My father grew up in a farming community in Indiana, the youngest of 14 children. Many of his siblings were having children of their own by the time he was born. As one of the few children left at home, he experienced more in the way of privilege than those already gone, but he was, by no means, truly privileged. His parents, both of them, worked long hours in their family owned restaurant. Perhaps that is where he gleaned his work ethic from. He graduated at the top of his class from Tri-State University, enlisted in the Navy and served in the Vietnam War, and then settled down in Detroit with my mother. He worked for General Motors as a design engineer for 31 years, at which time he became an employee of Delphi, an affiliate of GM, in the same capacity. In 2001, he was forced to take a medical retirement after a stroke that left him with limited mobility on the right side of his body.
I remember taking factory tours as a child during special events for GM employees and their families. More than anything, though, I remember hearing my dad pour Grape Nuts into a bowl at almost exactly 4:10 a.m. every morning. Dad worked long hours and had hard days, but his job provided us with a house in a nice suburb and nearly everything we ever wanted or needed. In the years before he retired, I learned that my husband made more than $10,000 per year more than my father after 30 years on the job. As a retiree, his yearly income is less than half what it was with social security benefits as well as his retirement plan.
An overwhelming number of people look at the automotive industry in the United States as this bloated machine of inefficiency, throwing handfuls of money at fat Union rats. In truth, I would have to agree, in part. The union did extremely well for itself in negotiations, absolutely. Overtime pay and union-negotiated benefits were excessive, by some standards. However, unions were necessary and, arguably, still are. What I don't think people realize is the impact the auto industry has on Detroit's economy, as well as the national economy.
In September of 2008, the automotive and parts industries employed 732,800 workers directly around the country. The Big Three manufacturers employed 239,341 of those workers in the Detroit area and in greater Michigan. Approximately 33% of all workers in the industry, then, were employed in Michigan. Michigan's population as of 2007 was estimated at 10,071,822, which accounts for 3,785,661 households in Michigan, according to the U.S. Census Bureau. A stunning 6.3% of those households include employees of the Big Three automakers. It is not an unfair assumption to say that the primary income of those households is derived from the automotive industry.
Congress and the White House have been quick to judge the industry, but rarely speak about how the Big Three arrived at their current position. While it is true that there have been excesses in the industry, you cannot completely disregard the steady decline in profit margins the companies have experienced over the last decade. Auto prices have dropped consistently and incentives have increased in order to move cars off the lot. This downward pressure on pricing is a reflection of the actual economy. In the last nine years, costs of food, energy, and gas have risen to outrageous heights, driving the middle class' discretionary spending into the ground. In addition to rising prices, the average household's income has either fallen or remained stagnant, sacrificed to corporate cutbacks. Ed Wallace, an author for Business Week, offers up the Chevy Silverado Extended Cab truck with a V8 engine as a prime example of this downward pressure in pricing. The Silverado listed for over $27k and sold for $25k in 1995, but was recently offered for as little as $14k.
The media and government are also highly critical of the automakers for failing to produce "green" cars that use alternative fuel sources. I have yet to hear anyone propose a plan for funding the billions-of-dollars transition all of the plants would have to go through to change over current operations to greener production, though. With shrinking profit margins, how are these companies supposed to change over while maintaining their current commitments? The government is issuing deadlines and making demands, but what do the hundreds of thousands of people dependent on an income from the automakers do while their plants are overhauled? Are they supposed to join the 22% (which is almost three times the national average) of the population in Michigan that is already unemployed as of March of this year?
Allowing the Big Three to fail, all or in part, will have a devastating effect on the Michigan economy, which has already been rocked. Michigan felt the recession sharply more than two years ahead of the rest of the country, despite the lack of national media attention to our plight. It was almost as if the rest of the country believed that a "one state recession" was actually possible and was no indication of what was to come for them. The truth is, the Big Three's demise doesn't just effect the 6.3% of the state's population directly employed by the industry, but suppliers in several states, packaging plant employees, dealerships, and a string of people right on down to the waitress at the local diner.
It angers me to hear people speak so dismissively of the Big Three and, more generally, of the thousands of people in my state dependent on them for a livelihood. We're every bit as real as you are, with many of the same obligations, responsibilities, and needs.
We have homes, whose values we've watched plummet. My house, for instance, is worth less than half of what I purchased it for just five years ago. One in every 136 Michigan housing units has received a foreclosure filing. That accounts for 33,184 foreclosures in Michigan between January and March of this year.
We have children to feed, clothe, house, and educate. Several of the public schools in the Detroit area issued pleas recently for donations because they were out of toilet paper, hand soap, light bulbs, paper, and funding. One area school was literally doling out toilet paper by the sheet to students. As in, one sheet per student.
Two years ago, I was a waitress for a national family dining chain. I received approximately 18% of my weekly tips from employees at the local Ford plant. Try to imagine, for a moment, losing 18% of your income. Let's say you make the national average of $48,200 (data as of 2006) and were forced to take an 18% pay cut. That's a loss of $8,676. What would you have to sacrifice to make up for that loss? Cable? Vacations? A second car? For most servers, an 18% decrease is the difference between making rent and being evicted.
It's not just about cars and car companies. It's about hundreds of thousands of people.
What, America? Doesn't Michigan count?
Comments (9)
Every American person let the economy get too far. It's the fault of all of us, maybe some more than others, but we need to stop scapegoating and start fixing things.
Very informative. And yet emotional too.
Interesting take. You don't really hear too much of this (not surprising, though).
Thanks for this entry. When I heard of all the people getting laid off (I forget from where I heard it) I thought, the shit's gonna trickle down; but you do a much better job of writing it.
I hope you guys make it through over there! I don't keep up with my subs nowadays, but I was getting really worried about you. I feel kind of ineffectual over here, reading your entries but not being able to do anything about it...
@randaness - Detroit's had its share of being dumped on too, though. Subprime mortgages were a big deal here. We started losing homes at a disgusting rate long before the rest of the country. There are five vacant houses within sight of my front door, for instance. That wasn't all the fault of the people that lived there.
Don't get me wrong. I agree that the American people, as a whole, have been prone to excess (myself included!) and that WE collectively need to dig ourselves out. BUT... I also believe that there was a lot of fraud and criminal activity that helped individuals get here that has gone unpunished.
@windupherskirt - I just wish more people cared about what happened here. I know everyone has it rough these days, but you simply can't compare the impact the Big Three has on Michigan to any other state.
@TheDumberScott - When am I not an emotional goober? ;)
@gsmith03 - Nah. Instead, the world focused on text messages between Kwame Kilpatrick and his aide. Affairs are infinitely more interesting than the financial ruin of an entire state.
@kenwats - Eh, we're a tough bunch. I just wish more legislators could see it. Everyone's so fond of running the numbers, but I have yet to hear a good account of what it really means specifically to Detroit. We're the Motor City, for crying out loud. What do folks think that means? Bah!
I need to get over to your page, sir, and see what you've been up to, darn it. I whine alot, but I'm gonna be okay. No worries there. ;)
@Automaton_Emotion - I agree.
@Automaton_Emotion - Unfortunately, that seems to be what our country is coming to, on BOTH sides of the political fence.
Thank you for this entry. It is a heartfelt and honest opinion I've rarely gotten to hear.