RISING FROM THE WRECKAGE: REVVING UP MICHIGAN
Free Press editorial
Lessons of a near-fatal crash
Rx for recovery: A new commitment to education
Education first, last and always.
That maxim practically leaps out of “Rising from the Wreckage,” the Free Press series ending today on the downfall of the American auto industry, and what happened across Michigan as a result.
Somehow, even in its budget struggles, this state has to find a way to invest in improving education or risk prolonging this ugly chapter in Michigan history.
That means changing the culture, too, to emphasize the value of schooling beyond the 12th grade and of continuous learning. The days of taking a high school diplo ma to the local factory and getting a tick et to the middle class are over. They were great while they lasted, but they left Michigan ill-equipped to adjust to the 21st-Century global economy.
The future belongs to the smart states — and Michigan had better be among those states if it expects a better one.
People who learn are also people who change, challenge, adapt and innovate, the very things the auto industry has struggled to do for a decade. Complacency is born from a lack of appreciation for learning and stretching. And that complacency, as much as anything else, brought Detroit’s auto industry to the brink of extinction.
You can see proof of that among nearly all the key characters in “Rising from the Wreckage.” They clung to what they had and disinvested in what they would need for the future.
That was also the grim assessment of the outsiders who were sent to help clean up the mess in Michigan. Steve Rattner, the private equity banker who became President Barack Obama’s car czar, couldn’t have been more blunt in summing up what was wrong in the board rooms at GM and Chrysler.
“They were delusional … just more of the same,” he said of the turnaround plans submitted by the car companies and ultimately rejected by the government.
For Michigan, the way forward begins with a commitment to creating a populace that’s better schooled, better trained, more adaptable and nimble. It has to start with a reinvestment in education.
Reinvestment is the right word, too, because for at least the past decade (colleges and universities would say even longer) this state has been slipping steadily away from its once-formidable commitments.
The 1990s could appropriately be called the gravy years of K-12 funding in Michigan, after Proposal A’s passage in 1994 leveraged statewide resources, rather than local millage rates, for school districts’ operating costs.
But as sales tax revenues have declined over the past decade, K-12 funding has lagged badly, increasing at an average rate of just 1.8% each year — well below inflation over that period and, just as important, less than many built-in cost increases for services and benefits.
The retreat from Michigan’s historical support for higher education has been just as glaring. A recent study shows Michigan dead last among all states in terms of increases in higher education appropriations over the last five years and the only state whose outlay is lower in real numbers, by more than 5%.
At the same time, an ever-increasing proportion of the funds allocated to education have gone to support a benefits structure that threatens, as in the auto industry, to bankrupt the entire enter prise.
Waning financial support is just one barometer of Michigan’s growing complacency about education. Recall how quickly the Legislature acquiesced to the idea of a watered-down Michigan Educational Assessment Program (where scoring 60% on the tests is “proficient” and a cheaper to-grade multiple choice exam has replaced one that focused more on writing) and how little resistance was put up by Gov. Jennifer Granholm.
Look at how quickly legislators backed away from tough high school graduation standards when parents and teachers complained about students’ struggles with it. Algebra II? Never mind that it includes skills that kids will need to compete in the workforce. It’s too hard, so not everyone will need to take it.
In higher education, Michigan also has not done enough to strengthen community colleges — so critical to sustaining lifelong learning both for college graduates and those seeking certification for technical jobs. Shouldn’t they be growing programs and partnerships with industry, rather than retrenching under severe financial strain?
Michigan must embrace the idea that rigor breeds greatness, and recognize that the jobs of the future will require more mental dexterity than physical brawn.
That’s especially true of the auto industry, which, even if it comes back to pre-recession levels, will never again be able to support tens of thousands of uneducated workers. A better educated Michigan will be a more stable, and more prosperous, state.
It’s no accident that the correlation be tween a state’s per capita income and the percentage of college graduates who live in that state is very strong. Mississippi, with a per capita income below $30,000, has a population in which fewer than 25% have earned a bachelor’s degree. In Connecticut, where per capita income is highest, the rate of college-educated citizens is above 35%. Michigan is in the middle of the pack, with less than $35,000 in per capita income and less than 30% of its citizens boasting 4-year degrees.
Michigan will need money to reclaim a competitive advantage. A revamped tax structure that halts the erosion of funding for K-12 and higher education has to be a priority. So does a plan to spend money on the things that matter in education — instruction, curriculum, connections with real-world workplaces — rather than administrative costs and overly generous benefits and pensions for employees.
