Once Upon a Time in America: Why GM and the UAW's postwar economic vision failed

wsj opinionjournal ^ | 11 27 05 | Michael Barone

[flixxx]

Once Upon a Time in America Why GM and the UAW's postwar economic vision failed.

BY MICHAEL BARONE Sunday, November 27, 2005 12:01 a.m.

The end, or the beginning of the end, of a familiar and comfortable world: That's how General Motors' announcement last week of massive layoffs and plant closings, following the bankruptcy of Delphi last month, strikes one who grew up in the Detroit area in the two decades immediately after World War II. In that world, it was easy to imagine you were at the center of the economy. Detroit was then the fifth-largest metropolitan area, the home of the Big Three auto companies and the United Auto Workers--national institutions of the greatest importance.

[Bernard]

Chrysler was always innovative, but it wasn't until they had a combination of Lee Iococca salesmanship and the desperation brought by almost-extinction through bankruptcy that the innovative stuff became popular.

GM needs sales skills in order to sell their product.

[meyer]

What you had in America for 65 years with the Big Three and GM was a giganitc Ponzi scheme --it is finally collapsing, as all Ponzi schemes finally do.

Lots of events took place in the 60's and early '70's to accelerate that collapse. EEOC, EPA, OSHA, plenty of other government intervention that contributed to the problem.

[chris1]

I had the most ridiculous conversations this weekend with older people with no clue about economics.

To me, it is typically the boomers and those a bit older that are absolutely clueless about why things are happening and that it is not all doom and gloom.

[SamAdams76]

And keep in mind that the "service" jobs people sneer at are not just burger-flipping; they include law, IT and xerox repair which are high-paying jobs that require skill to perform and are growing exponentially.

Excellent point. One of my best workers left my company to start his own auto-detailing business with his son. Father and son spend all day vacuuming and cleaning out cars and they make a bundle of money. They probably make more than most of their customers (who probably look down on them).

Because I am in the industry, I can attest that field service repairmen (such as copier repairmen or IT workers) make excellent salaries. More than your average auto-assembly worker - even the unionized ones.

I tell my own sons who are going through high school right now that services is where you want to be. Just think of all the skilled jobs that can't be moved overseas. Plumbers, electricians, chefs, carpenters, etc. Those professions are always in demand. It took me nearly a year to line up a good contractor to remodel my house - they are always booked months in advance and if you are a good contractor with a solid reputation, you will find yourself with more work than you can handle and will have to turn business away.

Even the "lower-end" service jobs can be lucrative if you are a go-getter. You can make $150 a night or more delivering pizzas, waiting tables or tending bar if you have the right attitude and customer-service skills. As the article states, we are a nation of "hustlers" and the go-getters will always be rewarded. Those looking for an easy, cushy job with guaranteed this and that are the ones who end up chronically unemployed and miserable.

[meyer]

Naturally people without any education can't find the high-paying jobs that GM and Ford provided for the uneducated, but that was a false premise to begin with. And keep in mind that the "service" jobs people sneer at are not just burger-flipping; they include law, IT and xerox repair which are high-paying jobs that require skill to perform and are growing exponentially.

Don't forget that a high school diploma today isn't what it was 40 years ago either. The schools love stuffing kids heads with social/enviro BS and prophylactic techniques rather than trigonometry.

Also, I'd almost consider law to be a "disservice" rather than a service.

[gas0linealley]

"I tell my own sons who are going through high school right now that services is where you want to be. Just think of all the skilled jobs that can't be moved overseas. Plumbers, electricians, chefs, carpenters, etc. "

Those jobs can't be moved but cheap labor can be.

The "hustling" contractors around here all have Spanish crews, and plenty of those workers live in "barracks" ie. illegal rentals. And now I'm hearing complaints from many of those native "hustlers" that they are being outhustled by their own former employees. Who benefits? The customers do, the same folks who embrace Democratic ideals.

[gas0linealley]

"I had the most ridiculous conversations this weekend with older people with no clue about economics.

To me, it is typically the boomers and those a bit older that are absolutely clueless about why things are happening and that it is not all doom and gloom."

Many years ago, when I was a boy, we learned about the conditions in Germany following WW1. For instance, that to purchase a loaf of bread required a wheelbarrow full of currency. In our economy today, the wheelbarrows are called "checks" and "credit cards".

[bybybill]

Thanks, I knew I was doing something wrong. Want to see my crown?

[jalisco555]

How do you define: "standard of living"?

Far more of us own our own homes than in the past. Most have more than one TV and either cable or satellite connections. Most have more than one car. We live longer than ever before. We travel more than ever. Our most serious nutritional problem is obesity. And on and on.

By every meaningful measure Americans today live better than any people at any time in human history.

[gas0linealley]

"Far more of us own our own homes than in the past. Most have more than one TV and either cable or satellite connections. Most have more than one car. We live longer than ever before. We travel more than ever. Our most serious nutritional problem is obesity. And on and on.

By every meaningful measure Americans today live better than any people at any time in human history."

How are we doing in the "immeasureables"?

[ken5050]

And if they had allowed Chrylser to die....then the other two might have gotten the message.

[jalisco555]

How are we doing in the "immeasureables"?

