View from Silicon Valley- The Fall of Flint * * * * *
We encourage you to directly visit this Detroit News article:
We didn't start this web site just to parrot other people's ideas. Forgive
me for merely forwarding somebody else's work, but this hits so close to home for me that it seems appropriate. (Hats
off to Mike Shedlock on whose site I found this article December 11.)
Long(!)-time readers may recall one of our earliest missives compared Silicon Valley to the Rust Belt. It's time to confess. The un-named midwest city in this article was Flint,
Michigan.
Much less famously than Michael Moore, I grew up in Flint. Unlike Mr. Moore, I attended the public
schools where one could get the "complete experience."
When I lived there, Flint had nearly 200,000 residents but it was not remotely the hot-bed of high wages described in the article as
though it was part of Flint's recent history. When I graduated high school, once the marijuana smoke cleared from
the hallways it was clear a career in or related to GM was not the way to go. Staying in Flint was accepting a dependence
on the auto industry of which I wanted no part. (Since I grew up around cars, I figured the less I knew about them the
better chance I had of never having to work on them for a living. When a computer chip or a PC breaks down, you throw
it away and buy a new one.)
Moving on: We would like to hear from some of these
economists and journalists who constantly proclaim the long-term sustainability of off-shoring US jobs. It's one level
of insult to blithely tell a degreed IT professional to switch to Biotech. It's quite another to
give such advice to a laid-off UAW worker.
Without condoning the worker's various decisions to "depend" on GM,
or buy houses while lay-offs are being planned, we all have to ask what industry-of-the-future do these
people go to work in next? On a related note, how does Flint support their growing share of jobs going to government
and education without the taxes from these lost wages?
If the world is indeed flat, what do we do with these people who fall off the edges?
Do they really believe losing these jobs won't drag other jobs down with them?
Without further ado:
The fall of Flint(*) As former automotive mecca hits hard times, so do the workers who depended on its success
Bill Vlasic
and Brett Clanton / The Detroit News, December 11, 2005
FLINT -- Thirty years ago, it was the home of 14,000 workers,
a sprawling complex of factories that churned out millions of auto parts a day for General Motors Corp.
But the once-mighty
Flint East plant is now a shell of its former self, and a leading candidate for closure in the restructuring of GM's bankrupt
spinoff, Delphi Corp.
Its likely demise speaks volumes about GM's mistakes, the globalization of auto parts manufacturing
and the tortured relationship between the world's biggest automaker and the United Auto Workers.
Now down to 2,800
workers, Flint East is a dinosaur in the rapidly changing auto industry, a source of spark plugs and air filters made cheaper
in the low-wage economies of China, India and Mexico.
And there are more staggering hits to come in Flint, the birthplace
of GM and the site of the UAW's fabled sit-down strikes of 1937. GM's latest downsizing will cost Flint an engine plant and
another 800 jobs on top of the Delphi losses.
What does it mean for a city that produced millions of GM vehicles and
countless parts over the years and created a middle class that was the envy of industrial communities across America?
"This
is something that has been going on since the 1970s," said Northeastern University sociology professor Barry Bluestone, whose
father once headed the UAW's GM division. "This is just kind of the final death rattle."
Flint East workers recall
the days when they headed to the job a half-hour early just to find a spot in the parking lots along Robert T. Longway Boulevard.
Today, the street is a road to nowhere, a barren stretch of concrete that grimly illustrates how far Flint has fallen.
"The
town is in bad shape now," said Dennis Delling, an electrician with 29 years seniority. "We've lost it all. It's already devastated."
In
the early 1980s, GM employed nearly 80,000 men and women in Flint. But as GM's U.S. market share steadily declined, Flint
lost jobs, culminating with the 1999 shutdown of the massive Buick City assembly plant.
Now Flint is on the firing
line in the bankruptcy of Delphi. An internal planning document dubbed "Northstar" -- obtained by The Detroit News -- cites
Flint East among five U.S. plants to be closed in Delphi's electronics and safety division.
Delphi spokesman David
Bodkin said the company has made no final decision on the Flint plant's fate. "We're continuing to look at all the (factory)
sites," he said.
But it's become apparent that many components made for decades by Delphi, a part of GM until its spinoff
six years ago, are no longer competitive with products made in Asia and Latin America.
No demand for parts Where
Flint East once made 1.2 million spark plugs a day, the plant now turns out one-tenth of that volume. And GM has already told
labor leaders at the plant that the company will cease orders for any of its spark plugs by next year.