Michigan will also need leadership focused intently on defining and maintaining standards, and dedicated to making the political sacrifices to keep funding healthy. The governor and the Legislature must work together to build a work force that won’t be as susceptible to single industry collapses. And Michiganders themselves must commit to the value of primary and secondary education, as well as lifelong learning.
Lorenzo Byrd, the former Ford worker in “Rising from the Wreckage,” had the right idea. When he lost work because of the economic downturn, he turned to more education as the way forward.
When things bounce back, he’ll be better positioned than others to take advantage.
Michigan has to become a state of Byrds, dedicated to a life whose only guarantees are predicated on a simple motto: Education first, last and always.
Jobs shake-up slams black middle class
But many say change is a chance to fix schools
From 1910 into the 1930s, the black population of Detroit rose more than 600% — double the rate of nearby Cleveland and four times faster than the in crease in Chicago. Nobody was moving here for the weather. The influx of people to Detroit — the city tripled in size during the same period to a population of about 1.5 million— was about jobs, mainly in the auto industry, after Henry Ford made his famous offer of $5 a day.
Among the many side effects of the assembly line was the rise of the American middle class and, in Detroit more than anywhere else, the creation of a black middle class. While segregation and racism were obstacles, Detroit became a place where good factory wages enabled African Americans to afford homes and cars; where black businesses could start up with ready customers and where succeeding generations had a measure of upward mobility.
Hundreds of African-American professionals, businesspeople and academics owe their start to parents or grandparents who were able to make a decent living in Michigan’s auto plants.
That avenue to the proverbial American dream has now been largely closed off by the disap pearance of job opportunities at General Motors, Ford and Chrysler and the many industry supplier firms.
“What is happening now to the black middle class is absolutely devastating,” said Dr. Curtis Iv ery, chancellor of Wayne County Community College District. “But it is also much needed. We needed to come out of our comfort zone, that sense of entitlement to those jobs.”
Ivery and others said this massive economic shake-up should be a wake-up call for Detroit and indeed all Michigan to fix its schools and redirect young people toward higher education.
“The old paradigm was graduate from high school and get a good job,” said Daniel Baxter, director of elections for the City of Detroit and the son of an assembly line worker. “Now, it’s totally different. We have to shift the thought process, recognize the new dynamic.”
Juliette Okotie-Eboh, senior vice president of public affairs for MGM Grand Detroit and the daughter of a Ford worker, recalled a time in the 1960s when the best-dressed among her class mates at Detroit Northern High School were the young men who had second-shift auto jobs.
“They had the cars, they had the clothes,” she said. “The point is, I guess, they didn’t need the education at that time to make the good money. But those doors have been closed for a while. Are blacks disproportionately affected? We’re always disproportionately affected. … But the lack of opportunity is more acute now.”
Michael Porter, vice president for corporate communications at DTE Energy, is the son of an auto worker. His mother started out as a stenographer but worked her way up to computer systems analyst at the Army’s Tank Automotive Command plant.
“I was exceedingly fortunate,” Porter said. “My parents placed a high premium on education and sacrificed — sending us to parochial schools to help prepare for college. … But for those who couldn’t or didn’t want to go to college, the plants were a viable option.
“Today, those manufacturing jobs are gone. … And even if the auto companies had the market share they enjoyed in the 1960s, the jobs our parents held would be gone. … Today, computers and robots do many of the things that were formerly done by men and women with air wrenches and paint spray guns.”
Hence the critical need, said Porter, Ivery and others, to address the ills of predominantly African-American school districts and the widespread applause for Robert Bobb, the emergency financial manager of the Detroit Public Schools, who’s becoming a local folk hero as he reshapes the district with an emphasis on accountability. Bobb’s trying to make changes that are at least a generation beyond overdue.
“The school systems have got to do a much better job now of meeting the needs of these stu dents,” said Bart Landry, a pro fessor of sociology at the University of Maryland and author of a 1987 book, “The New Black Middle Class,” plus a 2006 follow-up, “Black Working Wives.”
“But first, students have to understand, the good dollars-for hours jobs are gone. ‘If I’m going to make it, I must go to college’ … and if they don’t get into precollege work, that road is extremely difficult.”
At WCCCD, which now has upward of 80,000 people taking credit and noncredit courses, Chancellor Ivery is more blunt about the impact of all the closed factories in southeast Michigan.
“Unfortunately, we’re exactly where we need to be, and it’s a painful thing,” he said. “But we’ve got to get something out of this.
There’s an opportunity if we take it over the next one or two years.
And if we get it right here, we can get it right for the whole country.
“We have a chance,” Ivery said, “to … turn this around.”
