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Friday, December 12, 2008

Michigone?

This is written on Friday: Blacker than Black Friday in Michigan, after the U.S. Senate failed to muster enough votes to approve a $14-billion bridge loan to the reeling Big Three American automakers. People in that cold North Central state are dejected, frightened, and angry. But unlike the fictional TV anchorman Howard Beale, who famously sputtered that he was “mad as hell and not going to take it any more” in the 1976 movie “Network,” Michigan autoworkers and executives expect they’ll be “taking it” – on the chin and in their pay envelopes – for a long time to come.

Car spindle
This is how the U.S. auto industry is feeling about now. Wait! What’s that German car doing at the top?
When people here in Washington – or in Denver or Des Moines, or a small town in the Dakotas for that matter – have a bad day, we’re prone to saying, “Hey, could be worse. We could be in Detroit!”

But what could be worse if you live and work – or worked – there now that unemployment in “the Motor City” is north of 18 percent and about to spill past 10 percent throughout Michigan?

Journalists and politicians speak of “Detroit,” meaning not just our beleaguered “automobile capital” but the entire embattled U.S. auto industry, whose influence reaches well beyond Michigan.

Christmas car dealership
There’s not a lot of ho-ho-ho on the lots of car dealers this Christmas
One in ten jobs nationally – one in three in Michigan – is tied to the auto industry. When Virg Bernaro, mayor of Lansing, the state capital, recently led a delegation of 35 mayors and other elected officials on a trip to Washington to support an industry rescue plan, its members represented towns from coast to coast that depend not just on assembly plants or huge dealerships, but also on “Tier One” and “Tier Two” suppliers.

Tier One companies make parts and trim for Chryslers, General Motors brands, and Fords, down to the ashtrays and buttons on the radio. Tier Two companies, in turn, supply them. In a warped variation of “trickle-down economics” not stressed in business school, when an automaker founders or bites the dust, unpaid bills, job losses, and closures spread quickly to the little companies that feed off it.

That doesn’t count the thousands of people whose livelihoods depend on selling and repairing American cars. Or the owners of the deli on the corner that sells most of its sandwiches to those who work at the plant or dealer. Or the dentist who built a practice from the same clientele – and so on, on down the block.

Dark Days

Farmer
Congress and the White House are having about as much luck as this farmer, pulling the auto industry out of the mud
So, “rescue package” for the embattled automakers or no rescue package, times are grim in Michigan, where people know that when they bundle up and fetch the newspaper from the snow, the news they carry in will not be good.

On top of all these dark developments, Michiganders, like almost all Americans, have also been buffeted by bad news from their stockbrokers and mortgage lenders. But not every town or every person in Michigan is despairing. Most folks in western Michigan -- around Grand Rapids, where the health-care and furniture businesses retain some vigor; and up north, around Travers City, where resorts and vacation properties and ordinary homes are still being built -- don’t greet the day with dread, as do a lot of people in “car country” to their south and east.

Henry Ford's plant in Ypsilanti, Michigan, hired thousands of former migrants during World War II, when the plant was converted from auto to bomber production. Ford had hired many southern African-Americans but switched to hiring whites after black workers joined the union
An irony is that Michigan was once a place that people by the hundreds of thousands hurried to move to, not get away from. During the Great Migration of the early 1900s, an estimated 7 million African-Americans, plus uncounted rural whites, poured into Michigan and other rapidly industrializing northern states. These places dangled good, steady jobs with benefits – a far cry from unrelenting, poorly rewarded toil under the hot sun in the fields and piney woods down South.

Good but not glamorous jobs in the auto factories turned Michigan into a “cash and carry” state: workers brought home a decent paycheck, paid their bills, put their kids through school, and splurged on only one or two modest pleasures, say a cabin at the lake or a nice driving vacation out west each year.

They were frugal, but there wasn’t much left over to save. Besides, why bother? Social Security and a good Ford pension would see you through your retirement years. And the parish church wouldn’t charge much to bury you.

