Detroit News columnist Daniel Howes is just coming around to the idea that Detroit’s automakers are about to collapse, bringing about the reckoning that any open-minded journalist could (and did) see twenty years ago. And Danny’s pissed. At us. “It’s easy, sitting behind a keyboard, to type, ‘no one’s too big to fail’ or ‘let ’em file Chapter 11′ or ‘serves ’em right.’ It’s especially easy if you and yours don’t have to endure directly the jobs lost, tax revenue gone, pensions halved, health care benefits denied, dealerships closed, supplier lines shut down.” Is this how Detroit thinks of its current predicament? Fortress Detroit? That they’re somehow blameless victims in all this, and America actively WANTS them to fail? Apparently so. “But autoworkers, salaried employees, retirees, even executives, are people, too. The nasty Schadenfreude heaped on this dismal situation says more about those doing the heaping than those who go to work each day, do their jobs and play by the rules.” Danny goes for an “if… then” close…
“If Detroit as we know it is to be over — and I think it may be, even with federal help — its automakers and the UAW will need to change even more radically than they already have: fewer brands, plants and dealers, more flexible work rules, smarter marketing, better products.” Excellent point– you know, if the scribe had made it ten years ago. Or three. Or last year. Still… “Otherwise, the feds only would be delaying the inevitable — with taxpayer money.” Thanks for finally giving those of us living outside the center of the world a look in.
The US government is also bankrupt.
GM is just the lead canary in the coal mine, the economy is going to get a lot worse.
The Detroit News needs to come around to the fact that this can ONLY end badly. Yes, there will be mass layoffs, a one-state recession will become a one-state depression for Michigan, and Michigan’s population will probably contract dramatically. The thing is, this is going to happen regardless of any bailout. Heck, GM has already admitted it won’t survive until Bush leaves office.
AG :
I think they get it. (How could they not?) They just don’t want to ascribe responsibility for the epic fail.
Richard Nixon famous quote encapsulates their perspective, and that of Detroit: “I take all of the responsibility but none of the blame.”
OK, The Big Three have admitted SOME of the responsibility. And the Detroit News none. But you get the picture.
Funny, Robert mentioned Nixon. In today’s climate the guy could be nominated for sainthood. Just look around, it is scary.
“Richard Nixon” … uh-oh, here we go again. Nothing to see here, please move along.
“the feds only would be delaying the inevitable”
Yes, and Washington probably realizes that but can’t say it. In the political world, delaying the inevitable is often all that can be done. And good enough to allow moving on to the next crisis. Bigger problems await. The entitlements crash will make the D3 bailout look like child’s play.
Let’s not forget that the Feds bailed out Chrysler once…and it seemed to work. Been interesting to watch how some industries are more “bail-outable” than others (yes a new word). Nothing wrong with tossing a few billion to AIG…because, hey, they can’t fail. Or, how about farmers? Talk about the ultimate micro-economic bailout…paying farmers NOT to grow. Maybe we could pay GM to NOT build cars…I mean, the union already pays workers to go to a job bank to do…err…nothing.
But seriously, I have no issues with government assistance for national security purposes. If the auto industry goes under…who builds Hummers for the Army? Or how about trucks? Toyota?
Two oxes must be gored…
1.) Bad management; I see no reason why the public should pay Rick W. more than President Bush since they’d both be on the public payrolls. I mean, who has a more important job?
2.) Union wages/preferences. Yes, I know, we must have a middle class but I’m not sure some of these union jobs qualify as middle class anymore…with overtime and benefits, a single male could earn $150k … without any qualifications or the ability to read.
Which reminds me…why do we have unions today? I mean, I’m not in a union. If I lose my job, I get no severance or go to a job bank. I just have to figure sh*t out. I don’t even get “job training.” Or a buyout. Just…thanks, sorry about that. They sure served a purpose back in the day…but today? Time moves on and the only constant is change. Are unions really necessary in a modern US economy? For example, my ex-wife used to work in retail. Nasty hours, need college degree and get starting wage of $10/hour. After two years she moved up to $11.50/hour with an eye on an assistant mgr. job making $18/hour working 60 hrs/week and late nights. Who can live on that?
Let’s unionize the retail worker bees!!!! Who’s with me???
Having lived in Motown for a few years, and spent a lot of time there in other days, I scares me to think what southeast Michigan will look like after this implosion.
and America actively WANTS them to fail
I have witnessed this view first-hand in larger urban areas and especially on the coasts. People HATE Detroit, both the industry and the city itself. LOTS of people want to see Detroit fail and go away. Of course, most of thse people are complete shitheads but that is a different argument. I can’t even begin to tell you how many people have met in the south, DC and NY who have wanted Detroit to just die off.
Now, I am not UAW fan nor am I trying to defend the Big 3 but people outside of the Midwest are so caught up in their own useless lives that they could care less.
derm81 :
Forget anecdotes. I’d like to see some data on that.
Saying you don’t want to bailout Detroit is not the same as saying you wish they were dead. BIG DIFFERENCE.
And it is is Detroit’s indifference to this difference– clinging to “what’s good for Detroit is good for America”– that has helped put it right where it is today.
That said, if there was NO support for Detroit outside of Detroit, NO ONE would be talking about bailouts.
Not everyone in Detroit has been marching to the death tune of entitlement. Some of us have had eyes wide open and expected this day for longer than any outsider.