Delphi Chairman
Robert S. "Steve" Miller is characteristically blunt about the need to eliminate the spark plug operations.
"We can't
make any more spark plugs," Miller said in a recent interview. "You can put 1,000 of them in a box and ship them out of China.
Parts like that are going to be made in low-wage countries, and there's nothing we can do about it."
Such comments
rile workers in Flint, who say Delphi has been starving Flint East and other U.S. plants of investment and new contracts for
years, refusing to let them show how competitive they could be if given the chance.
"It's not that we can't build good
products at a competitive price," said Art Reyes, vice president of UAW Local 651, which represents workers at Flint East.
"It's that we're not allowed to."
The decline of the Flint East complex, some sections of which are 100 years old,
has happened one building at a time for years -- a slow process that mirrors the gutting of Flint's automotive economy.
But
the most troubling sign came in 2002, when Delphi put Flint East into a "holding group" of underperforming plants and then
targeted the facilities for sale or closure. Since then, workers have lived with rumors that the announcement they've all
been dreading is just around the corner.
"You live your life not making plans," said Judy Minier, 49, an hourly worker
at Flint East. "You begin to think they're crying wolf just to keep you on edge all of the time."
The anxiety level
in Flint has boiled over in recent weeks as the city awaits Delphi's next move in bankruptcy court.
The Troy-based
auto supplier is seeking to close most of its U.S. plants and cut hourly wages more than 60 percent as part of its reorganization.
Sobering
effects widespread Even if the Flint East complex is somehow spared, lower wages would mean less money pumping
through an already poor city and a sharp decline in the standard of living for hundreds of auto workers. Under Delphi's latest
wage proposal, factory workers would earn around $12 per hour, down from the current average of $27 per hour.
If the
UAW and other unions do not agree to wage cuts by a Jan. 20 deadline, Miller has said he will ask the court to reject its
labor contracts -- a move that could prompt a strike at Delphi.
To show their unity in the face of such brutal demands,
workers at Flint East and other plants staged informational pickets last month. On Saturday, UAW leaders had planned to lead
a candlelight vigil in Flint to rally support for workers under the gun of Delphi's restructuring.
And in a communitywide
effort, union leaders have collected more than 60,000 signatures on a petition that pleads with U.S. Bankruptcy Court Judge
Robert Drain to take mercy on their bruised city and keep their Delphi plant from closing.
"This is an absolute travesty
what (Delphi is) trying to do," Bob Roth, director of UAW Region 1C, which oversees the Flint area, said at a Dec. 2 news
conference to announce the petitions. "We're talking about 3,000 lives. Not jobs -- lives."
Putting a face
on loss The day before the press briefing, Miller paid a surprise visit to Flint East.
Instead of his usual
suit and tie, Miller wore a pullover sweater and -- in a detail that didn't go unnoticed by union officials at the plant --
a blue-collar shirt. He walked the floor, taking stock of the aging facility and stopping to talk with random workers.
At
one point, he arrived at the station of Rebecca Oelfke, a 32-year-old quality inspector on a line that makes fuel-level monitors
for Hummer SUVs and Chevy Silverado trucks.
Oelfke has been at the plant for only five years, but in that short time
the job has become essential to her family. With her Delphi pay and benefits, Oelfke supports a husband stricken with multiple
sclerosis and two young boys. Last year, she bought what she calls her "dream house" in a comfortable subdivision where streets
are named for famous Detroit cars such as Thunderbird, Skylark and Corvette.
Although Oelfke has a college degree in
education, a teaching job can't cover her bills. She let Miller know in no uncertain terms what closing the plant or decimating
her paycheck and benefits would mean.
"I told him this job is my livelihood," she said. "I wanted him to know the people
he's affecting."
Miller said he was doing what he could to save the plant. But UAW leaders say he is spreading false
hope at a time when he is planning to dismantle Delphi's unionized operations.
"He's bull-----ing people," said UAW
Vice President Richard Shoemaker.
That's not easy in Flint, which has borne the brunt of GM's downsizing. Parts of
the city are eerily empty, with vast stretches of vacant land standing in silent testimony to the factories that were once
there.
To many residents, Flint East represents the last stand for the self-proclaimed "Vehicle City."
"The
biggest concern for people who don't work at the plant is the slow trickle-down effect that's going to hit this whole area,"
said Christine Davidson, a bartender at Jammins Sports Bar. "I've already noticed more penny-pinching."
The steady
exodus of auto jobs has cut Flint's population nearly in half from its high point of about 200,000 in 1950. More than 20,000
manufacturing jobs have been lost in the past decade alone, according to U.S. labor statistics.