The auto companies and the United Auto Workers are on the same side of the table when it comes to seeking help from Washington
Rampant entrepreneurship did not develop in Michigan to the degree that it did in bustling California or Texas and elsewhere, for the same reason. People put their trust in the long-term stability of the union and a good company job. Higher education was something for the kids: You don’t need a degree to solder joints on the line.


Rock Solid

We admire these “salt of the earth” people who are some of our last countrymen, or so it seems, who still actually “make stuff” with their hands and backs. They don’t deliver things or trade things or sell can’t-miss paper schemes. They go to work each day and make stuff. If we lose the auto companies and these automakers, we wonder and worry what America will make any more.

If the answer is not much, what does that portend?

Chevy Suburban
This extra-long Chevy Suburban sport-utility vehicle, and millions like it, played a role in the Big Three’s “fat years” and now, in in its lean ones
“Michigan is the nation’s economic story writ large,” Detroit Free Press business reporter John Gallagher wrote in October. “The state gave birth to the American middle class in the early years of the 20th Century, as rising productivity in the new auto industry boosted incomes for millions of working families.” The state routinely led the nation in per-capita income in the 1950s and ’60s, and just a decade ago. And just a decade ago, the Big Three could hardly count their money fast enough, as Americans drove off happy in the latest gas-guzzling minivans and sport-utility vehicles: Detroit’s metal mastodons.

` With 15-percent profit margins on SUVs, what was not to like about life in the Wolverine State?

An Unsettling Precedent

Timber
Timber was once to Michigan’s economy what the auto industry is now. The car folks hope their next chapter does not resemble the loggers’ last one
But a faint warning can be heard from a century past, when Michigan’s lumber industry fell from boom to bust in a flash. In the North Woods throughout the early 20th Century, roving crews of lumberjacks made short work of millions of pines, some 200 years old. They turned logs into boards that built millions of homes for many states around. It was not long before all that remained were sawdust and ghost towns throughout the North Woods.

No one, not even the auto industry’s naysayers, is saying that tumbleweeds will whistle down the streets of Flint and Detroit any time soon. But whole slum neighborhoods in some parts of the latter already resemble what one Michigander described as “Dresden after the bombings” – a reference to the German city destroyed by Allied air attacks during World War II. (It doesn’t help that already-frayed tensions in a city where racial unrest has simmered for decades and occasionally ignited that 95 percent of Detroit City is African-American and mostly poor, and – until recently, when upwardly mobile blacks earned enough to get out – 97 percent of the surrounding suburban population was white.

Ford
There are dark clouds over Ford, all right. Even darker ones over GM and Chrysler, which have fewer funds in reserve to weather a storm
With the national nonfarm unemployment rate creeping upward – from 6.5 to 6.7 percent in November alone – Michigan’s rate, as I mentioned, is bumping up against 10 percent. In some of those “Dresden” neighborhoods in Detroit, the figure is estimated to exceed 40 percent.

So the already downcast people of Michigan are a little fearful, too, about what the volatile combination of despair and widening unemployment could bring.

Slumped Shoulders, Eyes Averted

“You know how you pass someone you know on the street and say, ‘How ya doin?’” Ronald Dzwonkowski asked me. He directs the editorial board at the Free Press.

“We don’t do that here anymore. We don’t want to hear the answer.”

Spirit of Detroit
This statue on Woodward Avenue in the Motor City has no official name, but locals call it “The Spirit of Detroit.” Right now, spirits are low there
It’s bad enough that the auto industry teeters, but the Detroit Lions pro football team has assembled an abject 0-13 record as of this writing, the Tigers baseball team – picked to waltz to the American League pennant – finished last in its five-team division, and the once-mighty University of Michigan football team, which had played in 33 straight post-season “bowl” games, will compete in none this year after a 3-9 season that ended with a stomping by Ohio State, its archrival to the south. These are not trivial matters in a blue-collar state where sports are a useful distraction, especially now.

Did I mention that the state of Michigan just announced that it will cut its budget by $200 million? That’s hardly surprising. Many other states that rely on sales tax revenues have done likewise as Americans zip up their wallets in response to the ongoing recession. But the loss of good government jobs on top of hemorrhages in the auto industry is a crippling body blow.

