I visited the beloved state of Michigan last month where I once anchored the news at WKBD-TV in Detroit and at WILX-TV in Lansing. I must say I was saddened by what I saw and heard.
During the ten years we lived in the Great Lakes State, my wife and I celebrated the births of our two daughter. I earned my masters degree at Michigan State University. Many of the friendships we cultivated in Michigan still exist today. It’s a state where a long feared reality has become a bitter reality Michigan may never recover from.
Despite decades of warnings that Michigan had to diversify its economy from its all encompassing automobile industry, the state’s failure to do so has left it in an economic mess.
Tens of thousands of autoworkers have lost jobs. The unemployment rate is 12 percent.
The Big-Three automakers have shrunk to a shadow of themselves and may die completely despite multi-billion dollat federal bailouts for two of the Big-Three.
This week, President Barack Obama virtually fired General Motors CEO Rick Wagoner. Chrysler was told to complete an alliance with Italy’s Fiat as both U.S. carmakers teetered on the brink of bankruptcy.
Chrysler and GM are being kept alive by $17.4 billion in federal loans. At risk are about 77,000 GM and Chrysler jobs in Michigan.
Ford, the relative bright spot of the moment, hasn’t sought U.S. financial assistance as Chrysler and GM have. On the other hand, Ford hasn’t had a profitable year since 2005. It had a record loss of $14.7 billion in 2008.
“I think we better face up to it that Michigan was a great state,” said Gerald Meyers, a University of Michigan business professor and the former chairman of defunct American Motors Corp.
“Michigan is now going to descend into a wonderful place to live, a great place to vacation and a fine producer of agricultural products,” Meyers said.
Automakers insist they see signs of life in the marketplace. But March was another dismal month for US car sales, as consumers clung to their old vehicles in the face of America’s economic woes.
General Motors sales were down 45 percent, compared with the same month a year ago. Ford slid 41 percent, while Chrysler was down 38 percent.
Jack Lessenberry is a Wayne State University professor and commentator on Michigan Radio and recently wrote about corresponding with the legendary Jack Casey, who has been a public affairs analyst for more than forty years.
In 1957, Casey came to Detroit to be a reporter for the Free Press.
Here’s what Casey told Lessenberry:
“The first major story I worked on was the release of a major economic study by a University of Michigan team about Michigan’s future.” What did it say?
“Well, the bottom line was that Michigan must get off its dependence on the auto industry. “So what happened?” he said. “Nothing. The attitude in the industry was, ‘ ‘Why change? We are smarter and nobody can match us.'”
“Well, we know what eventually happened. After years of decline, by the end of last year, the entire industry was on the point of collapse. Former President Bush threw Chrysler and General Motors a lifeline then. Today, President Obama is announcing his plan to help the domestic auto industry survive.
Nobody is likely to be completely happy with the Obama plan. As we saw last December, a significant faction in Congress thinks the government should just pull the plug and let those two once-mighty automakers declare bankruptcy and, maybe, go out of business.
On the other hand, the Detroit News complained yesterday that the president should stop “bad-mouthing” the auto industry. That’s evidently because he said “There’s been a lot of mismanagement (of it) over the last several years.”
This is an industry that has been losing millions an hour for years, while at the same time stoutly resisting any kind of major and necessary change. If that’s good management, Three Mile Island was one heck of a well-run nuclear power plant.
By the way, polls show a majority of voters outside Michigan don’t think the President should “bad mouth” the domestic automakers. They think he should just let them die.
What we have to realize is that the President’s cuffing the automakers around a bit for their past sins is not only justified, it is probably politically necessary if he is going to help them now.
Everything I’ve heard from President Obama on this so far has smacked of extreme common sense. Last week, he said he thought that while it is appropriate for taxpayers to provide help, the price should be that the industry reform itself.
Now it is time for a some common sense on our part. The domestic auto industry may survive. But here’s the important thing to remember. It will never be what it was. Not only will its market share continue to shrink; never again will masses of unskilled kids be able to leave high school and get good paying jobs on the assembly line, jobs that will last for life. That’s over, forever.
Yes, we need to save the auto industry if we can. But the more important debate should be about how to invent a new future for the rest of us. And we better get started.
After all, we’re only about half a century behind.”