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Who, or What, Killed Detroit? Union Greed
Investors Business Daily ^ | 03/24/2011

Posted on 03/24/2011 7:08:09 AM PDT by SeekAndFind

Cities: Poor Detroit. It hasn't had any good news for decades, and now, despite a $77 billion bailout of the auto industry, its population continues to implode. The No. 1 reason: the United Auto Workers union.

Census data released Tuesday show Detroit's population has plunged 25% since 2000 to just 713,777 souls - the same as 100 years ago, before the auto industry's heyday. As recently as the 1970s, Detroit had 1.8 million people.

What's happening is no secret: Detroiters are fleeing an economic disaster, the irreversible decline of the Big Three automakers.

In his now-famous Super Bowl commercial for Chrysler, rapper Eminem drives up to a theater in a sleek new 200 model and says, "This is the Motor City. And this is what we do." But, sadly, that's no longer the case. Detroit's decline has been shocking.

Sure, a lot of the blame goes to a generation of bad management. But the main reason for Detroit's decline is the greed of the industry's main union, the UAW, which priced the Big Three out of the market.

As recently as 2008, GM, Ford and Chrysler paid their employees on average more than $73 an hour in total compensation. The 12 foreign transplants, operating in nonunion states mostly in the South and Midwest, averaged about $42 an hour.

Guess which manufacturers are healthiest and expanding their market today? In 2008, the Big Three still made 59% of all cars in the U.S. But, according to recent estimates, their market share is now 46% - with foreign companies selling the bulk of all U.S. cars. So Detroit's loss has been the South's and Midwest's gain.

Behind this is the gold-plated benefits package once guaranteed to UAW workers.

(Excerpt) Read more at realclearmarkets.com ...


TOPICS: Business/Economy; Culture/Society; News/Current Events; US: Michigan
KEYWORDS: bluezones; detroit; manufacturing; uniongreed; unions

1 posted on 03/24/2011 7:08:11 AM PDT by SeekAndFind
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To: SeekAndFind

Let’s Consider the dollars and cents folks and it really adds up:

* Total pay and benefits for a full-time worker for the Big Three until recently averaged about $140,000 a year.

* The Foreign transplants? Just $80,000.

* Add in an estimated $2,000-plus per car for retiree health care and pensions for the Big Three, and the cost gap is huge.

* Two years ago, the Center for Automotive Research estimated that for every job created by a foreign transplant, 6.1 jobs were lost by the Big Three - many of them in Detroit.


2 posted on 03/24/2011 7:10:21 AM PDT by SeekAndFind
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To: SeekAndFind

And, based on their successes in the Motor City, the UAW plans to spend millions on organizing Honda, BMW and Nissan plants in the US.
Good luck with that, boys...


3 posted on 03/24/2011 7:10:58 AM PDT by Eric in the Ozarks (Go Hawks !)
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To: SeekAndFind

Beautiful Detroit! City of Vision! A Model for America's Future!

4 posted on 03/24/2011 7:11:37 AM PDT by ScottinVA (Imagine.... a world without islam.)
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To: ScottinVA

Seen on a recent Detroit Parade of Homes tour...

Business thrives in bustling Detroit!

5 posted on 03/24/2011 7:17:55 AM PDT by ScottinVA (Imagine.... a world without islam.)
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To: SeekAndFind

“Let’s Consider the dollars and cents folks and it really adds up:”

Yep, I read somewhere recently, that upon graduation over 50% of Michigan and Michigan State grad’s leave the state for greener pastures. Receiving states should thank Michigan tax payers for these highly educated free assets. Poor, poor, pitiful Michigan....


6 posted on 03/24/2011 7:19:34 AM PDT by snoringbear (Government is the Pimp,)
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To: ScottinVA
A Model for America's Future!

If Obama gets reelected you probably aren't too far off.

7 posted on 03/24/2011 7:19:34 AM PDT by hattend (Obama got his 3am call about Egypt. The call went right to the answering machine.- Sarah Palin)
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To: ScottinVA

That’s a scene from Robocop, right?


8 posted on 03/24/2011 7:23:21 AM PDT by swain_forkbeard (Rationality may not be sufficient, but it is necessary.)
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To: ScottinVA
Many years ago, here in FR, someone posted a beautiful thread about Detroit.

