When I was back in college they had on campus interviewing. At the time in the very late 80’s we were in a midst of a recession and I was pretty open to talking to virtually any company.
I received a call from a recruiter and he started talking to me about an opportunity with Ryder trucking. Then he said something that I’ll never forget
“It’s in Detroit and don’t hang up”
The words ran together very closely and with urgency so it is obvious that this was a common problem, even then – as soon as people even heard the word “Detroit” they simply hung up the phone as a non-starter. I didn’t hang up on the guy (I was too polite back then) but I certainly viewed it as some sort of last ditch, about-to-be-homeless type of opportunity.
I have since worked near Detroit (in the vast suburbs) and I don’t want to slam the place based on stereotypes. The suburbs are very nice and the whole area seems to function OK – you might go into the city proper for a sporting event (which has security) but that’s about it.
This Wall Street Journal article reminded me of that time with the recruiter as it describes how white collar employees, often managers with years of experience in fields like marketing and technology, are finding themselves being laid off from the auto makers and related industries in Michigan. I’m sure that many, if not most, are hard working people just trying to do their best in a difficult situation. Since the housing market in Detroit has pretty much collapsed as well, people can’t sell their houses (except at a huge loss), and it isn’t obvious where they’d go, so they are just remaining in the state and are trying to make ends meet however they can. One former manager that they profile is now a janitor.
However, the part that the article doesn’t touch on, is the fact that Michigan is an incredibly hostile place to do business and there aren’t going to be “new” industries that are going to crop up to give these experienced employees new opportunities. Let’s look at it from the potential entrepreneur’s perspective – do you want to locate in a state with 1) high taxes 2) a very highly unionized, political work force 3) frankly not so great weather 4) a completely dysfunctional, if not ruined, major city in Detroit?
They are going to lose out on new business to states with better weather, a better tax balance, no or limited unions, and frankly a more pro-business culture. That isn’t the Detroit area, that’s for sure.
With no renewal possibility, and likely even more activist government and harsher taxes as their remaining asset base (autos) winds down, the future looks utterly bleak. Nothing new is coming in of any substance, and they can watch Texas (and Florida, Arizona and Nevada, once they get over the housing bust) boom and just wonder why.
Cross posted at LITGM
You can drive from northern New Jersey, north up I-95 and I-93, with excursion up the Hudson and Connecticut valley all the way into Maine, even north of Bangor and then sweep west, though Pennsilvania, Ohio and along the Lakes to Chicago and there are hundreds of cities that have gone from productive, profitable centers to now tax money sucking urban camps/safety restricted zones for breeding Democrat voters and supplying necessary crops/bodies to fill the production lines of the poverty industries and provide work for the union/government employees and associated private rent seeking contractors of buildings like rumored schools, low grade prisons called public housing and higher grade classical prisons. Also buildings, staff, for the modern state administration mandarins like psychologists, judges, internal quality control( defense lawyers ) and such.
Too bad there is no real exportible value in any of this production. Maybe we can sister city with some North Korean/Cuban socialist pardises. Maybe start some Robert Mugabe/Charles Rangel Schools of Finance.
Anyways, you can move anywhere you want, but you can not hide from the modern federal welfare state. It will just tax you where ever you live, or dump debts onto your children.
Our industry got moved to China and our white collar jobs to India. That was not caused by the Democrats! Our cities are a mess, granted, but the notion that the Democrats (“socialists”) are responsible is just plain silly. Example: Did the unions tell Nike to have its 200 buck shoes made for 30 dollars a pair by underage girls in Indonesia? Nah. Falsely placing blame will change nothing but further split the nation when it needs to find viable solutions.
ps: do you drive American car? why?
Obama can sell UAW cars the same way he sells Obamacare. Mandates. Simply fine people who refuse to buy UAW made cars – same size fine 80% of the value of the sale. We owe it to the UAW to help save thier jobs and raise their pay so that they can make at least a living wage
michigan should revert to a feudal system.
Anonymous — technology changes, businesses change, jobs disappear, and new jobs are created somewhere. The question is, where do those newly-created jobs emerge? I watched several waves of high-tech startups grow in Ann Arbor in the 70s and 80s, and every time they approached critical mass to form an entrepreneurial cluster, they would all move out of state. Usually their VC funders would tell them they were nuts to stay in Michigan with its adverse business climate. The taxpayers of Michigan paid out big bucks for decades to run good school systems (well, Detroit’s was expensive but terrible) and good universities, basically to subsidize workforce training for other, more rational states.
