When GM closes a plant, work­ers lose jobs. And a city loses its spirit.

Eco­nomic pain ra­di­ates out­ward, writes The Post’s Amy Goldstein

The Washington Post Sunday - - OUTLOOK - Twit­ter: @gold­steinamy

The work­week af­ter Thanks­giv­ing opened with a shud­der as Gen­eral Mo­tors an­nounced that it would stop pro­duc­tion at four U.S. plants and one in Canada, doom­ing more than 14,000 jobs. As protest­ing work­ers walked out of their as­sem­bly plant into freez­ing rain east of Toronto, and as Pres­i­dent Trump up­braided GM chief ex­ec­u­tive Mary Barra for killing jobs in Ohio, what struck me most was the eerie echo of an­other an­nounce­ment by the same au­tomaker a decade ago. On the morn­ing of June 3, 2008, Gen­eral Mo­tors is­sued a death sen­tence to four other North Amer­i­can fac­to­ries. Among them was the Janesville As­sem­bly Plant, the old­est op­er­at­ing fa­cil­ity in the GM fir­ma­ment. It churned out its first Chevy on Valen­tine’s Day in 1923, and the last Ta­hoe SUV rolled off its as­sem­bly line two days be­fore Christ­mas in 2008. For the 81/2 decades in be­tween, the 4.8 mil­lion-square­foot fac­tory was the eco­nomic soul of a small south­ern Wis­con­sin city where, it turned out, I would spend nearly six years re­search­ing what hap­pens in a proud town when good work­ing­class jobs go away.

The big­gest job losses — and trauma — from the lat­est an­nounce­ment in­volve three enor­mous as­sem­bly plants that, like the one in Janesville, have been cen­tral to their com­mu­ni­ties’ iden­ti­ties and la­bor mar­kets. Oshawa, On­tario, has been a car­mak­ing place for a cen­tury. The Detroit-Ham­tramck plant has been the sole sur­viv­ing Gen­eral Mo­tors as­sem­bly plant in the city that is home to GM’s head­quar­ters. In Lord­stown, Ohio, auto jobs of­fered a haven af­ter the 1970s col­lapse of the steel in­dus­try in nearby Youngstown, which made the Ma­hon­ing Val­ley a sym­bol of the scars of dein­dus­tri­al­iza­tion.

Sep­a­rated though they are by hun­dreds of miles and an in­ter­na­tional bor­der, we know how the story for th­ese places prob­a­bly will go. The lessons from Janesville sug­gest that, even in a com­mu­nity with con­sid­er­able so­cial cap­i­tal and a ve­he­ment will to re­cover, the demise of an auto as­sem­bly plant leaves deep bruises: a cas­cade of lost jobs, es­ca­lat­ing ten­sions, fam­i­lies tum­bling from the mid­dle class. A full re­cov­ery is un­likely.

In each of the com­mu­ni­ties stung last week (there were five, in­clud­ing two smaller fac­to­ries in Mary­land and Michi­gan), the im­me­di­ate shock among work­ers, their neigh­bors and their elected rep­re­sen­ta­tives was iden­ti­cal to its pre­cur­sor in south­ern Wis­con­sin. Sens. Rob Port­man (R) and Sher­rod Brown (D) of Ohio voiced their bi­par­ti­san griev­ance; few events are as po­lit­i­cally uni­fy­ing as an in­dus­trial gi­ant rip­ping out thou­sands of con­stituents’ well­paid jobs. But if Janesville is any guide, such an al­liance will last only un­til it comes time to find re­al­is­tic long-term so­lu­tions for the lo­cal econ­omy.

As in Janesville, too, the ef­fects of the as­sem­bly plants’ demise on th­ese com­mu­ni­ties are cer­tain to spread far be­yond the loss of the GM jobs them­selves — about 1,500 at Detroit, 1,400 at Lord­stown and 2,500 at Oshawa, with salar­ied po­si­tions across Gen­eral Mo­tors mak­ing up the rest. Work at lo­cal sup­pli­ers will dry up. In Janesville, the as­sem­bly plant had been the only cus­tomer for a seat-mak­ing fac­tory whose 800 work­ers lost their jobs in tan­dem with the GMers as suc­ces­sive shifts dis­ap­peared. And with GM and sup­pli­ers of­fer­ing the best wages in town, their loss has had a par­tic­u­larly harsh ef­fect on what econ­o­mists call in­duced em­ploy­ment. Auto work at GM and nearby sup­pli­ers ac­counts for about 8,000 jobs in the four Ohio coun­ties that draw work­ers to the Lord­stown plant, and an equal num­ber of lo­cal jobs are likely to van­ish as a rip­ple ef­fect of re­duced spend­ing power in the area, ac­cord­ing to an anal­y­sis for The Wash­ing­ton Post by Su­san Helper, an eco­nom­ics pro­fes­sor at Case Western Re­serve Univer­sity and for­mer chief econ­o­mist for the Com­merce Depart­ment. That’s about 8 per­cent of the em­ploy­ment in those coun­ties, Helper says.

