Friday 28 November 2008
by: Bob Herbert, The New York Times
Former restaurant worker and Detroit resident Richard Thomas, who depends on odd jobs for a living, is hoping hard for a bailout. Many workers who aren't directly connected with the auto industry would still be devastated by its downfall. (Carlos Osorio / AP)
If we were interested in making the best possible decisions with regard to the U.S. auto industry, someone like Rich Breen would be seen as the face of the industry, not the chief executives of General Motors, Ford and Chrysler.
Mr. Breen is a 55-year-old member of the Teamsters union, a car hauler who delivers new vehicles for the Big Three automakers. He lives in Clinton Township, a suburb of Detroit, and he is horrified by the steady erosion of the American standard of living that he sees each day as he makes his rounds.
"I see the tool and die industry dying in the light industrial areas," he told me in an interview just before Thanksgiving. "I see the clientele decreasing in the local barbershops, the hardware stores and the restaurants. That's all happening from the first phase of the downsizing in the auto industry, the cutbacks and layoffs that have already occurred. It's not from the current crisis.
"The community around me is deteriorating before my eyes. I hear people saying if G.M., Ford or Chrysler shuts down it wouldn't affect them. They have no idea. It would have a domino effect that we've never had before in the United States.
"The bottom would fall out and the ripple effects would go all over the country."
The bottom is already falling out. The question for Congress and the incoming Obama administration is whether to risk allowing the industry to collapse completely. The number of people working for the Big Three automakers has already been cut drastically, perhaps in half since 2000, and more cuts are to come, even with a government rescue effort.
The United Automobile Workers agreed to extraordinary contract concessions in negotiations that took place in 2005 and 2007. Not only will there be no raises for the four-year life of the most recent contract, but the starting pay for new hires at the Big Three has been cut by 50 percent - to $14 to $16 an hour. Benefits have also been slashed.
"Ripple effect" is too mild a term for the impact that a bankruptcy among the Big Three would have on other manufacturers, suppliers, dealers, insurance companies and thousands of businesses that at first glance would not seem to be related to the auto industry. The industry supports, in one way or another, one in every 10 jobs in the nation.
A bankruptcy would be like a hurricane blowing through the U.S. economy.
Those winds are already taking a fierce toll. Darin Gilley is a 45-year-old father of two young girls who lives in Pacific, Mo., about 30 miles southwest of St. Louis. He worked in a plant that made seats for Chrysler vehicles until he was laid off at the end of October. He's also president of a U.A.W. local that represents employees in a plant that makes dashboards for Chrysler.
Both plants are closing.
"You can't let this industry go down," Mr. Gilley said. "It would be catastrophic. I'll tell you an interesting fact: auto parts supply is the number one industrial employer in seven states, including Missouri. And it's a top five employer in 12 other states."
The auto industry is embedded in the very heart and soul of the United States, a nation in which people travel by car with the natural ease of birds flying. Think of service stations, body shops, tire distributorships, car washes....
Some analysts have suggested that even if the Big Three were to disappear, the foreign carmakers would fill the vacuum, as if the cornerstone of American manufacturing - and everything it has meant and still could mean to American life and culture - were somehow disposable, like a worn-out paper bag.
Get real.
Mr. Gilley mentioned a number of close friends and associates who have already succumbed to the crisis. "This one fellow and his wife lost their house," he said. "It was foreclosed on. They had to send back their truck. And they've got two kids, younger than mine. The kids don't stop growing just because you've lost your job."
Mr. Breen, the car hauler, told me about an aunt, Lee Jones, who was the owner of Diversified Industries, a company that painted grille assemblies for the Big Three.
"It employed about 75 people on the day and night shift," he said. "She got caught in the industry's downsizing within the last year and a half and had to close her doors. So the jobs in her shop are just gone."
The auto industry problem is an enormous one, with implications for every American. We can rescue and reshape the industry in a way that makes sense, economically and otherwise. Or we can close our eyes to reality, as we have so many times in recent years, and suffer the inevitable devastating consequences.
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