I met a guy earlier this summer who owns a cement manufacturing company in Michigan north of Detroit. He said his county was once home to lots of little Machine shops that were started by ex-auto workers who wanted to be close to their summer houses, but were still dependent on the auto industry. In late May, he told me unemployment had reached 25% in his county. The school announced an opening for a janitorial positions and received 300 applicants, including a lot of college grads.
Ironically, his business was doing well (he had two new patented products with an international market). I thought of him when I read that Michigan state politicians were contemplating a law to increase minimum wage, raise business taxes, etc. This gentleman was already working with a plant in North Carolina and with his youngest child moving out of the house, I’m not sure what was keeping him in Michigan. Somehow, I doubt he will stay if that self-destructive legislation gets passed.
It’s a beautiful state, but it is just broken economically and politically.
Did the unions tell Nike to have its 200 buck shoes made for 30 dollars a pair by underage girls in Indonesia?
This is not the week to trumpet the claim, “hey, leftist organizations sure know how to treat underage foreign girls.”
One of my friends said something today that I have long thought likely: “Detroit and Chicago are just two points on the same continuum.”
Once Daley, for all his faults, is gone, we will get someone here of the moral and intellectual caliber of Todd Stroger in the Mayor’s office. I see no other likely outcome.
When that happens, this place will fall apart quickly.
“It’s in Chicago and don’t hang up.”
Anyone who is sane that wants to open a factory looks at places like Michigan last. I will admit that many of the small towns on the southwest coast right on Lake Michigan are doing pretty well, at least when I am there in the summer for the tourist season. I can’t think of any other industry that Michigan will be able to do well in anytime in the future.
I read a grim description of Detriot as “a crater that people live around.” Apparently, some of the suburbs are doing fairly well but they make it a point not to interact economically as little as possible with the life-draining city of Detroit. It is amazing how quickly racist socialism (is there really any other kind?) can suck the life out of place. If whites ran Detroit and inflicted such suffering on the people there, we would never hear the end of it.
Anonymous,
Our industry got moved to China and our white collar jobs to India.
No, your industry got moved outside the rustbelt to south and southwest. Today, something like 70% of bodies of foreign branded cars are made in the U.S. Meanwhile, American branded cars are at least 30% foreign made. What has happened has been a shift in manufacturing centers away from the rustbelt states to other states. Why? Because in the rustbelt states, job-makers are treated as little better than criminals whose sole purpose in life is to produce ever increasing pay, benefits and taxes for ever decreasing levels of productivity and government services.
Texas business is booming to the extent that Texas is no America’s largest exporter of manufactured goods. Not bad for a place that 40 years ago was oil derricks, longhorn cattle and tumbleweeds.
You made three mistakes:
(1) You adopted a basically a socialist mindset that said that job-makers where vile people without rights who could be morally exploited at the whim of others (that may sound harsh but thats what you political culture boils down to.)
(2) You failed to recognize that America’s industrial dominance in the period of 1945-1965 was just a freak event caused by WWII. You based your economic, political and social expectations on an abnormal and unsustainable lack of competition from the industrial basis that were destroyed in WWII.
(3) All industries age and as they do so their profit margins shrink. An industry that easily supports a middle-class lifestyle in one generation supports only a working class lifestyle in the next and supports nothing but poverty in the third. You stupidly hitched your wagon to old industries, kept them from improving productivity and then made your business environment so hostile that no one would consider starting a new industry in the area.
Oh, yeah…
(4) Instead of waking up taking charge of your own lives you bitch and whine incessantly about how your problems are the fault of everyone but yourselves. It’s just as nauseating when groups of people do it as when you have to listen to your idiot cousin do it.
Grow up, change and adapt instead of trying to recreate a by gone golden era with the force of the state.
“Our industry got moved to China and our white collar jobs to India.
They didn’t ‘got moved’. They fled, pushed, chased.
” That was not caused by the Democrats! “
Those dang Libertarians again!
“Our cities are a mess, granted, but the notion that the Democrats (”socialists”) are responsible is just plain silly.”
‘Taint no buddy there but Democrats, Democrat unions and Democrat voters. What, do white shoe, whale patterned Sans-a-belt wearing Republicans come in at mid-night to ruin things?
The Michigan govt should run TV ads extolling Michigan’s business climate. That would solve the problem.
My daughter finished the FBI Academy in the last class of the fiscal year so she ended up assigned to Detroit. I told her, “Cheer up. There’ll be lots of crime for you to work on.” She had to wait almost ten years to get transferred because the SAC could not find anyone to replace her. He retired and she got her transfer approved before the new guy figured out the situation. She lived in one of the nice suburbs and would have been happy if she hadn’t had to drive into Detroit every day to work.
