I know we’ve had a lot on this blog about the current recession and how hard it has hit the auto industry and Michigan.
So, I apologize if you’re sick of reading about it, but I’m posting a link to this sobering Wall Street Journal Story about laid-off white collar workers.
“Mr. Barr, 46 years old, was the type of well-educated, white-collar ‘knowledge’ worker that Michigan hoped would help offset a decline in auto-assembly jobs. But Detroit’s Big Three car makers have aggressively thinned these ranks in the past two years, perhaps permanently, casting tens of thousands of midcareer, white-collar workers into an extended limbo,” The Journal writes.
It continues, “Many displaced veteran workers who once earned high salaries in engineering, information technology, research and design jobs aren’t now destitute, thanks to generous severance packages. But they find themselves stuck, unable to find comparable work in Michigan, but also unable or unwilling to uproot their families and try their luck out of state.”
-Michigan’s unemployment rate as of August was 15.2% compared to 9.6% in November
– its unemployment rate has led all states for at least 26 of the past 28 months
– Metro Detroit’s 17.7% rate is the highest of any large urban area in the country
In honor of his 100th day in office, NPR ran a story yesterday on Detroit Mayor Dave Bing.
The former NBA star is contesting with a $275 million deficit, a potential municipal strike, school and transportation systems that are tetering on collapse.
According to NPR some are questioning whether Bing, a political novice who replaced Kwame Kilpatrick, is up to the job.
Bing won a recent primary with 70 percent of the vote. But his opponent Tom Barrow, a C.P.A., says Bing is in over his head.
“He just doesn’t understand how municipal finance works; he doesn’t understand how city government functions and works; he’s having to be told things and [is] just clearly out of touch with Detroiters,” Barrow told NPR.
Some potential good news for the struggling auto industry: The New York Times reports the so-called “Cash for Clunkers” program has really taken off – so much so that it is completely out of money.
“About a quarter-million vehicles were sold under the program,” the Times reports, “which offered payments of $3,500 to $4,500 for people who traded in old cars for new ones that had higher fuel economy. The average payment worked out to about $4,000, and the total payout, about $1 billion, the amount allocated by Congress under the program, formally called the Car Allowance Rebate System, or CARS.”
The program was supposed to accept applications until the funds ran out, or November 1, according to the article.
Will Congress allocate more funds to continue this popular program? We’ll find out…
Remember Steve Rattner? The guy who was going to save us all?
Well he has quit his job as Car Czar, helping oversee the bailout/bankruptcy of The Big Three, after only five months.
Car Czar, Car Czar, Car Czar, fun to say, isn't it?
“With GM’s restructuring complete, Steven Rattner, whose leadership and vision were invaluable to the auto task force’s efforts, has decided to transition back to private life and his family in New York City,” Treasury Secretary Timothy Geithner said (via Detroit News).
The former Wall Street financier worth $188 million will be succeeded by Ron Bloom, a former adviser for the United Steelworkers.
So. They replaced the Wall Street guy with the union guy after the companies emerge from bankruptcy?
Just remember, people of Detroit, they’re putting you first, not the special interests.
GM is emerging from bankruptcy today, free of debt, under modified contracts and with the president’s approval.
It was in Chapter 11 for 40 days.
The federal government controls a 61% share of the new, leaner company.
Meanwhile, some jerks are organizing a boycott of the company, as if it didn’t have enough problems.
The Federal Government will steer $50 million in assistance to communities with auto plants that have experienced significant layoffs, The Associated Press reports.
The money will come from federal stimulus funds and be used for job training and placement. Continue reading
The New York Times asked a number of economists to respond to the question, “do we need a domestic auto industry? Many American manufacturing industries, like textiles and electronics, long ago moved to other producing countries. Why is the auto industry different?”
I know this is a few weeks old, but it took me awhile to get through it all.