And although Flint
boasted one of the highest per-capita incomes in the United States in the 1950s, nearly a quarter of its population is now
living under the poverty line.
Situation demands changes The stark decline is impossible to ignore,
even for GM Chairman Rick Wagoner.
"If you look back (to) when Flint has the highest incomes per capita of any city
in the country if nothing else you say, 'Wow, that's a lesson for us,' " Wagoner told the News. "If you do not adapt,
man, the cost is high."
But did Flint East fail to adapt, or were the forces of change in the auto industry too powerful
to overcome? Not only have many of its parts been outsourced overseas, but the GM vehicles that use those parts also aren't
selling.
"What makes it so poignant is it isn't as though the auto industry in America is in decline," said Bluestone,
the sociology professor. "It's actually quite vibrant if you're Toyota, Honda, BMW or Mercedes, but not if you're GM or Ford."
Mark
Perry, an economics professor at the University of Michigan-Flint, said that while job losses in the auto industry have hit
Flint hard, the city is showing small signs of recovery. At the end of October, Flint's jobless rate was 6 percent -- the
lowest in four years -- and the city is making progress in diversifying its economy beyond autos.
"There could be some
long-term positive implications for that trend," he said. But he acknowledged that another factory closing on the scale of
Flint East would be a major blow to the area.
UAW officials at Flint East could see the handwriting on the wall when
GM informed them it would quit buying the plant's spark plugs next year.
"It costs us $2.05 to make a spark plug, and
we've been selling them to GM for $1.70," said Russ Reynolds, president of UAW Local 651. "But they can make them in India
and Japan and China for $1.05, and we just can't compete with that."
Reyes said that the plant's management and union
local went as far as to offer GM spark plugs for free for its new vehicles, just so Flint East could continue to supply the
automaker in the aftermarket.
"They turned it down," Reyes said. "They're just killing us."
The bottom line
is just as painful for Flint East's other products, such as instrument clusters, air meters and filtration systems. According
to Delphi's Northstar plan, the company wants to dump those businesses -- identified as "losers" -- entirely.
Delphi
made a similar determination in 2004 when it shuttered its Flint West generator plant and consolidated it with Flint East.
The UAW allowed the move under the condition that employment levels at Flint East be maintained at 3,000 workers.
Resignation
to fate spreads But because the plant's parts can't be made cheaper than similar parts made abroad, workers increasingly
believe no amount of labor concessions will save Flint East from the automotive graveyard -- regardless of the deal that was
in place to keep jobs at the plant.
"This is devastating people's lives," said former UAW President Douglas Fraser.
"This is not a layoff. It's the end of a life. There is a feeling of abandonment."
And with the feeling of abandonment
comes a wellspring of anger directed at Miller and GM's leadership. That rage could lead to strategic strikes at Delphi that
would not only cripple GM's vehicle production, but also affect other automotive customers.
"We're going to go down
fighting," vowed Roth, the regional UAW leader.
A similar sentiment can be heard in conversations across the city,
as workers and residents frame the Delphi struggle as a fight not just for jobs, but for the future of the American middle
class.
At the Dec. 2 news conference announcing the petition, union leaders appeared at a podium under banners that
read "Jobs, Jobs, Jobs" and "America First."
"We need to take our country back," said Local 651's Reynolds, choking
back tears. "We need to take our government back. If we wait until tomorrow, it may be too late."
Another union official
recalled his military service, demanding the same loyalty from the U.S. government in saving the domestic auto industry from
ruin.
But while many union leaders and workers are eager to take on Miller and Delphi, others are tired of fighting
a battle they know they can't win.
"There are a lot of people who are just done talking about it," said Davidson, the
bartender at Jammins, which sits across the street from Flint East. "Talking about it only causes more depression and anger.
"I
think people are giving up," she said. "That's the attitude now."
Dennis Shufelt tries to be sensitive to that sentiment
when he goes into town these days.
The 58-year-old former production worker retired from Flint East in January 2004
after 32 years with GM and Delphi. Shufelt said he's adopted a simple greeting when he bumps into guys from the plant: "How
you holding up?"
While Shufelt retired at the right time, he still feels as if he's part of the struggle. And he grimaces
at the thought of being betrayed by corporate decision-makers he believes are turning their backs on his city.
"They
ain't American," he said, leaning forward in a recliner in his living room. "They're a global corporation now with no loyalty
to anybody."
Then he shook his head and chuckled sarcastically. "And we treat them," he said, "like they're our own."
*
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