We all know a union guy that was way overcompensated to sit on his @ss, manage a 4 hr. lunch and make overtime…as the suppliers took a beating for not being expeditious, and union abuse for doing THEIR jobs in hopes of avoiding said beating…
Our jaws dropped as we heard announcements of “no plans for small cars” repeatedly. Cringed at executive compensation, mismanagement, and the export of jobs (thanks, unions). Scratched our heads in traffic filled with lone SUV rangers heading from the plant to their weekend cottage.
There is more disdain for the Detroit 3 and the unions here than anyplace else. The cannibals are driving us ALL down their highway to hell. I’d rather walk than pay for their gas.
I dont think I can even dig up stats or data on it. I am just going with what I have heard over the years. I have heard lot of support fot it, but I have hear many many people simply say that they wished Detroit would go away. But hey, Detroit is to blame for this image. I wont lie there.
derm81 “I can’t even begin to tell you how many people have met in the south, DC and NY who have wanted Detroit to just die off….but people outside of the Midwest are so caught up in their own useless lives that they could care less.”
Hmmm maybe its the less than empathetic or sympathetic ear coming from those in Detroit on the economic plight heaped on those who actually supported and purchased their products, due to their lack of durability. Instead derision and scorn has been the order of the day.
Try treating a customer badly for years and see what sympathy you receive when you tell them you are facing bankruptcy.
Forget anecdotes. I’d like to see some data on that.
Robert,
Sure it’s anecdotal, but as has been said, the plural of anecdote is data. derm81 isn’t the only one who’s noticed that it’s not just the domestic car companies who get dissed in comment threads. You can find remarks hostile to Detroit the city, Detroiters, Michigan and Michiganders on many automotive blogs including TTAC and you don’t have to be a Big 3 cheerleader to notice them. As moju pointed out, Michiganders intimately know the flaws of our local industry. We know about UAW featherbedding (remember when schools used to teach terms about union excesses? Not likely in today’s AFT/NEA monopoly schools) and we know about clueless managers and executives that care more about their power and fiefdoms than they do about good product.
That being said, we also don’t want to see our region die and become an industrial Appalachia (with apologies to my fellow Americans in Appalachia).
Obviously the anti-Detroit (as opposed to anti Big 3) attitudes are not in the majority, otherwise, as you point out, any bailout would be a political no-starter, but they are prevalent enough that I’m not the only Detroiter who gets the impression that there are a lot of folks out there who disdain my hometown, my state, and my neighbors.
Most people are not happy with the Wall Street bailout, but you don’t see the anger at Wall Street like you see hot anger at Detroit. People don’t seem to be saying that they’ll never buy and sell stock again, like they do about Fords or Chevys. Obviously there are differences. Wall Street executives are pretty invisible. I’m sure more Americans know who Rick Wagoner or Bob Lutz are than John Mack (Morgan Stanley ceo)or Lloyd Blankfein (Goldman Sachs ceo). Also, while people are concerned about their investments, 401Ks and pensions, they are not as physically tangible as a car. You may think about your investments, but you drive your car. If there’s a problem with your car, you feel the pain immediately whereas an investment decline doesn’t hit home until you sell the asset at a loss.
Politics and ideologies aside, there is palpable fear here in Michigan about the collapse of the auto industry. Sure, that’s self interest at play, but I think other Americans ignore the effect that implosion will have on them.
During the financial crisis, we’ve seen mention of the difference between the financial markets and the “real economy”. If Detroit completely craters, there’s a strong possibility that it can bring down much of the real economy with it.
The folks who disdain Detroit and think it will have no impact on their lives if GM/Ford/Chrysler disappear are whistling that tune as they pass a marble orchard.
The US government is also bankrupt.
You do not know what “bankrupt” means. The U.S. gov’t has no difficulty acquiring the cash to meet its obligations. When it sells bonds they are oversubscribed by a factor of 4.
Plus it has the unusual ability to simply change its obligations to fit the cash on hand.
Plus it has the unusual ability, in a pinch, to create as much money as needed out of thin air.
Must be nice.
Bozoer Rebbe :
Sorry, but I don’t see it. The only “hate” I see towards Detroit emanates from two sources:
1. Radical environmentalists who vilify The Big 2.8 for building SUVs when they should have been building something more socially responsible. (Given that millions of Americans BOUGHT these SUVs, I hardly think the consumers themselves “blame” Detroit for providing them.)
2. Customers who got BFed by D2.8 dealers. In this case, my “gut” (if that’s the way we’re rolling here) tells me they blame the manufacturer concerned, not Detroit as a whole. And probably not the workers whose jobs, jobs, jobs the bailout seeks to protect.
So how many of these anti-Detroiters exist? No clue. But I’d be willing to bet dollars to donuts that it’s not a large percentage.
Hey! If we’re going to spend $50b bailing your asses out– OK, our collective asses out– how about spending a couple of hundred grand on an independent poll? Or maybe a mil on a PROPER INDEPENDENT STUDY of the effects of a bailout on the U.S. economy.
In any case, it’s NOT ALL ABOUT YOU. If there IS an anti-bailout backlash, it’s about Washington. Not Detroit.
Actually, alot of people do hate the unions and partly blame them for the automakers downfall, so “probably not the workers” in #2 above isn’t quite true. But it’s not just a hatred for automakers’ unions, it’s union people in general.
Usually when I hear people badmouthing unions it boils down to:
1. Overpaid for the work they do.
2. Overpaid for the job skills or education they have.
3. They have too much benefits, healthcare, and pension compared to other non-union workers.
4. They’re lazy, and having things like job banks where you get paid even though you’re not working is too much like unionized welfare.
I’d add some more, but I think all this typing is giving me carpal tunnel sydrome. I think I’m going to have to go down to the union office and apply for disability now. ;)