Pictures of before (if available) and after ... of noted buildings, i.e. ; hotels, large office buildings, mansions and etc.

I grew up in Boston, so I have a taste of older archetecture and it was easy to imagine myself in those Detroit heydays.

I now live in the Pittsburgh area, and though I was not conditioned to the steel industry, I have worked in older factory types ... and to see the decay of steel mills along the river ... the broken and crumbling parking lots designed to hold .. I don't know .. a thousand or so ?, cars ....

America has been under attack by 'modernity' ever since the glass and steel archetects came of age.

I don't know ... maybe I'm just old.

9 posted on 03/24/2011 7:23:53 AM PDT by knarf (I say things that are true ... I have no proof ... but they're true.)
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To: SeekAndFind

For both management and labor, it was the love of money.


10 posted on 03/24/2011 7:24:56 AM PDT by blueunicorn6 ("A crack shot and a good dancer")
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To: knarf

Google “the fabulous ruins of Detroit” to revisit that site. It will make you cry all over again.


11 posted on 03/24/2011 7:27:54 AM PDT by doodad
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To: SeekAndFind

Liberals killed Detroit along with the UAW.

Liberals have controlled Detroit since 1961.


12 posted on 03/24/2011 7:28:40 AM PDT by crz
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To: swain_forkbeard

Not Robocop, I think it’s more like “Escape from New York”


13 posted on 03/24/2011 7:30:04 AM PDT by 101voodoo
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To: ScottinVA
The first computer company that I worked for was Burroughs Corporation during the mid to late 60s.

Burroughs was located in Detroit, it's factory workers were union and after the martin king riots in Detroit, the company started down hill and never recovered.

As a point of reference as to how the industry has changed over time, in '68 Burroughs sold the first 4 function {add, subtract, multiply, divide} electronic calculator, manufactured by Sharp, and it sold for $1,400.

Today that calculator is considered a give away and those functions are free on cell phones.

Regardless of products or markets, union greed can kill individual companies and even drive entire industries out of the country.

Capital will flow to the most friendly environment.

14 posted on 03/24/2011 7:33:07 AM PDT by USS Alaska (Nuke the terrorist savages.)
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To: SeekAndFind
In 2008 three liberals on the Michigan Supreme Court, and one ex-Republican whacko, Elizabeth Weaver, went on a rampage and ran a decade of jurisprudence through the shredder.

Obligations of contract no longer mean anything, and judges are free to interpret and enforce (or not) contracts as they see fit. Scalia's famed opinion in the Lujan decision on standing to bring suit, adopted almost immediately by most states in the US, no longer applies in Michigan. Anyone can sue anyone for anything. Feel bad because your neighbor's kid got treated badly at school. You can sue for damages in a "representational" capacity.

the present term is supposed to fix that, with a new Republican majority, but we have learned that Republicans are just as often RINOs as conservatives. CJ Young is very good, but one newly elected member, Mary Beth Kelly, is not turning out to be a reliable conservitive. Newly appointed Brian Zahra has a fabulous reputation as a "rule of law" judge, but he went very wobbly trying to figure out which way the political winds were blowing.

Michigan is not a state anyone wants to be doing business right now.

15 posted on 03/24/2011 7:33:20 AM PDT by AndyJackson
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To: All

I dont know how many of you have been there? But, it is the most shocking and amazing experience you’d ever have.
Some streets way out are actually fields and woodlands. You cant even tell that it was house to house neighborhoods anymore. I know, because I know people who lived there and took me to where they used to live when they were kids.

And it continues to creep out into the urban areas.


16 posted on 03/24/2011 7:33:56 AM PDT by crz
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To: swain_forkbeard

Not Robocop, I think it’s more like “Escape from New York”


17 posted on 03/24/2011 7:34:15 AM PDT by 101voodoo
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To: SeekAndFind

Not only did they price the big three out of the market, they priced American industry out of America. Now, everything is not only made overseas, but we’ve lost touch with the technologies.

Not only do we not make our light bulbs but our citizens don’t have the intelligence to screw them in. Otherwise, we would have never permitted the unions to take over this country and would have never elected this idiot to the presidency.


