Tag Archives: The U.S. Auto Industry

The Challenge of Repurposing the Plant

The Associated Press has conducted an inventory of the 128 auto plants closed by the Big Three since 1980 and the results are discouraging.

Only about three in five has been repurposed for a new use. Those that have been reopened are employing far few workers at lower wages.

job1

“The cost is going to be borne by the next generation,” said James Rubenstein, a professor at Miami University in Oxford, Ohio, who has studied U.S. auto plant closings and openings. “It’s the children and grandchildren of the laid-off workers. They won’t have the opportunities in those communities.”

The problem is made worse by a slumping commercial real estate market and environmental hazards common at manufacturing sites.

-AS

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Population Loss in Michigan

Michigan led the nation in one-year population loss, dropping below 10 million residents for the first time in nearly a decade, according to this article from The Toledo Blade.

Michigan lost nearly 33,000 residents this year as its economy suffered in a recession that was particularly brutal for the US auto industry.

Still, over the past decade, Michigan has gained a total of about 31,000 residents, owing mostly to births and foreign immigration.

7510-greetings-from-michigan-the-great-lakes-state-AS

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Green Shoots at GM?

Interesting article about the state of General Motors from Scripps Howard.

Despite the car maker’s highly publicized reorganization this year, GM still leads the nation in market share with about 20 percent of the total, down from 22 percent in 2008.

Consumers seem to have shrugged off the auto maker’s reorganization, according to tis article. This is particularly true of Chinese consumers who have revived the popularity of the Buick.

1998 Buick Ultra: Who would have thought this would be the car that would save GM?

1998 Buick Ultra: Who would have thought this would be the car that would save GM?

Meeting Chinese demand will be critical because the country surpassed the US as the biggest consumer of automobiles this year.

-AS

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President Obama to Talk Jobs in Youngstown Area

President Obama will speak just outside Youngstown today at GM’s Lordstown plant, kicking off the a presidential tour of the Midwest on jobs and the economy, according to The Detroit News.

GM Factories

The plant  has been through a series of ups and downs in the past year.

From The Detroit News: Thirteen months ago, then-CEO Rick Wagoner and dignitaries attended a splashy event in the plant to announce a third shift and $350 million investment in the plant to build the new Chevrolet Cruze sedan, which is expected to launch next year and get 40 miles per gallon.

A month later, the auto industry and financial markets collapsed. By January, Lordstown had lost two shifts, and about 2,800 workers were laid off.

GM said last month that a second shift is being called back to work at Lordstown because of increased demand for the Chevrolet Cobalt, which was a big seller during the $3 billion “cash for clunkers” program, and to prepare for production of a new more fuel efficient compact model next year. The workers being recalled include 1,000 hourly workers and 50 salaried.

General Motors CEO Fritz Henderson is also expected for the speech.

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What Went Wrong in Detroit?

David Frum of the conservative American Enterprise Institute has written an interesting (albeit pessimistic) account of what went wrong in Detroit (everyone’s favorite topic).

In his National Post article “What Killed Detroit,” Frum argues that poisonous race relations and an insufficient commitment to arts and culture sealed the city’s fate long before the auto giants crumbled.

Frum, giving us his best thoughtful face.

Frum, giving us his best thoughtful face.

“The collapse of the automobile industry seems the obvious answer. But is it a sufficient answer?,” he wonders. “The departure of meatpacking did not kill Chicago. Pittsburgh has staggered forward from the demise of steelmaking. New York has lost one industry after another: shipping, garment-manufacture, printing, and how many more?”

Whether it’s fair to compare Detroit to Chicago and New York is one question. Those cities always had more diversified economies. New York had Wall Street; Chicago the Mercantile Exchange. And Cleveland, well, Cleveland isn’t entirely out of the woods, by any means. But for argument’s sake, we’ll allow that it is entirely different.

I do think his theory has some merit for the purpose of discussion, although it’s probably oversimplified.

His point about race relations is legitimate, I think. I would add to the discussion the culprit of poorly conceived housing and transportation policies, which were, of course, shaped overwhelmingly by racial tensions.

The part about arts and culture is a little more of a stretch.

“Pittsburgh has Carnegie-Mellon,” he argues. “Cleveland has Case Western Reserve University. Chicago has the University of Chicago, Northwestern, and a campus of the University of Illinois. Detroit has… Wayne State.”

Again, Cleveland’s Case Western is a school of 10,000 that boasts a $1 billion impact on the Cleveland economy annually. It’s important, but I’m not sure it’s a game changer. Furthermore, it’s an accident of fate, really, that Detroit sent it’s scholars to Ann Arbor. But for the sake of argument, we’ll allow that too.

