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Friday, September 19, 2014 |  Madison, WI: 54.0° F  Fog/Mist
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General Motors: The death of the auto industry in Wisconsin
From promised land to graveyard, more than just jobs are lost
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My maternal grandfather, an unemployed industrial worker in St. Louis, brought his family 350 miles northward to the promised land of southeastern Wisconsin in a crowded railroad boxcar. It was about 1917, when my mother was 3 or 4.

Wisconsin offered plenty of factory jobs, and my grandfather eventually found a niche on the assembly line at the American Motors plant in Kenosha. He worked there for more than 30 years, as a proud member of United Auto Workers Local 72.

For southeastern Wisconsin, the auto industry became a foundation of working-class prosperity and power, producing excellent wages and benefits that allowed thousands of workers to send their kids to college, secure a stable retirement and develop a strong voice inside the plant and in Wisconsin politics.

I came to fully appreciate this power when I edited the Racine Labor weekly newspaper from 1979 to 1993.

Autoworkers, I saw, used their collective clout not just for their own betterment but to promote broader economic justice, expand educational opportunities for workers' children, fight for civil rights and oppose U.S. intervention in Vietnam and Central America. And my own brief stint at American Motors made me appreciate the grueling demands of the assembly line endured by my grandfather, uncle and several cousins.

In recent years, however, Wisconsin has become a graveyard for family-supporting blue-collar jobs, with the auto industry taking the hardest hits. Globalization has gobbled up tens of thousands of jobs, many to low-wage, high-repression nations like Mexico and China.

Chrysler's Lee Iacocca struck a particularly devastating blow in 1988, after Chrysler bought American Motors and then broke its pledges to the state and UAW Local 72, ending auto assembly in Kenosha and wiping out 5,500 jobs. (The year before, Iacocca's personal compensation was $17.9 million.)

Now, the sword of Damocles is hanging over General Motors' Janesville plant, which currently employs 2,800 workers and is the economic heart of this city of 60,000. On June 3, GM announced plans to close its Janesville plant, which makes medium-duty trucks and Tahoe Suburban and Yukon SUVs, by 2010, along with facilities in Oshawa, Ontario; Moraine, Ohio; and Toluca, Mexico.

About 850 Janesville plant workers are expected to lose their jobs this summer. And last week GM announced that the plant will be shut down for a total of 14 weeks beforey the end of the year.

For Wisconsin, it's about far more than jobs. The decision of the automobile industry to take our money and run represents a profound betrayal.

Bad decisions

The announcement ignited immediate outrage in Oshawa, where Canadian Auto Workers had just signed a new agreement. CAW members have blockaded management offices in Oshawa, and used a slow-moving motorcade to prevent trucks from entering or leaving the facility.

In Janesville, the announcement has spurred outrage from among UAW Local 95 members and public officials. The Harbour Report, an industry survey, ranks the operation there as the second most efficient SUV plant in the world.

"It will devastate the community, with something like 5,000 or 6,000 jobs affected," warns state Sen. Judy Robson (D-Beloit), who has been central in lining up state assistance for GM, like a $17 million freeway expansion to give the corporation faster access to the Interstate.

Over the last two decades, according to Robson's office, the state of Wisconsin has provided GM with nearly $34 million in subsidies. This includes an $8.25 million check presented by Gov. Tommy Thompson to CEO Roger Smith in 1990. The previous year, GM had posted profits of $4.8 billion.

Robson recalls bitterly how top GM executives traveled to Janesville on Feb. 13 during a visit by Democratic presidential candidate Barack Obama. The officials were "upbeat" and heaped praise on the workers for their dedication and productivity.

By almost all accounts, the shutdowns owe to GM's stunningly shortsighted policy of trying to prolong - beyond all reason - the production and sale of low-mileage, high-profit SUVs. The huge profits GM earned from SUVs and trucks in the late 1990s were not reinvested into developing a broad range of new high-mileage products for plants like Janesville,but instead were used to enrich top executives and big stockholders.

"GM has a CEO making $15 million, and you would think that they would have a five-year plan and a 10-year plan for new low-mileage vehicles," says Robson. "Instead, they just kept making SUVs as gas went up to $4 a gallon, and they just ran the profits down to nothing and then said 'Bye-bye.'"

As a token step toward ending dependence on petroleum, GM developed an experimental electric car called the EV. But as the makers of the documentary film Who Killed the Electric Car? persuasively argue, GM undermined the car's potential popularity, failed to make available improvements on the EV prototype, and finally repossessed and destroyed every EV in existence.

At its peak in 1978, GM's Janesville plant employed about 7,100 people, 90% of them UAW members. But this ebbed in the 1980s, and, in the 1990s, GM built a plant making the same products as Janesville in Silao, Mexico, where wages were less than 1/10 of those in the U.S., but substantially hiked the prices of Chevy Suburbans anyway.

The Janesville workers and community were thus victimized by GM's fixation with maximizing quarterly profits and placing virtually all of its chips on low-mileage vehicles.

And it's the workers, not the executives, who will bear the brunt of these bad decisions.

Amy Loasching, president of the Janesville City Council and a 22-year member of UAW Local 95, notes that union members made painful sacrifices to cooperate with GM, like accepting a smaller workforce toiling at a speeded-up pace.

"Our members jumped through every hoop, but it didn't count," Loasching says. "It's disappointing that it doesn't matter to GM how well the workers do. People came into this plant generation after generation, and they take a lot of pride in what we produce. We have a great workforce."

Local 95 President Brad Dutcher, who took office just two days just before the closing was announced, argues that the union's history of sacrifices and current contract with GM obligates the firm to provide work to Janesville until at least 2013: "GM made some commitments in the national agreement, and the union feels that it can't pull away from Janesville until the current product cycle is over."