OK
Things are anything but OK right now in Michigan and in the homes of autoworkers
“The whole American dream, that’s a snow job,” the wife of a Michigan electrician told the Free Press in October. The paper found her and her husband several states away, living in a tent city in Iowa because they had lost their home and could not find work in Michigan. Reporter Gallagher closed his story with a reference to the itinerant camps of the Great Depression, quoting the electrician’s wife’s rueful suggestion that the late songwriter Woody Guthrie, who put the sorrows of the Depression into song, “should come back to write an anthem for today’s struggling families.

“These are historical times, I’m afraid,” she continued. Not grand ones, either, by a long shot. “Everyone knows someone who has been laid off,” John Gallagher told me. “We had nine people to dinner the other night. Three had lost their jobs.” Mirthful banter was at a minimum. Instead, he says: “Lots of gallows humor.”

Help for Fat Cats

Imports
There will be plenty of imports to eat if one or more of the Big Three goes under
What really “grinds” Michiganders, says Ron Dzwonkowski, Gallagher’s Free Press colleague, is the cheery willingness of the government in Washington to shovel $700 billion to Wall Street, big banks, and mortgage and insurance giants. It did not go unnoticed in Lansing and Monroe and Port Huron that President Bush twice made televised appeals for a Wall Street bailout. Nor does it escape notice in Michigan that those wagging a disapproving finger at the idea of a “Big Three” rescue plan one-fiftieth the came right out and said that if one or two of the Big Three automakers went bankrupt or folded, that was their tough luck. It served them right for getting into trouble in the first place. A “leaner” auto industry might be better for the country.

“For God’s sake,” one man in Michigan muttered to me. “This was a bridge loan, a lifeline, to be paid back, not a bailout.” A loan complete with a “car czar” to scrutinize the industry’s every move. On the way to work, I heard a Detroit autoworker tearfully react to the notion that it was they, the unionized labor force, that fouled the deal by refusing to accept deep wage cuts. “I can’t afford a pay cut,” she said. “I’ll lose everything.” She may anyway if there’s no paycheck at all.

There was no “stock czar” or “bank czar” on the case when financial houses gobbled from the federal trough, another worker complained, bitterly. “They used a lot of that money not to get loans going again to the little guy, but to prop up their own portfolios and buy more banks.”

And here’s something else that grinds Michiganders: It’s not as if they are making manual typewriters or rotary-dial telephones for which there clearly is no use any more. The Big Three still make half of the eight million new vehicles that sell each year in the United States. Or I should say, sold, before worried Americans began bypassing even the foreign makers’ dealerships. Ford still produces the best-selling small truck, and it and General Motors still bring in $200 billion a year or so apiece. (The figures at Chrysler, which is privately owned, are not public, but they are estimated at half of Ford or GM’s figures.)

A Few Regrets

Yes, our own companies’ greed trumped need as they kept rolling out the SUVs, the people of Michigan admit. Yes, we should have joined the “green revolution” far earlier, with smaller, more efficient products. But do we deserve to be beaten like the proverbial “red-headed stepchild”? Do those in power hate us, or our unions, so much that they’ll allow a century-old industrial giant of an industry to crumple and die?

Vacant motel
There’s a vacancy at this motel, and many vacancies to come, perhaps, on the assembly lines of Michigan’s automakers
Like some other Americans, the people of Michigan see home after home going up for sale or foreclosed and abandoned. “Vacant homes and vacant feelings is what we have here,” Dr. Steven Craig, a psychologist practicing in the Detroit suburb of Birmingham, told me. He says a friend and neighbor, like many in Michigan, packed up and headed somewhere south where firms are hiring. The neighbor left behind what had been a lovely home that is now overgrown with weeds and vines. “It looks like the Munsters’ place,” Dr. Craig says. They were a creepy, but funny, family of monster-film stereotypes who lived in a mansion that had gone to rack and ruin.

