Weekly Standard: The Death of Detroit (Laughable, Harrowing and Appalling at the same time)

The Weekly Standard ^ | Matt Labash

[quesney]

Before I'd left [for Detroit], I'd asked an acquaintance if he was from Detroit. "Indeed I am," he said, "Give me all your f--ing money."

Another colleague, always mindful of my desire for maximum material, suggested, "You should go when it's warm, you'd have a better chance of getting hurt."

Somewhere along the way, Detroit became our national ashtray, a safe place for everyone to stub out the butt of their jokes...

But with millions of jobs on the line, including their own, the Detroit Three honchos went to Washington to endure the kabuki theater, first in their private jets, then in their sad little hybrids. All to get their slats kicked in by Congress (and who has been more profligate than they) in order to secure a bridge loan to withstand an economy wrecked by others who'd secured no-strings bailouts before them. The absurdist spectacle was best summed up by car aficionado Jay Leno: "People who are trillions of dollars in debt, yelling at people who are billions of dollars in debt."

It happens, though, when you're from Detroit. In the popular imagination, the Motor City has gone from being the Arsenal of Democracy, so named for their converting auto factories to make the weapons which helped us win World War II, and the incubator of the middle class (now leading the nation in foreclosure rates, Detroit once had the highest rate of home ownership in the country), to being Dysfunction Junction.

To Detroit's credit, they've earned it.

[truthguy]

With Obama and the Democrats at the helm, the entire United States will look like Detroit in short order.

[Philo-Junius]

And, it should be noted, Studebaker failed for precisely the same reasons GM and Chrysler are failing: poor executive-level management decisions coupled with unsupportable labour costs resulting from giveaways to the UAW.

All of this goes back to the Flint sit-down strike in 1936-37, and the refusal of the government to enforce the law against the unions then. The political protection of union thuggery resulted in the corporations’ capitulation on labour costs.

The day of reckoning was only postponed, not avoided.

[Cymbaline]

From the article:

For many, Detroit is identified with cars or soul music, with the novels of Elmore Leonard or the architecture of Albert Kahn. If they really hate Detroit, they might recall that its suburbs coughed up Madonna.

That's not a plus, that's a negative!

[Larry Lucido]

But...but...Detroit gave us KISS, Eminem, Nugent, and Kid Rock!

Three out of four ain't bad.

Okay, two and a half out of four.

[Larry Lucido]

Thanks for that link. Very informative.

[truthguy]

Rubbish!

If GM and the others don't represent the state of the art manufacturing then tell me who does? What company manufacturers here in the US anymore. Apple? They build everything offshore. Most of the Silicon Valley companies are doing most of their manufacturing offshore.

Who manufacturers in US anymore with the "state of the art manufacturing technology". Give me some examples. And please don't give me software companies or drug companies.

As far as product lines GM and Ford have excellent products. The problem they have is making (or losing)money. The problem is COST STRUCTURE. The Ford Fusion and Chevy Malibu are great mid sized cars. They are every bit as good as the Accord or Camry. I know because I've driven all four. The Corvette is the best production sports car in the world. The Cadillac CTS is the best Sedan in the world under $40,000. We still make the best full sized trucks and the Chevy Volt will revolutionize the auto industry if GM can get the financial house in order. Japan for the most part is still a copy cat. Yes they are great in quality control. But no new ideas come out of Japan.

If the US Manufacturers could get rid of the UAW and get a competitive cost structure they could easily beat the imports.

Finally many people keep talking about incompetent management. But it would have been impossible for all 3 car companies to have had bad management for such a long time. At least one of the car companies would have stumbled onto the right management team at some point. And please give me some examples of the poor management. Cite some cases. Do more than just parrot what you've heard others say. Give me concrete examples.

[Philo-Junius]

When the Ford family decided to completely overhaul their operations, they hired the CEO of Boeing Commercial.

That is a blazing indictment of the entire auto industry, and it tells you where the Ford family thinks the state of the art of U.S. industry is located.

Every UAW contract approved after Flint Hill represented a bad management decision. Shoddy work, self-indulgent design—GM itself admitted that it had “betrayed” its customers.

I don’t have time to cite every bad call by Detroit, but anyone who thinks the manufacturers who gave us the Pontiac Aztek will all pull it together if we just give them another $15 billion to burn through is beyond rational persuasion.

[Philo-Junius]

I’m sorry; I meant “Every UAW contract approved after the Flint sit-down strike...”

[MplsSteve]

And Motown Records too.