She did have some interesting experiences. LIke seeing a drive-by shooting while staked out on a drug dealer’s house. They had to make a quick decision whether to blow their cover and chase the shooter. They did.
“You failed to recognize that America’s industrial dominance in the period of 1945-1965 was just a freak event caused by WWII. You based your economic, political and social expectations on an abnormal and unsustainable lack of competition from the industrial basis that were destroyed in WWII.” (Shannon Love)
This is the point I constantly try to make clear to people. I too live in a rust-belt city and people here are still waiting for “the manufacturing jobs to come back.” The elders talk of times when “you could quit your job at lunch and be hired again by dinner at union wages.”
I’m sure these days were good. Watching “Mad Men” makes one realize that the early sixties may have been the height of civilization? But these days are over. The great fifties, sixties, and early seventies can be Atlantis for all that matters now? Now its back to what life has always been (except for those golden 2 1/2 decades); and that’s struggle.
There’s no more pensions, security, or gold watches. Ideology will give way to community, which will be our security, medicare, pensions, and identity.
The only ideology that will matter in the future will be “is it good for the ________(fill in the blank)?”
Seerov
All those cites grew from nothing. They attracted people from all over the world. There was little Federal or even State support. Basically they created their own wealth amongst themselves.
The WWII era bloom was toxic in that the idea became that wealth and growth came from Federal checks. Well the war wound down, and the checks to the factories stopped. Checks next came like manna to people that didn’t, wouldn’t or couldn’t work. Good steady Union jobs are still to be had. Welfare administration, VA, Union cops, firemen, teachers. Those are the industries of the future. A nice closed circle of welfare breeders, producing certified dysfunctional adults who can vote for more funds for the admin/security/babysitting staff.
For now. Washington is printing ink smeared promise notes as fast as it can. The value since 1913 had decreased 95 percent. It is losing value every day. Further Washington has never been so hated. And hated by taxpayers, who bear a burden of near 50% taxation, for as long as they toil. And, for what?
We got some bad political, financial, economic and popular trend lines converging.
Seerov…I’ve never been convinced by the idea that our success was caused by absence of global competition and our problems are caused by it. Internationally, competitors are also trading partners. If, for example, all components of a personal computer had to be produced entirely domestically..and all support had to be domestic as well…they’d be considerably more expensive, to the point that relatively few people could afford one, and the American software & computer services businesses would be a lot smaller.
I think our problems are more self-inflicted.
David Foster,
I’ve never been convinced by the idea that our success was caused by absence of global competition and our problems are caused by it.
Our general success is not caused by the absence of global competition. After all, America was very successful prior to both WWI and WWII when we faced stiff competition from European industrial production.
However, the post-WWII void of competitors allowed the industrial northeast to extract rents (in the economic sense of the term) from their markets. The economic and behavioral effects were the same as would occur in an explicit state granted monopoly or cartel. This went on for 20-30 years which was time for the profits from the rents for the companies, workers and the government to come to be viewed a normal and natural. When the rents went away, they could never adapt.
Now, nearly 40 years after that freakish golden era ended, people still try to recreate it by using the force of the state to block competition so they can extract rents from the rest of the American population.
From anonymous:
“Our industry got moved to China and our white collar jobs to India.”
Actually, your industry got moved to Canada and elsewhere in the US, to states with right-to-work laws. And yes, you can blame that on the unions and their Democrat lapdogs.
“ps: do you drive American car? why?”
Depends. I drive a Honda Civic Si. It’s made in Allison, Ontario; other Civics are made in East Liberty, Ohio. We also have a Toyota Sienna, made in Princeton, Indiana. So I guess I drive a foreign car, while my better half drives an American car.
Also, what’s the obsession on the left with underage foreign girls?
What Shannon said. Nothing is forever. The industry was born, grew up, aged, and died. Not that unusual or difficult to see coming.
Steve,
The industry was born, grew up, aged, and died. Not that unusual or difficult to see coming.
The problem is, they didn’t cultivate an environment in which new businesses could be born. That was not always the case. The great lake “rustbelt” states where our industrial heartland for over a century. They saw a lot of businesses come and go but they always succeeded in generating new ones until the rise of soft-socialism in the wake of the Great Depression and WWII.
Rather than cultivate a climate where new business could flourish, they (the Democrats and unions)taxed and struck business out of existence. I watched Baltimore die, and it was a sad, sad thing.
Cjm said, “michigan should revert to a feudal system.”
It seems that its journey down that road is more than begun.
I came across this blog site and wanted to add my two cents worth. I actually posted this on Amazon.com in relation to comments poorly made by Thomas Friedman, author.