So many Michiganders are heading to relatively prosperous Texas that a joke describing them is making the rounds:

“What’s the last thing that a Texan wants to see?”

“A Yankee with a U-Haul.”

There’s irony in that, because 20 years ago or so, the stampede of rented U-haul trailers carrying families’ every possession, was heading in the other direction, out of Houston. But by 2003, according to a report by the Federal Reserve Bank of Dallas, “U-Haul trailers leaving Michigan for Texas exceeded those making the return trip by a ratio of 100 to 1.”

The “black-tag people” were back. (For years, Michigan license plates were black, and the watch was out for them in Texas.)

See You Later

This is not yet a Great Migration in reverse, but it has the makings of one, especially among the young. Already, Michigan’s newspapers are bemoaning a “brain drain” of young people who are leaving, likely never to return. They simply can’t find work in Michigan, or don’t want to, given the gloom.

American cars
Those were the days. New American car. Happy carmaker (here called an “autobuilder”). Satisfied customer
Older folks are hunkering down and, by and large, staying. Their roots sometimes stretch through three generations of auto workers. It’s the work and the lifestyle they know. They can’t come to grips with starting over, even in some sunny and upbeat spot. Comforting support systems are nearby in the factory towns: family, friends, church, union, dog park, corner tavern, bowling team. It’s one thing to contemplate a whole new start, and quite another to do it, given humans’ resistance to change.

So on the outside, people are “bucking up” as best they can – whistling past the graveyard, in the view of others who foresee decline and death for the auto industry ahead.

Inside, people are not doing so well. In many homes, dejection has turned to quiet desperation and feelings of failure, even though it wasn’t the rank and file that flew corporate jets to Washington to beg for handouts.

Dr. Craig says his patients “look to me for a lifeline, as a drowning man cries out for a lifeguard.” But if the nation’s greatest economists do not have answers, could Steven Craig have any?

Mad as Hell Inside

Mental health professionals like him describe a growing, generalized anger. “We played by the rules and did all that was asked of us,” their patients tell them, in return for what they hoped was a sliver of the good life: a sturdy little home, a ballgame or two, that place at the lake.

Once, too, families in trouble could lean on their elderly parents for emotional support and, if need be, a roof and a bed for a time. Now Mom and Dad are despairing, too, because of the Wall Street collapse that sucked the life out of their pension funds. The old folks, too, are asking, “What about us?”

Assembly line
An image of days to come? An abandoned assembly line after a plant closing. This one was in Illinois and made tractors. But...
There are danger signs ahead. Fearful Michiganders are putting off medical appointments, slashing their church and charitable donations, turning inward, avoiding friends lest they ask Ronald Dzwonkowski’s question: “How ya doin’?” Even small talk is to be avoided, since it is sure to touch on the weather (lousy again), the job (gone or imperiled), a vacation or home improvement (canceled), or the kids (likely stressed and depressed, too).

Down in Ohio, in my hometown of Cleveland, which has been buffeted by its own waves of steel plant closings over the years, Case Western Reserve University's Mark Chupp, a professor of social work, knows the drill. “Probably the worst long-term effect of economic downturn and hardship in a Rust Belt city is cynicism about the good life,” he says. “People are pessimistic and have been lowering expectations of the good life for a long time.

Ford
Unrelenting stress has no upside
“Sadly, what comes with this is the ‘couch potato’ lifestyle. We have one of the highest obesity rates in the country. People are ‘vegging out’ in front of the TV.” And he doesn’t mean eating vegetables. He means passing the hours mindlessly, eating poorly and, likely, slowly killing themselves with drink as well.

Collateral Damage

Back in Michigan, there don’t appear to be hard figures on the suicide, drunk-driving, domestic abuse, and divorce rates these days, but the sense from those with whom I’ve talked is that they are higher. Perennial stress, as a whole state contemplates the loss of a way of life, is a killer –of the depressed and of others.

And yet there a gritty reserve of hope remaining in Michigan. As Dr. Craig explains it, the economic fortunes of the auto industry have been cyclical. And in the past, the tough-it-out, weather-the-storm, this-too-shall-pass resolve has prevailed.