18 posted on 03/24/2011 7:35:33 AM PDT by arrdon (Never underestimate the stupidity of the American voter.)
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To: snoringbear
Yep, I read somewhere recently, that upon graduation over 50% of Michigan and Michigan State grad’s leave the state for greener pastures

One of my predictions for the future is that the State University is going to go the way of the Dodo Bird, because it will get harder to justify spending the money on students who most likely won't stay in the state after graduation.

19 posted on 03/24/2011 7:38:53 AM PDT by dfwgator
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To: SeekAndFind

Democrats.


20 posted on 03/24/2011 7:44:28 AM PDT by monocle
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To: dfwgator

Not to worry. GM will now be rescued by the Dolt. Whoever dreamed up that one wasted billions.


21 posted on 03/24/2011 7:45:53 AM PDT by Oldexpat
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To: SeekAndFind

What is reason No. 2?


22 posted on 03/24/2011 7:46:46 AM PDT by Anti-Bubba182
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To: blueunicorn6
For both management and labor, it was the love of money.

I would say it was liberal's addiction to other people's money that caused this.

23 posted on 03/24/2011 7:53:51 AM PDT by ALPAPilot
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To: SeekAndFind

Don’t forget the stupidity and arrogance of GM! It was an important contributing factor.


24 posted on 03/24/2011 7:55:12 AM PDT by Oldpuppymax
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To: SeekAndFind

I worked, in Detroit under Sheriff Bill Lucas, while Detroit began its decline. Coleman Alexander Young, I believe, had more to do in destroying Detroit. Young HATED his Police Dept, including everything it represented. Before the “Destroyer Young” the City was a great place to live, work, play, and shop. The UAW hurt the entire nation. Currently, the UAW is going after the Ford Motor Co.


25 posted on 03/24/2011 8:05:00 AM PDT by DeadFurrow (Your rights end where mine begins.)
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To: SeekAndFind
I was brought up in Detroit, 2 words killed Detroit the most.....FORCED BUSING.

No one ever wants to mention that 800 pound gorilla sitting in the middle of the living room...

Middle class blacks and whites moved out as fast as they could....no one wanted their 1st grade child put on a bus at 7 in the morning to drive across town to go to a school with no she knows probably going to the same school..

Blacks were as pi$$ed as whites with forced busing...

26 posted on 03/24/2011 8:05:50 AM PDT by goat granny
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To: Oldpuppymax

I recently visited Saint Louis, Missouri.. there is zero urban blight, at least from what I could see. There is a gorgeous section of old homes and converted shoe factories to apartment buildings, that I visited.. just a stunning area.

I wonder if Budweiser is a Union plant? That is their main industry, from what I understand.


27 posted on 03/24/2011 8:06:29 AM PDT by Chuzzlewit
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To: Chuzzlewit

Go North of where you were and it is there. It isn’t as bad a some other cities and in places it’s block to block, but there is a lot of it.


28 posted on 03/24/2011 8:11:09 AM PDT by PrincessB (Drill Baby Drill.)
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To: SeekAndFind
Very interesting article, but I think a lot of these analyses that focus on labor and management issues at major U.S. corporations as the major influence in the downfall of a city like Detroit are overlooking a couple of important things.

I would make the case that Detroit would still be a city in decline -- especially as far as the automotive industry is concerned -- even if the UAW never existed and the city was a well-managed jurisdiction. I've come to believe that the single biggest factor in Detroit's industrial decline is that being situated on the Great Lakes system no longer provides industries with the advantages they once had.

Nowadays, having good access to major East Coast and West Coast ports (either directly or through Class I railroads) is more important to an industry. Cars don't need as much steel as they once did . . . which means they don't need access to Great Lakes ports where iron is barged in from Minnesota and Wisconsin . . . and they don't need to have miles of railroad tracks to bring coal in from Pennsylvania, West Virginia, Kentucky, etc. I think geography is a bigger factor in Detroit's decline than most people realize. It's no coincidence that Detroit's decline is occurring even as other old industrial cities along the Great Lakes (e.g., Cleveland, Buffalo) are in decline, too.

29 posted on 03/24/2011 8:14:15 AM PDT by Alberta's Child ("If you touch my junk, I'm gonna have you arrested.")
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To: SeekAndFind

I’ve just had a look at Detroit property.

What a tragedy.

Although...

I live in a very cheap former mining town in northern England, also with low employment and the manufacturing industry decimated.