In Dbusiness,(Detroit business magazine) March/April 2009 issue, on the cover is a letter to President Obama. The title is $60 trillion. Let me put this in numbers, 60,000,000,000,000 dollars. Yes that’s a 6 followed by 13 zeros.
What does $60 trillion mean? The article states that is what the American auto industry has contributed to the national economy since 1900. Yes, in today’s dollars that is what the American auto industry has given to our country.
There is no one alive in this country that was born without the automobile as a fact of American life. Though our oldest citizens, including my dad, can remember the horse led trucks that came through city streets of Detroit bringing ice, and other commodities to people’s homes.
But the innovations that American car companies, such as Hudson Motors, Continental Motors, my dad worked at both, and other car companies including the Big Three, have contributed, assembly lines – the biggie, Model T which made the automobile affordable to many Americans thus reshaping their life forever, Eagle Boats for the U.S. Navy in 1917 for the U.S.’s pivotal role in this World War, Drive-In restaurants, drive-in theaters, Motels, Ford Airlines in 1926 so that the U.S. Government could have domestic airmail, shatter-resistant safety glass, Supermarkets starting in 1930, the General-Purpose vehicle in WWII – nicknamed the Jeep by GI’s, armaments, Apollo 11’s guidance and navigation system thanks to GM in 1969 as well as the Lunar Roving Vehicle for NASA and Apollo 15, Airbags, application of computers in 1978, built-in child safety seats in 1992, and during the 2000’s the industry got serious about fuel economy and alternative cars with hybrids and flex fuels.
I also went on to say I agreed with much of what Mr. Friedman says, and AMEN to Google. It even is in Michigan.
But having lived in three states, one of course being Michigan, (I grew up in this state but lived outside of it for seven years) I have experienced the economies of manufacturing and service sector states. I agree that much of what Michigan has done, is old, rust-belt technology. But we can’t drive to our favorite destinations on Iphones, Ipods, and Netbooks. As great and cool as our newest technology gadgets are, we still need the dirty, mechanical machines that have survived into it’s third century. I have lived in this state to know that the machines and the people behind the machines can be a part of this turn-around. They enjoy the oily, dirty mechanical methods they have learned handed down from my parents, my grand-parents and even my great-grandparents. This region in Michigan is still home to 25% of the machinery that this country needs to keeps it’s mechanical infrastructure running.
To make my point, ‘perfectly clear’ I saw the foreclosures in I came across this blog site and wanted to add my two cents worth. I actually posted this on Amazon.com in relation to comments poorly made by Thomas Friedman, author.
In Dbusiness,(Detroit business magazine) March/April 2009 issue, on the cover is a letter to President Obama. The title is $60 trillion. Let me put this in numbers, 60,000,000,000,000 dollars. Yes that’s a 6 followed by 13 zeros.
What does $60 trillion mean? The article states that is what the American auto industry has contributed to the national economy since 1900. Yes, in today’s dollars that is what the American auto industry has given to our country.
There is no one alive in this country that was born without the automobile as a fact of American life. Though our oldest citizens, including my dad, can remember the horse led trucks that came through city streets of Detroit bringing ice, and other commodities to people’s homes.
But the innovations that American car companies, such as Hudson Motors, Continental Motors, my dad worked at both, and other car companies including the Big Three, have contributed, assembly lines – the biggie, Model T which made the automobile affordable to many Americans thus reshaping their life forever, Eagle Boats for the U.S. Navy in 1917 for the U.S.’s pivotal role in this World War, Drive-In restaurants, drive-in theaters, Motels, Ford Airlines in 1926 so that the U.S. Government could have domestic airmail, shatter-resistant safety glass, Supermarkets starting in 1930, the General-Purpose vehicle in WWII – nicknamed the Jeep by GI’s, armaments, Apollo 11’s guidance and navigation system thanks to GM in 1969 as well as the Lunar Roving Vehicle for NASA and Apollo 15, Airbags, application of computers in 1978, built-in child safety seats in 1992, and during the 2000’s the industry got serious about fuel economy and alternative cars with hybrids and flex fuels.
I also went on to say I agreed with much of what Mr. Friedman says, and AMEN to Google. It even is in Michigan.
But having lived in three states, one of course being Michigan, (I grew up in this state but lived outside of it for seven years) I have experienced the economies of manufacturing and service sector states. I agree that much of what Michigan has done, is old, rust-belt technology. But we can’t drive to our favorite destinations on Iphones, Ipods, and Netbooks. As great and cool as our newest technology gadgets are, we still need the dirty, mechanical machines that have survived into it’s third century. I have lived in this state to know that the machines and the people behind the machines can be a part of this turn-around. They enjoy the oily, dirty mechanical methods they have learned handed down from my parents, my grand-parents and even my great-grandparents. This region in Michigan is still home to 25% of the machinery that this country needs to keeps it’s mechanical infrastructure running.