I talked with a woman in the little town (800 people) of Lyons, Michigan, which is now a bedroom community outside Lansing. Not only are four out of five people in Lyons still tied to auto-industry work in Lansing or Grand Rapids or elsewhere, but the old timers in town know what it’s like to have the economic rug pulled out from under their lives. Lyons once had an auto plant that produced interior trim for Chryslers. It closed tight in the 1970s during a corporate reorganization.

“I grew up on a farm. Life was hard, but we always made it through,” the woman told me. “My parents and their generation made it through the Depression. With faith, we’ll weather this, too.”

Faith in the Lord, she meant, not in Detroit or Washington.

Rome wasn’t built in a day, and neither was the great automobile industry, others in Michigan tell me. So the fix for the auto industry will take a while, too.

If there is a fix.

Here’s what Dr. Craig tells his patients: “Do something. Take control of something, even a little thing like definitely deciding to send the kids to summer camp next year, or definitely deciding not to.” Dithering, indecision, hoping for better days, he says, are recipes for deepening disillusionment – and physical dissolution.

Storm Clouds Brewing

Obama
Then-candidate Barack Obama was all smiles at a Chrysler plant in Sterling Heights, Michigan, in May. He’ll have more serious work with the industry come January
What lies ahead for Michigan? A grim winter, for sure, and a long one. No bridge loan can fix that. And according to many forecasts, no matter how much money gets funneled to the auto industry once the new Obama administration takes office January 20, more cutbacks and layoffs seem as certain as the sunrise.

Long-term, the people with whom I talked envision a less-populated but more economically diverse state. Ron Dzwonkowski thinks Michigan’s future should be hinged to its abundant natural resources as a source of energy, enjoyable retirement, and recreation. Michigan has more fresh water, and not just from the three Great Lakes that touch it, than any other U.S. state, including neighboring Minnesota, the “Land of 10,000 Lakes.” Michigan may not have 10,000, but it has so many that everybody in the state lives within 75 kilometers of a good-sized one.

The lakes aren’t going anywhere. But, especially if one or more of the auto giants collapses, some of the people who own cottages on them could be.

TODAY'S WILD WORDS

(These are a few of the words from this posting that you may not know. Each time, I'll tell you a little about them and also place them into a cumulative archive of "Ted's Wild Words" in the right-hand column of the home page. Just click on it there, and if there's another word in today's blog that you'd like me to explain, just ask!)

Disillusionment and dissolution. The former means disenchantment. Even idealists can get disillusioned during hard times. The latter means decay or disintegration. Disillusionment can foster psychological and physical breakdowns.

Rack and Ruin. Utter decay. “Rack” is a variation of “wreck” or “wrack.” This is another phrase that always appears in this order. One doesn’t, for some reason, go to ruin and rack.

Red-headed stepchild. This wretch is always being severely beaten in a popular phrase. Stepchildren often get short-shrift when there are natural siblings around. Read the “Cinderella” story. As for why redheads get a double dose of trouble is not clear, except that they, too, are not as common in most families as are blonds and brunettes. No one is sure who first called attention to the plight of red-haired stepkids.

Wolverine. A foul-tempered, musky-smelling, burrowing weasel after which both Michigan and its largest public university’s sports teams decided to nickname themselves. Wolverines don’t back down from a fight – a welcome trait in the state’s current economic morass.

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3 comments:

guest said...

"A foul-tempered, musky-smelling, burrowing weasel "

That reminds me of swearings I read in Richard Adams's Watership Down.

Patrick said...

from SLC,UT..sad subject,great writing,thought provoking but most definitely worrying.,first time reader and muchly appreciative..
Thnx Pat

Cap'nLouie said...

Dresden? For an international type journalist, you have gone beyond the pale to believe anyone who would make this statement. He or she obviously
has never been to Dresden. Thanks for this piece, it's and all of its encouragement. Can't imagine anyone in the international community understanding anything about its slur on America. Get out and do something bright.
Chevorlet