Frum goes further to compare each city’s symphony, which, I really think may be more important symbolically, than a economic panacea. But his point is that the city isn’t dedicated enough to the arts.

At this point, the liberal in me wonders: is this the conservative right’s way of saying Detroit deserves what it’s getting because people there are glibly ignorant and, by the way, racist?

Here’s something else he says that I like though:

“My friend, it’s relevant to mention, is the son of an Irish cop, ardently Catholic and defiantly conservative. Why did Chicago recover and Detroit fail, I asked. What doomed the city? He thought for a moment. ‘Not enough gays.'”

I hate to generalize, but I think he’s on to something there. In Columbus, Ohio the gay population is single-handily revitalizing downtown neighborhood after downtown neighborhood. Columbus is able to attract gays and they have done a lot for the city. In Cleveland, not so much.

(For its sake, Cleveland is working to bring The Gay Games to the city in 2014 and I have my fingers crossed.)

Anyway, I’ve really thought about it and I think it still comes down to the auto industry for Detroit.

Frum goes to great lengths to describe the city’s finer points during its heyday.

“The Detroit of 1930 had rebuilt itself as a grand metropolis of skyscrapers, mansions, movie palaces and frame cottages spreading northward beyond the line of sight, exceeding Philadelphia and St. Louis, rivaling Chicago and New York.”

There weren’t fine academic institutions in the city in those days either and the symphony probably wasn’t all that much better. So what’s changed?

Detroit is hurting, surely, but that could be expected in any city that was suffering sudden loss of its major industry.

And despite what Frum says, it’s not necessarily too late for Detroit. Pittsburgh did it, he points out, but it’s been 30 years since Pittsburgh lost steel and it’s just now recovering. Even in New York and Chicago, I’m sure major transitions in the economy weren’t without their pain and adjustment periods.

There still a lot of valuable capital in Detroit and I’ve read reports of different manufacturers vying for shuttered plants.

It still remains to be seen how Detroit will transition from auto dominance. But one thing is sure, Detroit isn’t going to “die.” The city will carry on and it will change, for better or worse, lousy symphony and all.

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Filed under Art, Good Ideas, Green Jobs, Headline, Race Relations, U.S. Auto Industry

Jeffrey Eugenides’ Detroit

The Daily Beast is carrying an article today celebrating the 16th anniversary of Jeffrey Eugenides’ novel, The Virgin Suicides, a dark, whimsical, coming-of-age story set in suburban Detroit.

Eugenides, a Detroit native, later went on to write the Pulitzer Prize-winning and best-selling Middlesex, which also features the Motor City prominently, from the early days of immigrant tenements to red-lining, the race riots, and suburbanization.

Eugenides

Eugenides

The Virgin Suicides offers an exceptional descriptions of Detroit in its heyday; Middlesex an account of the tumultuous series of events that have made it the city it is today.

In an opening scene of The Virgin Suicides, Eugenides describes the setting in his quiet residential community following the suicide of the first Lisbon girl:

“That was in June, fish fly season, when each year our town is covered by a flotsam of those ethereal insects. Rising in clouds from the algae in the polluted lake, they blacken windows, coat cars and streetlamps, plaster the municipal docks and festoon the rigging of sailboats, always in the same brown ubiquity of flying scum.”

“[Celia] was standing by the curb in an antique wedding dress with the shorn hem like she always wore, looking at a Thunderbird encased in fish flies. ‘You better get your broom, honey,’ Mrs. Scheer advised. But Celia fixed her with her spiritualist gaze. ‘They’re dead.’ she said. ‘They only live for 24 hours. They hatch, they reproduce and then they croak. They don’t even get to eat.’ And with that she stuck her hand into the foamy layer of bugs and cleared her initials: C.L.”

Recommended reading for all Detroiters as well as those that are just interested in learning more about one America’s great industrial centers.

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Poof! 21,000 jobs, 40% of Dealerships Gone

  We all knew it was coming and now it has: GM is bankrupt.

  The quintessential American automaker entered Chapter 11 this morning. It is $172 billion in debt, according to The New York Times.

Earns GM

  GM has announced plans to close 12 factories in Michigan, Indiana, Ohio, Delaware and Tennessee.

  The government’s going to give GM another $30 billion to get it through what President Obama hopes will be a quick restructuring.

  Mercifully, at least GM has promised to keep its headquarters in Detroit, The Times reports.

  Chrysler, meanwhile, is expected to emerge from bankrupcy in the next few days.

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