Changing Gears is a public media project about the future of the industrial Midwest. Each week, reporters Dan Bobkoff in Cleveland, Niala Boodhoo in Chicago and Kate Davidson in Ann Arbor cover issues of interest to the Great Lakes region. Changing Gears also sponsors public events and conversations.
Publicus Tacitus, the Roman senator, is given credit for coining the phrase, “Success has many fathers, but failure is an orphan.” He’d feel right at home during the Michigan Republican primary campaign.
Over the past few weeks, candidates, their opponents and those who played a role have been debating just who should get credit for the auto industry bailout.
UAW President Bob King referred last week to a “new movement for social justice” this spring, and now we know what he’s talking about. The UAW’s Facebook page on Thursday features a big photo promoting the 99% Spring, sending its readers to a new Web site called The99Spring.com.
The site speaks directly to the protests that took place in Wisconsin over Gov. Scott Walker’s push to eliminate collective bargaining rights for public employees. There’s a letter from its organizers, who include King, as well as a variety of union, political and other groups.
Declares the site, “In the tradition of our forefathers and foremothers and inspired by today’s brave heroes in Occupy Wall Street and Madison, Wisconsin, we will prepare ourselves for sustained non-violent direct action.”
LIVONIA, Mich. – When Chrysler CEO Sergio Marchionne made his disdain for a two-tier wage system known at the conclusion of UAW contract negotiations in October, his comments weren’t so much parting shots as they were a preview of coming attractions.
The viability of the two-tier wage structure will be a defining issue of the next round of labor negotiations.
“What has to be decided in 2015 is, ‘Where are you going with the second tier,” said Art Schwartz, president of Labor & Economics Associates and a former lead labor negotiator for General Motors. “Where’s this going to lead eventually? That’s the big issue.”
Several analysts at a conference hosted Tuesday by the Center for Automotive Research predicted caps on the number of second-tier employees will gradually be raised, and that an intermediate wage rate between the two rates could be negotiated.
FLINT — There may be no better example of how the industrial Midwest is changing than the site of the old Fisher Body Plant No. 1 in Flint, Michigan. It was one of the factories sit-down strikers occupied in the 1930s. The plant made tanks during World War II. It was later closed, gutted and reborn as a GM design center. But GM abandoned the site after bankruptcy and the new occupants don’t make cars. They sell very expensive prescription drugs. [display_podcast]
There’s one group of experts who can always tell you the history and significance of an old factory. They’re the guys at the bar across the street.
Dan Wright is still a regular at The Caboose Lounge. He worked at Fisher Body No. 1 briefly in the 1970s.
LIVONIA, Mich. – A recovering U.S. auto industry should add more than 150,000 new jobs by 2015, and most of them will be located in hard-hit Michigan.
Analysts from the Center for Automotive Research in Ann Arbor said Tuesday that gains sales and market share, as well as savings reaped from recently concluded UAW contract negotiations, will allow Detroit’s automakers to expand their workforces. The Big Three are projected to add approximately 30,000 new jobs over the next three years.
But that’s a relatively small share of the overall projected industry growth. Suppliers are expected to account for the bulk of the increase across the country. Estimates say the auto industry employs 590,000 today and will employ 756,800 in 2015, a 28.2 percent increase. That year, sales of light vehicles are expected to hit 15.5 million units.
“They’re going to grow,” said Kristin Dziczek, assistant research director at CAR. “They’re going to have to.”
Managing that growth is trickier than it may appear. Automakers are fearful that suppliers have promised more capacity than they can actually deliver as demand grows. Many suppliers have been reluctant to ratchet up operations in case the boom never arrives.
Years ago, General Motors boasted that Saturn was “a different kind of car company.”
Now, the Spring Hill, Tenn. facility that once made the now-discontinued Saturn is becoming a different kind of assembly plant.
As part of a four-year contract agreement with the United Auto Workers, General Motors will re-open the shuttered assembly side of the plant next year. On Monday, the company announced nearly 700 workers will be hired in 2012 and nearly 2,000 will be added by 2015.
When they arrive, they’ll find an assembly plant unlike any other in the country. GM is trying what Forbes calls “an innovative manufacturing concept” at the facility. Rather than produce one or two models, Spring Hill will function as a flex plant that produces vehicles in high demand, serving as an overflow catch-all of sorts.
The flexible nature of the plant was conceived after General Motors’ production could not keep up with sudden customer demand for the Chevrolet Equinox last year. Sales of the model rose 18 percent year over year, and production was ramped up three different times since 2009. GM said it will spend $61 million preparing Spring Hill to build the Equinox, a crossover model that has been Canadian-built in the past, according to Forbes.
Rick Perry’s stumble in Wednesday night’s Republican presidential candidates debate caught a lot of attention inside the Beltway. But Mitt Romney’s characterization of the auto bailout has also touched nerves — especially because parts of it seem to be wrong.
Romney’s opposition to the bailout is well-known, and in fact, Republican candidates by and large think it was a bad idea.
Asked about the auto bailout during a discussion of the economy last night, Romney said, “Whether it was by President Bush or President Obama, it was the wrong way to go.”
He went on, “We have capital markets. It works in the U.S.”
In reality, banks had refused to provide Chrysler and General Motors with the kind of financing the companies would have needed to restructure. Congress also refused to approve a bailout package. That was why the government stepped in to finance and speed the companies through Chapter 11.
Three stories making news across the Midwest today:
1. Will two tiers vanish from auto contracts? One contentions round of contract negotiations just ended, Chrysler CEO Sergio Marchionne is already making bold predictions about what’s ahead when the current four-year contract ends. He said today that the automakers’ two-tier pay structure is not a viable one, and Chrysler and the UAW must find a way to merge two classes of workers next time. The structure is, “not something that can go on for a long period of time,” he said on a conference call to discuss the company’s second-quarter earnings. Marchionne continued, saying, two-tiers is “not a viable structure on which to build our industrial footprint.” Last month, Changing Gears reporter Kate Davidson examined the two-tiered wage structure and reported on its impact upon automakers and their workers.
2. Is Indianapolis jobs pledge a hoax? Only two short days ago, Indiana Gov. Mitch Daniels and Indianapolis Mayor Greg Ballard welcomed a California entrepreneur whose company would bring 1,100 jobs to the city. Two days later, there’s growing worry the company, Litebox Inc., and its owner Bob Yanagihara aren’t for real. The Indianapolis Star reviewed public documents that show Yanagihara owes “hundreds of thousands of dollars in state and federal tax liens” from the past decade, as well as money to investors who have sued him – and won. “I would strongly advise anyone thinking of investing in his projects to think twice,” Colin McGrath, who is owed $145,000, tells the newspaper.
3. Whirlpool will lay off 5,000 workers. Appliance manufacturer Whirlpool said Friday that it would eliminate 5,000 jobs across North America and Europe. The Benton Harbor, Mich.-based company cut its earnings forecast. Whirlpool CEO Jeff Fettig said the cuts came amid weak demand and higher costs. The cuts include 1,200 salaried positions, and company officials said overall, the layoffs will save approximately $400 million. There was no immediate breakdown of how the cuts would affect Whirlpool’s Michigan workforce.