The domino ef­fects ex­tend out­side the auto in­dus­try and, if towns aren’t swift or lucky at res­cu­ing them­selves, can spi­ral a lo­cal econ­omy down. “Busi­nesses across the com­mu­nity suf­fer — not just sup­pli­ers or ser­vice providers who di­rectly sup­ported a closed plant, but also restau­rants and bars and re­tail­ers of all kinds,” John Russo and Sherry Linkon, lead­ers in work­ing-class stud­ies who used to teach at Youngstown State Univer­sity, wrote in Ci­tyLab. “Stores close, win­dows get bro­ken, store­fronts get boarded up, and down­towns empty out.” Even Janesville, which has been spared the worst, lost day-care cen­ters be­cause out-of­work par­ents no longer needed some­one else to keep their kids. Bowl­ing al­leys suf­fered be­cause peo­ple with­out in­comes dropped out of leagues.

Re­cent re­search un­der­cuts the tra­di­tional no­tion that, af­ter an ini­tial bad jolt, most com­mu­ni­ties and laid-off work­ers will re­gain their balance, with some in town win­ning re­stored jobs and wages and oth­ers mov­ing to parts of the coun­try where work is more plen­ti­ful. “It’s time to get real about the grit­ti­ness of ad­just­ment,” Mark Muro, at the Brook­ings In­sti­tu­tion’s Met­ro­pol­i­tan Pol­icy Pro­gram, has writ­ten in a re­view of lit­er­a­ture show­ing that mo­bil­ity has slowed and some la­bor mar­kets, even two years ago, had not come back from the Great Re­ces­sion. Other work has fo­cused on lost earn­ings from mass lay­offs, find­ing that, even in rel­a­tively mild down­turns, men who lose a job end up with more than a year’s lower earn­ings over their life­times than if they had never been part of a large-scale em­ploy­ment ca­su­alty.

Janesville mounted trag­i­cally heroic ef­forts to pre­vent the plant’s clos­ing, and GM it­self laid the ground for more of this in its lan­guage Mon­day. A com­pany state­ment said the three as­sem­bly plants will be “un­al­lo­cated” in 2019 (mean­ing no prod­uct will be made there), but they will not be tech­ni­cally closed. Barra, the CEO, sug­gested that plans could shift as a re­sult of GM-United Au­to­mo­bile Work­ers con­tract ne­go­ti­a­tions sched­uled for next year. This same crevice of hope lin­gered in Janesville for years, at first as the state of Wis­con­sin, lo­cal gov­ern­ments, the union and mem­bers of Con­gress ex­horted Gen­eral Mo­tors to give Janesville an­other prod­uct to make. They backed their lob­by­ing with $195 mil­lion in eco­nomic in­cen­tives, plus more than $200 mil­lion in union con­ces­sions — the largest such pack­age in Wis­con­sin his­tory at the time — and were as­ton­ished when Michi­gan beat them out, of­fer­ing five times as much in pub­lic funds. When GM opened a line in 2011 for its new sub­com­pact, the Sonic, it was in Orion Town­ship, north of Detroit. Ex­pect the court­ing of GM this time to in­volve vast sums of pub­lic money and big worker con­ces­sions, in­clud­ing lower pay.

The GMers at the idled plants may live for a sur­pris­ingly long time in a state of de­nial. In Janesville, I at­tended a high school grad­u­a­tion in 2013 and was greeted by a GM re­tiree with two adult chil­dren who had lost their jobs when the plant shut down. He told me, 41/2 years af­ter the last Ta­hoe, that it was just a mat­ter of time un­til it re­opened. This brand of de­nial was fu­eled in part by the fact that GM kept its Janesville plant in a limbo sta­tus called “standby” — el­i­gi­ble to spring back to life if market forces ever war­ranted it — un­til 2015, when the plant was per­ma­nently closed. In the ini­tial re­ac­tions of work­ers in Oshawa, Detroit and Lord­stown, I de­tected a fa­mil­iar op­ti­mism. “Hope­fully they will change their mind and give us a prod­uct,” Jess Adams, a 40-year GM Lord­stown em­ployee, told the Vindicator, Youngstown’s news­pa­per, the day he learned that his plant would shut down in March. “We’ve al­ways sur­vived be­fore.”