Harder to measure those, of course. Still, I'd rather live in a society where I have the time and energy to worry about gay marriage instead of one where I'm spending all my time and energy trying to feed my family and keep a roof over their heads.

[Beagle8U]

Great post.

The only fault I can find with the article is the part where he says that the tourists aren't traveling north to visit the UAW training center at Black Lake.

Its not a place you can just drive into and wander around..lol.
They have security guards at the entrance 24/7 that check everyone going and coming.
It is (or was possible) to get a visitors pass, but you better get that in advance.

They even have their own private police force.

Anyone that ever gets the chance to visit, you wouldn't be disappointed with the accommodations. And for UAW officers everything is free.

All the fruit and vegetables were flown in fresh everyday.
They had teams of professional chefs that prepared all the food. Lobster, prime rib, king crab, kegs of the finest wine on tap. The food was comparable to any fine restaurant in the world!
They had an Olympic sized swimming pool, full gym, sauna, steam room, hell...anything you wanted.
If you visited in the winter time, they had a shuttle that would take you out on the lake ice fishing.

Everything was provided for your brainwashing pleasure.
I spent a week there in the mid 80's and still feel bad for the poor saps that have their dues extorted to pay for that.

I didn't even go into the "nightlife" but you get the idea.

[KateatRFM]

Not joking in the least. The IT guys we use make $100 per hour and the ones that make house calls are generally working off the books and get to keep it all for themselves. The Xerox repair people are welcomed with a red carpet and rose petals and are paid whatever they want; our very large law firm could not function without the xerox machines, 4 to a floor, and we can't fix them.

If I were advising my kids I'd tell them to get into a field where they could free-lance their talents and abilities, keep their skills up to date, and learn to be charming, brave, clean, quiet, reverent and cheerful -- and PROMPT. A good portable skill coupled with a good attitude and you'll go far.

Plans are being made for how to handle the TTC (the local transit union) in case of Avian Flu. The general feeling among the passengers is that in case of an emergency they would immediately go on strike.

[surely_you_jest]

This business of fobbing off retirement costs on the Taxpayers is CRIMINAL..............

What was criminal was Congress making it possible to do so.

[RipSawyer]

How do you define: "standard of living"?>>>>>>>>

Very good question, judging by some of the replies you received, a lot of Freepers judge it by how many cheap color TVs they can afford so that they can sit on the couch and watch reruns of junk while growing ever fatter. I have some other ideas about standard of living and I don't see it improving, I see it as declining for most Americans.

[RipSawyer]

Many years ago, when I was a boy, we learned about the conditions in Germany following WW1. For instance, that to purchase a loaf of bread required a wheelbarrow full of currency. In our economy today, the wheelbarrows are called "checks" and "credit cards".>>>>>>>>>>>>>

Cue the trumpets! It seems that a majority of Americans think that someone who is loaded with possessions, most of which are really worthless and owes far more than the total value of all that they "own" is somehow better off than another who has very little in the way of possessions except a hundred acres of farmland and an old house and has no debt. Get a clue America! It doesn't matter how many toys you have, if you have a negative net worth you are still broke!

[nicollo]

GM's current mess is due to the absence of domestic competition that was brought on by 1930s consolidation of big business under the New Deal. First with price controls, then with unionized labor, FDR caused major industries to consolidate into but a few large players. Historians claim that the New Deal "saved capitalism from itself." That's a load, and an insidious one. About the only thing the New Deal saved was Walther Reuther's sorry ass. He was nothing until the Wagner Act.

The New Deal was all about stifling competition and creating uniformity -- precisely what a free market ought never to achieve. Absent vibrant domestic competition the Big Three atrophied and opened the way for imports. Rather than lament GM's demise, we should cry again for Hudson, Nash, Studebaker, Willys-Overland, Auburn, Moon, Packard, and the rest.

While the New Deal was unable to quash the great American spirit of enterprise, its legacy in the consolidation of several important industries has been terrific, especially in autos, steel, rail, and ocean shipping. Tack on to that the all-important subsidiary industries that have taken a beating as a result, such as machining, industrial instruments, etc., it's a wonder we've got as much an industrial base as we have. "Capitalism" (a word I hate) survived despite not because of FDR.

Btw, GM won't go bankrupt. It will, however, liquidate in the U.S., just short of bankruptcy. Doing so it can re-build in the U.S. without losing precious overseas operations which are performing generally well.

[knews_hound]

You confirmed what I already knew.

I have a friend who works for Xerox making 90K a year "fixing copiers".

I wonder how many that are reading this article make as much.

As for other service sector jobs are concerned, I make 45 bucks an hour for simply reading and writing reports.

But then, us burger flippers can be easily swayed

Cheers,

knews hound

http://knewshound.blogspot.com/

[Screaming_Gerbil]

How do you define: "standard of living"?

I would define "standard of living" as living comfortably without worrying that you may lose everything you have at any time.

At the extreme that means not worrying that you may lose your job and then lose your home and car and wind up living on the street or in a homeless shelter.

That said, I think many people have lost sight of what is really important (a roof over your head and food on the table, a car that runs and money for emergencies that may crop up) and have refinanced all the equity out of their homes to buy expensive toys (anything not directly related to the primary things necessary for survival).