To make my point, ‘perfectly clear’ I saw the foreclosures in Sausilito, the wealthiest suburb of San Franciso three years ago. It isn’t therefore surprising that California has joined Arizona, and Florida in an economic downturn. I truly don’t believe this country will survive economically if Michigan, along with its neighboring industrial states of Indiana, Ohio and Ontario, Canada to sink.
Then the mechanical energy needed to make the electrical energy needed to run the chemical and electronic circuits in your Blackberies, Pres and Iphones won’t be there.
Maybe that is why Robert Redford, Bill Cosby, Jay Leno and other celebrities are willing to advertise Michigan as a great place to do business.
Hi-Tech business and you won’t find a more beautiful state in the Midwest than Michigan!
My post of a couple of days ago has some of the paragraphs repeated and I apoligize for that. I won’t re-enter the parts that somehow were inserted twice, unless requested.
Bdprog,
Everything you say is true except that you don’t provide any insight as to why Michigan and the other Great Lake states where able to produce new industry after new industry for nearly a century but then stopped doing so sometime around 1960.
The Great Lake states used to be the place that people with new ideas went to when they wanted to start new businesses. Now it’s the place they leave. The states had enormous competitive advantages such as the worlds most dense heavy transport infrastructure and the highest concentration of skilled manufacturing labor in the world. What changed?
The only thing that changed was the political culture of the region. Prior to the 1930’s the Great Lake states where the center of all-hogs-to-the-trough capitalism. The economically-creative minority were viewed as the regions greatest natural resource and economic-creatives like Ford were celebrated as regional heros. After the 1930’s and accelerating in the 1950’s, economic-creatives began to be viewed as actively evil people who had to be continuously monitored and restrained by unions and wise and benevolent politicians.
Unions in particular vilified the people who created the jobs for union members and began to treat both employers and consumers as having no other function than to provide a large number of jobs paying above market wages and benefits. Unions struck repeatedly in starting in the late 1950’s in order to stop the improvement of heavy industry in the region because doing so cost jobs.
Government raised taxes and piled on regulations while at the same time the quality of government services declined. They were actively hostile towards economic-creatives.
The Great Lake states are something akin to a 65 year old former baseball great. You can admire him for how he played 35 years ago and reminisce with him about his glory days but you won’t put him in the starting lineup. The Great Lake states do have an amazing history and they did indeed build most of America and even rebuilt big chunks of Europe and Japan. They did produce innovation after innovation that raised standards of living for everyone in the world.
But that was nearly 50 years ago. The Great Lake states aren’t that place anymore.
I agree that much of what Michigan has done, is old, rust-belt technology. But we can’t drive to our favorite destinations on Iphones, Ipods, and Netbooks.
The trouble is, we can always drive to our favorite destination in cars made in completely modern factories in Texas or Seoul.
As great and cool as our newest technology gadgets are, we still need the dirty, mechanical machines that have survived into it’s third century.
But the political culture in the Great Lake states won’t let those kinds of industry be built there so its a moot point.
I truly don’t believe this country will survive economically if Michigan, along with its neighboring industrial states of Indiana, Ohio and Ontario, Canada to sink.
There is nothing the rest of the country can do because the problems of those areas are completely self-inflicted. Someone in Texas can’t fix Detroit’s racist socialist government if the people of Detroit keep electing those kinds of politicians. Neither can we fix state laws that allow unions to cripple and destroy industries at will.
Hi-Tech business and you won’t find a more beautiful state in the Midwest than Michigan!
I don’t see it and I don’t think anyone else does. What does Michigan have to offer, for example, a computer company? Does Michigan have a workforce with high levels of computer skill? Not particularly. Does it have a good public school system that companies can use to attract talent. Does it have work rules and labor laws that lets people in a small company work 90 hour weeks during crunch time. How many different unions will control the companies total labor force? What happens to the company when one of those unions strikes? A month is an eternity in high-tech. A company would be insane to bet its future on the gamble that the janitors won’t shut the company down for a month. How about work rules? In high-tech, task and organization change rapidly sometimes several times a year. There is often no clear distinction between workers and management. The companies are continuously reorganizing and adapting. How can they do that if they are locked in to 2-3 year contracts that freeze the companies organization?
You just can’t say that Michigan is a great place to do business, you actually have to have the legal and political environment to support that. No serious business person is going to locate in a state just because some celebrities makes some ads. They want reality and numbers.