As­sum­ing that such hope proves hol­low, as it did in Janesville, the GM work­ers in On­tario, Michi­gan and Ohio al­most cer­tainly will con­front a wrench­ing choice. If they have enough se­nior­ity, they will have trans­fer rights to jobs at Gen­eral Mo­tors plants around the coun­try whose as­sem­bly lines still are run­ning. In Janesville, th­ese trans­fers cre­ated a cadre of GM Gyp­sies, as they call them­selves, who com­mute hun­dreds of miles, ev­ery week or ev­ery month, to prop up their fam­i­lies’ mid­dle­class stan­dard of liv­ing with­out mov­ing away from the lit­tle city they love. For the rest, jobs that are avail­able lo­cally — even as un­em­ploy­ment is a frac­tion of the rate a decade ago — are not likely to come near the GM union top wage of $28 an hour or the ben­e­fits the com­pany pro­vides its work­ers.

Of course, the echo of this past week is not an iden­ti­cal match to its pre­de­ces­sor. In 2008, GM’s then-CEO, Rick Wagoner, an­nounced the plant shut­downs seven months into the Great Re­ces­sion, the na­tion’s worst eco­nomic cri­sis since the Great De­pres­sion of the 1930s. Gen­eral Mo­tors was so frag­ile that, de­spite nearly $20 mil­lion in fed­eral loans dur­ing the ini­tial cri­sis, the com­pany filed for bank­ruptcy a year af­ter it an­nounced that Janesville and the three other plants would close. In con­trast, this is the sec­ond-long­est pe­riod of eco­nomic ex­pan­sion in recorded his­tory, and Barra por­trayed the de­ci­sion as a pre­ven­tive mea­sure. “We are tak­ing th­ese ac­tions now while the com­pany and the econ­omy are strong,” she told an­a­lysts on a con­fer­ence call Mon­day, “to stay in front of a fast-chang­ing market.” In this brighter eco­nomic con­text, plant clos­ings can be seen not as the sur­vival strat­egy they were a decade ago but a gift to GM’s in­vestors. The com­pany’s shares shot up by nearly 8 per­cent just af­ter Mon­day’s an­nounce­ment.

And the ve­hi­cles be­ing made at the tar­geted plants rep­re­sent the flip side of the auto in­dus­try’s market a decade ago. Janesville was as­sem­bling full-size SUVs that no longer sold, as gas prices had sur­passed $4 a gal­lon. The other three plants then were man­u­fac­tur­ing trucks. A decade later, the small cars that GM had en­vi­sioned as its sal­va­tion are now on the chop­ping block as trucks and SUVs dom­i­nate show­rooms. Lord­stown man­u­fac­tures the Chevy Cruze, a com­pact that the com­pany in­tro­duced in 2008. In a cruel irony, Lord­stown was the fi­nal trans­fer of­fer for Janesville’s laid-off GMers.

But a truth over­shad­ows th­ese dif­fer­ences: Dein­dus­tri­al­iza­tion con­tin­ues its march, with the ini­tial trauma and dis­be­lief — even at plants that had been hem­or­rhag­ing shifts and work­ers — des­tined to give way to a pro­longed slide down­hill. Nine years af­ter the last Ta­hoe came off Janesville’s as­sem­bly line, GM sold the dead plant to a St. Louis-based com­pany spe­cial­iz­ing in dis­tressed in­dus­trial prop­er­ties. The new owner, Com­mer­cial De­vel­op­ment Co., be­gan to de­mol­ish it in April. The fer­vent hope in town is that new com­pa­nies — per­haps dis­tri­bu­tion cen­ters that pay far less than auto jobs — will buy up parcels of the enor­mous tract. It’s what passes for a best-case sce­nario. Amy Goldstein, a Wash­ing­ton Post staff writer, is the au­thor of “Janesville: An Amer­i­can Story.”


TOP: A worker ar­rives at the Gen­eral Mo­tors as­sem­bly plant in Janesville, Wis., in June 2008, shortly af­ter Gen­eral Mo­tors an­nounced that the fa­cil­ity would close. ABOVE: De­mo­li­tion work con­tin­ues at the plant this fall.


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