RISING FROM THE WRECKAGE: REVVING UP MICHIGAN
Back to the beginning: Innovate
We have lost sight of where it began. It is not about jobs, wages and benefits. It is all about productivity and a culture of innovation.
How can you compete against a Chinese worker making 50 cents an hour? You beat him with machines, automation and robotics. One man running multiple machines can produce more parts faster and of higher quality than any cheap labor can. By using more robotic and automated systems, the overseas shipping costs would be eliminated and the time to delivery would be faster. We have focused too long on attempting to save jobs and benefits rather than increasing productivity, which would expand sales through lower prices and thus create more jobs.
Once, Detroit and Michigan were the epicenter of innovation. We knew how to build and improve on every process of automotive manufacturing and all its components. The culture of innovation and inspiration needs to be restored and rewarded to awaken the deep manufacturing capabilities that Michigan still has.
Look back at the late ’70s, in the midst of a recession similar to today’s, and no one would have believed that a giant computer industry was about to be born. But there were precursors in the form of microprocessors that the innovative entrepreneurs could see. Those precursors today are in the form of sensors, tiny microcontrollers, software and advanced machining that Michigan possesses. All together they will build a new robotics industry. Michigan can lead it.
Spend in Michigan
We all are responsible (“Rising from the wreckage: A story of survival,” Dec. 13-20). Instead of finding people to blame, this is what we all can do: Go to a car dealer and ask them what cars they sell that are manufactured in Michigan. Drive them.
Go to buymichigannow.com and search products that are made in Michigan. Stop buying items that are made in foreign countries — food, clothing and transportation. We can’t do any thing about what our predeces sors have done, but we can do something about what we buy.
Oh, and all those Christmas items you bought online? Write a check to the State of Michigan for the sales tax.
More wrecks ahead
What happened to the U.S. auto industry, which the Free Press calls “creator of the middle class and home of labor victories that set a standard for generations of American workers”? Just look at the standard of lifetime pensions and health care, promised when health care costs were low, which is now suffocating American automotive companies. Now, how can any company with hundreds of thousands of paid retirees with “Cadillac benefits” survive? Unfortunately, what has happened to GM, Ford and Chrysler is now suffocating cities and states and the country.
Then tell me who believes that the new “health care reforms” of the Congress will actually reduce health care costs of companies, their workers, or their retirees?
Tragically, I don’t think we’ve seen the last of this wreckage.
State can tough it out
I left Michigan four years ago, not for economic reasons, but just to try something new.
I don’t think that this crisis is the end for Michigan’s staple industry. Just look at the layout of America. It’s still fairly spread out. However, the type of car that Americans are looking for has changed drastically. Gone are the excessive days of the late ’90s when SUVs were all the rage.
The rise and fall of oil prices was quick and sharp, far too fast for auto producers to adequately respond. Then, there was the financial crash in September 2008, which made everything more complicated. But at the end of the day, the majority of Americans are still commuting to work by car.
The uncertainty of change is undoubtedly scary, but there are so many talented professionals (especially in engineering) in Michigan that I trust that creative solutions will be found for the auto industry and in the de velopment of other new businesses in the state. Michiganders are just too practical and hard working a people to give up in the face of crisis.
New York City
Where to start
We have to be mindful that Michigan’s leadership as the reigning capital of the automotive industry, once the driving force of this country and the world, is indeed “gone with the wind.” It is especially difficult since Michigan was the cradle of its beginning and will probably never rise to this leadership status again.
In this technical age, in order to compete with the world’s changes, we must prepare ourselves to meet and understand this challenge in order to sustain meaningful jobs and a living. It must start with the education of both children and adults, where we have fallen short.
As far as the basic need of jobs for our future success, we must continue to support entrepreneurs and serious development of our wonderful water’s potential for greatness. It will not be easy, but I hope that — with God’s help and understanding — we can develop and maintain the belief and tolerance in one another’s self worth. That would be a wonderful start!
A new business
After retiring from more than 40 years in the film and media business in the Detroit area, the rash of media stories about the growth of a vibrant “new” industry, employing hundreds if not thousands of unemployed workers has been viewed by me with a certain amount of amusement.
But after reading your article about Vanir Entertainment, I feel a sense of hope for the future (“Former autoworker is going green,” Dec. 16). It appears that Lewis Smith and Alex Greene have a realistic grasp on what it takes to make a successful busi ness as well as a new industry.
Starting small with a lot of dedication and hard work, as well as taking a gamble financially, will probably make them successful entrepreneurs. At least I hope so, and I wish them well.
