By Michael A. Fletcher
Washington Post Staff Writer
Sunday, February 24, 2008
TOLEDO -- The Ford plant in nearby Maumee, where workers stamped out automobile fenders and dash panels, will close this year. Johnson Controls, which for years made seats for the iconic Jeeps that are assembled here, recently lost that contract to a firm in India. And American Standard is closing its century-old plumbing fixtures plant, eliminating the remaining 165 manufacturing jobs that paid as much as $19 an hour.
It is a common story throughout Ohio, which has lost more than 200,000 manufacturing jobs since 2000. "Manufacturing is getting its head handed to it around here," said Thomas J. Joseph, business manager of Plumbers and Steamfitters Local 50, which covers northwest Ohio.
It is also a story the two Democratic presidential candidates are promising to change. As Ohio's pivotal March 4 primary approaches, Barack Obama and Hillary Rodham Clinton have each called for significant infrastructure investment, development of alternative energy and other "green-collar" jobs, while promising to toughen environmental and labor standards that accompany free trade deals.
Those ideas are welcome here in heavily unionized and heavily Democratic northwest Ohio, but at the same time, no one seems to believe they go far enough to reverse the powerful tide of globalization that many blame for the constant manufacturing job losses.
"They identify with the situation, but they don't do anything about it," said Rep. Marcy Kaptur, (D-Ohio), whose district includes Toledo. "They are descriptive, not prescriptive. We want more detail and we want it now."
This is the dilemma facing the Democratic candidates as they campaign in Ohio's scarred economic landscape. The problems confronting places like Toledo are so deep and complex that there may not be answers that are both viable and popular.
Infrastructure investment could help stem the floodwaters that regularly overwhelm riverbanks after heavy rains and rebuild Toledo's rutted roads and provide more jobs. Developing alternative energy meshes with the vision of local officials who tout the region as a hotbed of renewable energy technology.
Both candidates said they would eliminate tax breaks for companies that send jobs overseas and use the money for programs to help displaced workers. Many here are up in arms about what they think is an unfair trade and worldwide business environment. But short of erecting trade barriers that many economists and business leaders say would be self-defeating, no one seems to know what to do -- including Obama and Clinton.
"To get elected, you have to appeal to everybody. But it is hard to say this makes a lot of sense. If you don't figure out how to engage in the world's economy in today's world, you're kidding yourself," said Thomas E. Brady, president of Plastic Technologies, a suburban Toledo firm that designs and oversees the manufacturing of containers for such products as soda to laundry detergent. "The auto industry simply can't afford to pay people $28 a hour plus benefits anymore."
Brady, a board member of the Regional Growth Partnership, a privately funded economic development group in Toledo, said the prescription for a secure economic future lies in innovative technology and education -- a view that Obama and Clinton endorse.
But the question is how to get there. The Toledo metropolitan area's unemployment rate has dipped below 6 percent only once in the past 20 years, and is now 6.4 percent -- 1.5 points above the national rate. Median home prices here barely top $100,000, yet the city is in the top 20 in the nation in number of foreclosures. Even a bright spot is the result of a downside. One of the fastest-growing segments in the local economy has been warehousing, where employment grew 40 percent in the past year -- but that is largely because of the conversion of vacant factories into storage space.
Both the Clinton and Obama economic plans offer protections to these struggling working-class voters. They would repeal tax cuts for upper-income Americans, extend the cuts for the middle class and offer tax credits to help families pay for college.
Especially important in Ohio, both Democrats have foreclosure relief plans. Obama's offers $10 billion in bonds to help homeowners avoid foreclosure. He also would give a tax credit to struggling homeowners to cover 10 percent of the interest on their mortgages each year. Clinton would temporarily freeze foreclosures and interest rates on adjustable rate mortgages held by people with poor credit.
But for all the promises and proposals, Toledo's economic problems have causes that the candidates have been unable to address.
"While you many be able to slow some things down, the long-term interests of the region are going to have to be linked to developing a competitive position in the global economy," said Daniel M. Johnson, a University of Toledo professor of public policy and economic development. "We've got both offense and defense to play here."
Advances in manufacturing technology have made it possible to produce and export more products with fewer workers. Even firms that are doing well, such as glass maker Libbey, are growing more rapidly abroad than at home. While there is little chance that Libbey will leave Toledo, there is also little chance it will expand here in the near future. But the company recently opened a new plant in China.
Instant communication and cheaper shipping have made worldwide business easier. Also, businesses are wary of locating here because of the high cost of labor, which is an outgrowth of the strong union presence. Manufacturing workers here earn an average of $68,000 a year, according to Moody's Economy.com.
But it is the free-trade pacts, particularly the North American Free Trade Agreement, that are mostly blamed for the exodus of good jobs. Both Clinton and Obama have said they would seek to rework NAFTA to include tougher labor and environmental safeguards, a promise that pleases workers here even if it is unclear what the candidates would do to change the terms of the deal. And whatever they do is unlikely to reverse the job losses.
"I won't stand here and tell you that we can -- or should -- stop free trade. We can't stop every job from going overseas," Obama told GM workers this month.
Both candidates oppose pending trade deals with South Korea and Colombia. Clinton has called for a "timeout" on trade deals, until a comprehensive policy to guide future agreements is worked out. Obama has promised not to sign any new trade pacts unless they have "protections" for U.S. workers.
"NAFTA is a good place to start," said Matt Seedorf, 43, who was recently laid off from his job of 13 years making automobile heating coils and is training to be a welder. "Our country needs to be on a more level playing field with the rest of the world."
As Seedorf spoke, three fellow trainees nodded in agreement. Mardel Whisnant, 23, a former ironworker, is also training as a welder, a job that with a union card pays $32.10 an hour and offers full benefits. He does not claim to know how NAFTA works but is convinced it has hurt him. "I have a lot to take care of, and [working at] McDonald's won't do it," he said.
Three of the four trainees said they support Obama, although they said they doubt he can alter the economic dynamic. "I don't know who will be able to change that," said Whisnant, who is attracted by Obama's "freshness;" while Seedorf remembers that NAFTA was enacted during President Bill Clinton's tenure. His colleague, Melissa Arndt, 23, says she supports Clinton, whom she sees as brainy and experienced.
Both candidates have called for investment in green technology and education in hopes of creating industries that would provide good jobs to replace those leaving the country. As the auto industry has slowly declined, Toledo business and political leaders have been promoting renewable energy as an industry that might replace it.
Boosters say the area, on the edge of Lake Erie, is prime territory for wind farming. Local fiberglass manufacturers have been working to optimize the design of blades for windmills. Toledo is also close to prime farmland, making it a good candidate for ethanol production. The city also has a long proud history in the glass business, which it is trying to extend in its effort to further commercialize solar energy.
There have been successes, but even those have caveats. First Solar, a company that makes thin-film solar panels, relies on technology that was developed with the help of federal research money. Its stock price has skyrocketed and production is soaring. But much of the work is not at its modern plant in suburban Perrysburg, Ohio, but at its four factories in Malaysia.
Clinton has promised to invest tens of billions of dollars in renewable energy technology, and that is what Kaptur, wants to hear. She has secured funding from Congress for her district to push a wide range of alternative energy research and says that there has to be a way to make sure those investments provide jobs for people in Ohio.
"How do we ensure the broad distribution of the wealth and ensure that it is not walked offshore?" Kaptur said. "It's not like we've been asleep at the switch. If American people invest in research and development and global companies take it elsewhere, how does a place like Toledo compete?"