LANSING, Mich. — Logan Square, a bottom-of-the-market shopping center on the southwest side of my automaking home town, may represent the future of American retail. The anchor tenant is a plasma donation center, where desperate donors puff cigarettes while awaiting their appointments with the needle. Scattered among the boarded-up or dusty-glassed storefronts are a laundromat, a Dollar Tree, a Save-A-Lot food store, a Rent-A-Center and a tax preparer offering instant refunds for people who need that check now. A poverty pimpin’ conglomerate could make a lot of money franchising these PoorMalls to inner-city neighborhoods and small towns gored by globalization. Logan Square, however, developed organically. Throughout the 1990s, it was occupied by a hardware store, a bakery, a barber college, a Kroger’s supermarket and a hobby shop.
What happened? As author/autoworker Ben Hamper put it in his shoprat memoir “Rivethead,” Michigan “scratches its butt with the jagged peaks of the automotive sales chart.” Since Hamper’s book came out in 1991, American brands’ share of U.S. auto sales has fallen from 70.5 percent to 45 percent. Michigan has suffered most from car buyers’ turn away from patriotic consumerism: In the 2000s, remembered here as “The Lost Decade,” its per capita income dropped from 18th to 37th, and it was the only state to lose people, its industrial disaster proving even more depopulating than the natural disaster in Louisiana.
The withering of the American auto industry, to the point where the Big Three — Ford, Chrysler and General Motors — have been downgraded in journalese to the Detroit Three, is not just a crisis for the Rust Belt. It’s bad for the entire country, particularly workers. The United Auto Workers not only founded the modern labor movement, by winning recognition during the Flint Sit-Down Strike of 1936-37, it set the standard for wages up and down the economy.
“We used to get stoned in the newspapers every time we’d get something in our contract,” said Don Cooper, a retired Lansing autoworker who built the now-defunct Oldsmobile from 1965 to 2002. “ ‘Well, the autoworkers drove the price up because they got a raise.’ But then everybody else would start getting raises after we did.”
UAW membership has been sliding down the same rocky peak as domestic auto sales. In its prime, in 1979, the union had 1.5 million members. Today, it has 400,000. Now, what once was the nation’s flagship union doesn’t even set the standard for wages in the auto industry. Those wages are set by foreign automakers who create plants in Southern states to avoid American unions. UAW members now build just over half the cars produced in the United States. As recently as 1999, they built 85 percent.
“The continent’s Yankee automotive industry was all but destroyed in the 1990s and 2000s in favor of foreign-owned factories in the Deep South and Greater Appalachia, just like the textile and forest products industries before it,” Colin Woodward wrote in “American Nations: A History of the Eleven Rival Regional Cultures of North America.” “Some observers feel that the ‘neo-Confederates’ will force the other nations to follow their lead, turning the entire federation into a giant ‘low-wage export platform’ for advanced, highly educated industrial societies in Western Europe and northeast Asia.”
In 2008, when the chairmen of GM and Chrysler begged Congress for a loan, Southern senators tried to do exactly that. Sen. Bob Corker (R-Tenn.), who represents a Volkswagen and a Nissan plant, attempted to force the UAW to accept “wage parity” with foreign auto plants as a condition of the bailout. His attempt to cut union wages to non-union levels was mooted when President George W. Bush decided that the auto companies were too big to fail and sent $17.4 billion, enough to keep them afloat for three months. (Corker later intervened in the UAW’s unsuccessful attempt to unionize the VW plant in Chattanooga, telling workers a “no” vote would be rewarded with a new SUV line.)
Nonetheless, American auto companies have lowered wages to compete with those in Japan, Germany and Italy — the Axis of Automakers. Because it provides pensions and benefits that were standard in a more prosperous era, GM’s labor costs average $58 an hour, compared with $48 for Toyota and $38 for Volkswagen. As a result, the UAW agreed in 2007 to a two-tier wage system, in which new hires earned $14 an hour, less than half the $28.50 paid to longtime autoworkers. (The new contract agreed on this month by the UAW and Chrysler aims to close that gap, although many autoworkers are rejecting it.)
Admittedly, the Detroit Three alienated a lot of drivers in the ’70s and ’80s, when the Arab oil embargo created a brand-new market for fuel-efficient cars. Ford, GM and Chrysler didn’t want to build those vehicles — in part because they didn’t generate enough profits to pay union wages and benefits — so they produced some of the junkiest clown cars ever to blow a head gasket on an American freeway: the Chevette, the Nova, the Volare, the Escort. Today’s generation of car buyers has forgotten Pearl Harbor but remembers the Ford Pinto and so has no problem buying Japanese. In the ’90s, Toyota beat Detroit into the hybrid market with the Prius. Unionism and environmentalism are both progressive values, but when the two conflict in a car lot, coastal liberals usually choose the latter. This preference for foreign nameplates persists even though American cars have caught up in terms of fuel efficiency and quality. The Chevrolet Volt, an electric car with a backup gasoline engine, and the Ford Fusion, which has a hybrid option, were back-to-back Motor Trend Cars of the Year.
The American auto industry’s decline has invited an assault on labor throughout the Midwest. In 2012, Michigan Gov. Rick Snyder signed a right-to-work law that would allow workers in union shops to stop paying dues. Conservative activists acknowledged that the law never would have passed in the UAW’s heyday, but a 400,000-member union is a lot less frightening to a Republican governor than a 1.5 million-member union. Wisconsin Gov. Scott Walker (R), who has built a political identity as a union slayer, made Wisconsin the 25th right-to-work state in March. Walker rails against “the power of union bosses,” but he’s not attacking unions because they’re powerful. He’s attacking them because they’re weak. The year before he was elected governor, the GM plant in Janesville, which once had employed 7,000 autoworkers, built its last Chevy Tahoe. If I know Madison, plenty of people drove to the protests against Walker’s union busting in Toyotas and Volkswagens.
It matters to all of us what happens to a Midwestern factory town. Although the nation’s cultural and intellectual trends derive from the East and West coasts, its economic trends begin in the Midwest. The housing crisis that blew up into the Great Recession got its start in Cleveland. Carl Crow, a Buick historian, declared in 1945 that “America is a thousand Flints.” He meant that the entire nation was about to enjoy the prosperity of an automaking city. Today, with its automotive workforce down to 6,000, less than a tenth of its 1970s prime, Flint has the highest homicide rate in the nation and an average home sale price of $15,000. Writes Andrew R. Highsmith in his new book “Demolition Means Progress: Flint, Michigan, and the Fate of the American Metropolis,” “Like their postwar predecessors in the growth-hungry states of the South and West, the Vehicle City’s twenty-first century boosters aggressively publicized Flint’s probusiness economic climate, pointing to the city’s two-tier wage structure, low taxes, severely weakened unions, surplus labor and company town heritage.”
Sen. Corker, you win.
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