It seems I can pick up a decent sized five bedroom 3 bathroom detached property over there, if I sell my tiny little ex-miner’s 3 bedroom terraced house (would’ve been four but they had to move the bathroom indoors) here.

The positive news is that I worked with some other entrepeneurs and we’ve finished getting the village hooked up to three different next-gen broadband technologies. As a consequence businesses are getting interested, two senior architects working for high end IT consultancies have moved into our neighborhood, the business park is expanding for the first time since... ever, property prices are on the up and there’s even talk of us getting a major national railway station up the road which’ll rejuvenate the rest of the local area.

So, it is possible to turn an industrial wasteland into a hotbed of entrepeneurship, even in That Yorkshire.

So... Detroit.

Is it worth a punt?


30 posted on 03/24/2011 8:28:52 AM PDT by MalPearce
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To: SeekAndFind
One of the comments has a different take:
Speaking as a refugee from Detroit AND the Big 3 - - -

Much as I loathe the UAW, it did not kill the CITY of Detroit. What did that was, in two words, Coleman Young, the original Robert Mugabe of Michigan. All round the city are prosperous suburbs, generically known as Oakland and Macomb counties. GM, Ford, and Chrysler all built new plants in the 'burbs, which was partly due to simple logistics - transport to and from the downtown plants wasn't as easy as a greenfield plant in, say, Lake Orion. But also partly due to high taxes and graft that Young brought to a fever pitch within the city. Most of those new plants are still operating, and are still getting the best new machinery, (which was my piece of the puzzle). But the exodus of PEOPLE from Detroit was purely political - the corruption and racism that Young brought in was more than they could stand. This has contributed to a further decline of the city infrastructure, to the point where the majority of it now is only good for bulldozer practice.


31 posted on 03/24/2011 8:30:17 AM PDT by Bob
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To: SeekAndFind

Welcome to Starnesville


32 posted on 03/24/2011 8:41:25 AM PDT by isaiah55version11_0 (For His Glory)
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To: ScottinVA

Sure looks like the Obama T.A.R.P. sure is working out just fine.


33 posted on 03/24/2011 8:46:02 AM PDT by Vaduz
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To: 101voodoo

Maybe it’s time to make, “Escape from Detroit”. (Escape From LA stunk on ice)


34 posted on 03/24/2011 9:08:07 AM PDT by sportutegrl
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To: ScottinVA
You forgot to include a picture of the majestic Detroit School Book Depository:

What an amazing depiction of knowledge unlearned and potential untapped. The ruin of the city in smelly, moldy microcosm.

35 posted on 03/24/2011 10:01:15 AM PDT by Charles Martel (Endeavor to persevere...)
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To: SeekAndFind

It’s never that simple. Agree 100% the unions were a big problem. But how about clueless management? They ran wasteful operations, completely missed markets, allowed crap cars to be produced, and generally didn’t give the consumer what they wanted most of the time.

Meanwhile, the Japanese companies run a tight ship, and have for decades had design bureaus here in the US to meet US consumer desires. And they were never afraid to tackle a technical challenge. The end was in sight with the Big 3 said it was impossible to meet emissions standards, and Mr. Honda brought showed off his CVCC engine that already did.


36 posted on 03/24/2011 11:52:36 AM PDT by antiRepublicrat
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To: dfwgator

“Yep, I read somewhere recently, that upon graduation over 50% of Michigan and Michigan State grad’s leave the state for greener pastures”

“One of my predictions for the future is that the State University is going to go the way of the Dodo Bird, because it will get harder to justify spending the money on students who most likely won’t stay in the state after graduation.”

An interesting prediction, had not considered that possibility.


37 posted on 03/25/2011 5:56:56 AM PDT by snoringbear (Government is the Pimp,)
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To: antiRepublicrat
There is no doubt that management was complicit in the decline and fall of the auto industry, and by extension Detroit. Much like recent generation of politicians, they caved to union demands to avoid costly strikes and keep the cash flow going, knowing full well they were kicking the can down the road--sound familiar? Like Congress? In both cases, the perpetrators said "What the hell, we know it is unsustainable, but when the bill comes due none of us will be around anyway."
38 posted on 03/26/2011 1:49:20 PM PDT by hinckley buzzard
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