[hinckley buzzard]

As conflicted as I am about watching another American industry decline, I say good riddence to the UAW ...

After the 'rats pass the "Card Check" legislation, you can say hello to the UAW in all those other states as well. It will be interesting to see what the international companies do when confronted by twentieth century US labor corruption.

[Lancey Howard]

Thanks for the link to that fascinating site.

[truthguy]

Just as I thought you can't answer any questions.

You site no examples of state of the art manufacturing here in the US.

You site as bad management the decisions the auto makers made in contracts with the UAW. Yes that's true but what alternative did the Car companies have? The UAW would have gone on strike and destroyed the Auto Industry.

You give us the Pontiac Aztek as an example of a bad design. Fair enough but the absolute worst car I ever had was a VW Rabbit. It stayed in the shop most of the time racking up repair bills. So any company can have a stinker including the Germans or Japanese.

And as far as shoddy workmanship is concerned whose fault it that? Is it the UAW or management? You can't fire an employee who is lousy. The UAW protects the incompetent. I've worked in union shops and I know how the game is played. Unless and until you have been in that environment you can't understand the insanity of it all. But that's not bad management. The management team at each of the car companies would love for the UAW to go away but they can't wish it away.

This is why the transplants located in states in the South where they would not have to deal with the UAW. The UAW is a legacy of a past time in America. This is THE problem with the Auto Companies. Not bad management, not inferior engineering and design.

[Lancey Howard]

But...but...Detroit gave us KISS, Eminem, Nugent, and Kid Rock!

And Madonna.

[Philo-Junius]

You can’t claim I didn’t answer your questions and then argue with my answers in the same post.

O.k, I’ll try again, more slowly.

The state of the art of U.S. industry is the aerospace industry, as indicated by Ford hiring Alan Mullaly.

A fundamental principle of business administration is treating the firm as a going concern. Agreeing to labour contracts one can easily see will bankrupt the company amounts to an endorsement of bankruptcy.

So now the moment has come; it’s time for bankruptcy.

Which is of course, the last thing the UAW wants, because it would reopen the whole corrupt bargain management struck with the UAW in order to gouge consumers throughout the post-war years when there was no significant foreign competition.

[truthguy]

The Aerospace Industry? You can't be serious.

We are basically down to one company building Commercial Aircraft- Boeing.

The other companies have merged and mostly rely on defense with government contracts where costs can swell and the government can pick up the tab.

Yes we can build great fighter aircraft like the F-22 and the F-35 and many others. But cost is no object here. Cost is an object in building motor vehicles.

Japan is not a factor in aircraft because of their constitution. They don't build commercial aircraft because they can't build military aircraft and you need to do both unless you have a lot of government contracts like McDonald Douglas, Lockheed Martin etc.

Besides AeroSpace give me some more examples of state of the art manufacturing thriving in the US.

[quesney]

Please add me to your Michigan list. What’s happening there is depressing as hell, but we all need to take a hard look at where Michigan is going, because the entire country risks heading in the same direction.

[BRL]

But...but...Detroit gave us KISS, Eminem, Nugent, and Kid Rock!

And Madonna.

I think Alice Cooper too.

[Skooz]

bump for later

[Philo-Junius]

Boeing is the final assembler of major commercial aircraft, but a Boeing doesn’t go anywhere without GE or United Technologies powerplants, for instance. Boeing Commercial has about 8,000 suppliers in the U.S., and does something like $13 billion in business with them.

Commercial aerospace never embraced vertical integration the way the Detroit empire-builders attempted. That may be one reason why they remained cutting-edge.

Japan does indeed build military aircraft—google the J-2, for instance, and is a major Boeing partner on the 787. Japanese heavy industry does not launch a competing finished commercial aircraft product because they have been nearly completely incorporated into the Boeing supply chain.

China, on the other hand, is quite likely to launch a small (c. 100 seat) commercial aircraft for domestic consumption and international prestige purposes in the very near future.

[Philo-Junius]

But to circle around to your larger question, I would nominate heavy engine and construction manufacturers like Caterpillar, Case, Navistar and Cummins as standard-bearers in industrial manufacture.

I don’t think they’re “state of the art” in the same sense as Boeing, but they’re all clearly world-class.

And, of course, petroleum engineering is another industrial sector in which the U.S. apologises to no one.

Industry does not revolve around Detroit, no matter what the people of Michigan may have come to believe. If the last manufacturer headquartered in Detroit turns out its lights, life will indeed go on just the way it did when Studebaker shut down in Indiana.