Diversify — and learn
The lesson for Michigan and the Detroit area in particular, is to diversify. Never again must we rely on one industry to sustain us. I think that the introduction of the movie industry to Michigan is a good step. There will always be a need for motion pictures, and the jobs that come with it.
We must also step back into the past. Technological and green jobs might be the new momentum, but we have a population that is heavy in blue-collar experience. There will soon be an acute demand for plumbers, carpenters, electricians and welders. Apprenticeships in what were once restricted guilds must open up.
Illiteracy is not just a problem in Detroit Public Schools. People who grew up during the 1980s up until now, especially males, preferred video games to reading a good book, or — as you know too well — a daily newspaper. We must bring back the desire to read and learn.
We must also make Michigan more appealing for businesses to move here. We must change the negative images of Detroit.
We can do it. We can come back, but only if there is a will to do so and the willingness on be half of everyone to sacrifice.
Naomi Susan Solomons
I realize that the abysmal rhetoric about dealers you printed, while terribly inaccu rate, is most likely from dealers themselves. Unfortunately, the dealers who have survived have turned into pirates, wooing em ployees and working behind the scenes to sabotage any dealer rights legislation.
My husband, a GM dealer who got a “surprise” wind-down letter on June 2 — two weeks after the massive cut — has had his fellow dealers call employees at home, offering them signing bonuses and assuring them that life will be better at their new place of employment. Other dealers were privy to the lists of dealers being cut and shared that with their employees. We first heard about our dealership’s cut when an employee from another dealership told one of our salespeople.
As the industry declines, so does human decency. As much as I hate what GM and Chrysler did, they were doing their jobs. The surviving dealers, who prey on those who are losing, are greed riddled vultures.
Grosse Pointe Farms
Being a GM retiree of 31 years from the Hydromatic plant, I can assure you the ups and downs I experienced over my years as an employee are something I’ll nev er forget, from the oil embargo times in the early ’70s to now. I still lose sleep worrying about my future and if the company I gave my life to is going to stand behind
It’s hard to show loyalty to a company that has no clear bearing, and seeing the face of the skipper change almost monthly doesn’t make me warm and cozy in any way. I know I’m a lot bet ter off than most people nowadays, and, believe me, I’m grateful for that.
But I think it’s time for Gener al Motors to point in one direction and keep on that path, if not for the workers that make it a strong company now, then for the people who gave years to make them profitable and respected.
Henry Ford’s lesson
It has been the policy of many state governments to provide our foreign competition what can be considered tax welfare to locate assembly plants mainly in the anti-union South. These tax breaks, along with the inherent cost advantages of having no significant legacy expenses, have created huge capital advantages for the foreign companies. What did we expect from 100-year-old companies such as Ford and GM, but to eventually mortgage the farm or go bankrupt in the face of such an unlevel playing field?
Secondly, the American consumer needs to be educated on the importance of buying domestic automobiles.
To illustrate the lack of appreciation for the domestic industry, all one has to do is to drive around the country. Other than the Midwest, it appears the American consumer prefers foreign cars over domestic cars.
This shift to foreign cars has eliminated over 50% of the manufacturing infrastructure in the Midwest. Because the auto sector has an extremely large economic multiplier, affecting direct, in direct and spin-off employment, the unintended consequences of this shift has resulted in huge unemployment numbers, decline in property values and taxes at every level.
Government should level the field for fair competition and keep in mind our national interest.
Educated consumers will ultimately do what is in their own best interest.
The car companies should remember that Henry Ford changed the world in two unforgettable ways. He built an affordable car efficiently and he paid a wage that enabled his workers to buy their own products right here in America!
Get a license
I have wanted an electric car since I had the opportunity during the ’40s to drive electric milk delivery trucks, which were as quiet as elevators. So I bought a 2001 Prius, then a 2005, and I already have a deposit on a 2011 plug-in model.
During 2001, I immediately recognized the Prius technology as transformative and essential to our U.S. product mix. In my judgment, all of our auto compa nies should have licensed this technology immediately. If the Japanese balked, we would have been justified in excluding their vehicles from the U.S. market.
Did anyone at our auto companies ever explore such licensing?
It would have been a steal even if we had paid Toyota $1,000 per vehicle.
Future is electric
Whether you are opposed to fighting global warming because of your religious beliefs, your political hatred of anything tagged as “progressive,” or because you are not willing to accept the science, there is still a large benefit to Michigan should federal climate change legislation be signed into law. Electric cars are the future of automotive manufacturing, and nobody builds them better than us — even if you don’t think they are necessary.