural, destructive cycle. You can look back [[I have as part of a research project) at the old newspapers and this SAME stuff has been talked about every couple generations, almost the same complaints verbatim.

You either decide to embrace it and do something about it for yourself and make the tough decisions to survive, or you don't. You either learn from the history or you are doomed to repeat it.

[lilpup]

Yes, technology has taken a lot of jobs but globalization is a major culprit, too. If we were even remotely self-sufficient in the consumer goods sold in the US market I could discount globalization a lot more, but when we don't even make our own clothing and electronics, especially electronics designed and developed here, it's another matter.

And I'll add - I think higher education will be the next bubble to burst after healthcare.

[Patrick]

And that is an incredibly HUGE mistake. Only a very few careers REQUIRE college; doctor, lawyer, engineer, accountant, scientist and a few others. Anything else can be handled by tech schools or the companies themselves

Most community colleges handle what trade schools handled in the past. You will need a two year degree in some form of industry...not some certificate. Companies today cannot handle the training aspect since it is simply too costly and takes too much time. They want readily available and trained workers. We need to start pushing kids into that direction rather than having them get soft degrees in liberal arts and communications.

[Jimaz]

Only a very few careers REQUIRE college; doctor, lawyer, engineer, accountant, scientist and a few others. Anything else can be handled by tech schools or the companies themselves.

I read somewhere that this was the approach that India used to break into the I.T. field so forcefully. They had little confidence in their educational system to handle such a large job so they had the employers tackle it with on-the-job training. The employers had the incentive to do it right because they stood to benefit from a well-trained workforce. It seems like the strategy worked well for them.

It's always seemed silly to me to have so many workers idled by an enormous economic problem yet not have a way to leverage their time into solving that same problem. Could they be directed toward searching for unexploited market niches? Of course there are people doing that all the time but I've never heard it explicitly suggested as a collaborative activity for the many unemployed.

Another recent article mentioned that a surprising percentage of Fortune 500 companies were started during recessions. The idea was that when people aren't paid to work, they tend to work on their passions instead. Often those passions drive them to invent products that launch successful businesses which, in turn, create employment for others.

Maybe that all goes without saying.

[turkeycall]

digitalvision quote: “Both the unions and the management know that technology is the real killer of manufacturing jobs.�

The unions and management both know that technology is not the real killer of jobs. The real killer of jobs is the failure to invest in technology.

Case in point: I began to serve my Machine Repair apprenticeship at the Budd Company in 1969. In the truck wheel manufacturing portion of the plant there were two rim lines. Each line required a jobsetter and five production operators. It wasn’t a union rule to have that many people on a line. That’s how many people it took to run the thing.

In the Chicago area Firestone had a wheel manufacturing facility which made the same wheel we did. Because they kept up with technology and invested in more automated equipment, they had rim lines which required only a jobsetter and one operator - and they installed a tire on the wheel besides. They sold their rims for much less than we could.

As technology gets more “technical� and innovation in machinery is advanced, the need for “button pushers� decreases but the need for technicians who are trained to maintain and repair the equipment increases. Naturally, the higher the skill level, the higher the hourly pay.

As illogical as it may seem to the outsider, the unions are always pushing for the companies to invest in the upgrade or retrofitting of older equipment and the purchase of “state of the art� manufacturing machinery and processes. The more efficient the equipment, the higher the productivity. The higher the productivity, the higher the wages. The higher the wages, the higher the standard of living. Higher wages means purchasing power - cars, trucks, durable goods like washers, dryers, and refrigerators - everything that comes from a solid manufacturing base. The investment pays for itself over time and the manufacturing facility stays in business.

lilpup quote: “technology has taken a lot of jobs but globalization is a major culprit.�
I see globalization as a symptom of a greater cause. I believe a large part of globalization is the result of our domestic manufacturing base refusing to invest in technological advances. It’s just much cheaper to ship the manufacturing jobs to Mexico, then Taiwan, then on to China.

Instead of the government rewarding manufacturers for shipping the jobs overseas, perhaps they ought to reward them for making the investments needed to increase efficiency and productivity on the domestic front, thereby maintaining our own standard of living.

[reddog289]

I worked at a print shop for over 13 yrs and in the spring of 2001, I was out looking for a job. The place I worked for did not keep up with the times. The only time that machines got replaced is when the parts were basically Indiana Jones finds.I myself relized that I would need to move to another print shop or career, cause that place would not last for long the rate it was going.Now 8 yrs later I was right Alot of the stuff we did can now be done by the customers themselves.
The same can be said with the screw machine shop I worked at for a month afterword. The place basically looked the same as it did when I was 7 yrs old when my Grandfather would take me there to pick up my Uncles. That place did upgrade more then the print shop, But when you make alot of parts for carburetors in a fuel injection world. Well you know how that goes.Three of my Uncles are in that group of 337,000 people who lost their jobs in Michigan in the last year.
The only good thing about that is that two of them can collect social security. The third is up in the air. This story can be repeated all over this state. I myself don't have the answers and if I did I wouldn't be wasting my time writing this.

[Meddle]

I worked for a Fed office in Detroit where one of the managers insisted on a two year degree to work in his office. All of his people were file clerks. All they really needed to know to do their job was the alphabet.