UAW Region 4 director Dennis Williams agrees. "GM has an obligation to the Janesville plant, and closing it is contrary to the contract and the commitment they made to us," he says. "They have made a contractual commitment to keep that plant open."

The union, says Dutcher, is "trying to design a new contract that will draw a new product line here." It's an effort joined by former state senator and state agency head Tim Cullen. The pair plan to lead a delegation to Detroit next month to urge GM to keep the Janesville plant open.

Going down fighting

Shortly after Iacocca announced the closing of the Kenosha Chrysler plant in January 1988, I attended a packed UAW Local 72 meeting on a frigid day. The workers' defeated body language spoke volumes. Some slumped forward, their heads despairingly cupped in their hands; others sprawled back listlessly, like their spines had been removed.

There was no flame of resistance. In fact, there was barely a flicker of life visible among the throng of nearly 3,000. The workers had set a Chrysler-wide record for error-free production two weeks before, but now their craftsmanship and productivity were being rewarded with the announced loss of their jobs.

Four days later, then-presidential candidate Rev. Jesse Jackson came to Kenosha to address a street rally. Some 8,000 to 10,000 workers and supporters gathered against the shutdown under a giant Chrysler overpass.

Despite the numbing near-zero temperatures, Jackson had an impact on the workers that was nothing short of electrifying. The zombies of a few days earlier were transformed into shouting, stomping participants in a campaign to reclaim their jobs and their community. It was one of the most transformative moments I have ever witnessed.

Interestingly, Jackson played neither the uncritical champion of the workers nor the voice of personal vitriol against Iacocca. Instead of going after the Chrysler CEO as an individual, he blamed a pervasive pattern of "economic violence" destroying family-supporting jobs and depressing industrial communities. And rather than urging the workers to look at themselves as helpless victims, he urged them to form a cross-ethnic and cross-class "quilt" to create a more economically and socially democratic America.

The Chrysler shutdown in Kenosha was part of a three-cornered move that ultimately transferred thousands of jobs to Mexico. Chrysler shifted Kenosha's Omni and Horizon production lines to Detroit, wiping out 5,500 jobs locally; it transferred Detroit's manufacture of the Reliant and Aries models from Detroit to Toluca, Mexico. About a year later, the Omni was also shifted to Mexico.

If GM proves recalcitrant about its plan to close the Janesville plant, the union is ready to escalate. Vows Local 95 President Dutcher, "If we go down, we're going to go down fighting."

Janesville and the state, he stresses, have too much to lose.

"If GM leaves, it will hurt far more than most people are willing to admit - there is just no source of comparable jobs," says Dutcher. "Also, the workers at GM are the largest contributor to nonprofits in the area, providing 25% of United Way revenue, help to food pantries. There isn't a nonprofit in Janesville that doesn't rely on our contributions."

Council president Loasching agrees that a GM shutdown would leave Janesville economically polarized. Workers cast off by GM will find themselves scrambling to survive.

"The workers who stay here will be living at a much lower quality of life," she predicts. "There will be a much larger divide between rich and poor, and the middle class will be a far smaller group of people."

To soften the blow of job losses, the UAW has negotiated a variety of programs: supplemental unemployment benefits, early retirement bonuses and job buyouts of workers with 10 years or more seniority. But, as Loasching notes, such Band-Aids are no substitute for a steady, well-paying job.

"In some instances, it has worked out, like when people were already going to school on the side," she says. "But some people thought they'd be paying off their debts and living stable lives, but their family situation changed, and they hadn't planned for it. So some are waitressing or looking for another job."

Against all odds

The UAW's struggle to save the Janesville plant - and several thousand more jobs at local supplier plants like LSI, Lear Seating and Gilman - will hinge on its ability to persuade the broader community of its shared interest in the outcome. The union must win over middle-class, college-educated groups like teachers, social workers, the clergy and public employees.

That won't be easy. In Kenosha, I sensed that many white-collar professionals harbored deep resentment over Chrysler workers' use of collective union power to win substantial wages. "I really think the plant closing is to the benefit of the people and their children," one alderman remarked.

Finally, the union will have to overcome a constant barrage of news coverage that drives home the notion that resistance against GM by puny mortals is futile, and that workers and the community must instead adopt "adjustment" strategies to draw in smaller employers and diversify the economy.

The June 8 Janesville Gazette carried two front-page stories under the headline, "Rebound Towns." The articles claimed Kenosha's economy was "rebuilt" after the Chrysler shutdown and that a "public-private partnership helped Beloit survive loss" of the Beloit Corp.

But such happy fables of "turning lemons into lemonade" are heavy on inspirational quotes from conservative economists and public officials and skimpy on details about the fate of the workers. For example, after a much-heralded $9 million training program for ex-Chrysler workers in Kenosha, 60% ended up with jobs paying the equivalent of $28,000 a year or less, and 20% remained unemployed after three years.

Richard Keehn, a retired UW-Parkside economics professor, counsels Janesville to "follow Kenosha's lead and not try to force General Motors to stay," adding, "I don't think they should waste the time trying to do that."

In fact, even Gov. Thompson and other conservative public officials threatened Chrysler with a lawsuit, and UAW Local 72 waged a seven-month national campaign to hold Chrysler accountable to its promises to the state and workers.

The result of this "waste of time" was a record-size plant-closing agreement that provided $220 million in funding for retraining and other benefits, along with a now-expired commitment to keep 2,000 jobs making engines in Kenosha.

End of the line

On a gray, bone-chilling day in December 1988, as the last auto rolled off the line in Kenosha, I managed to sneak past heightened security into the cavernous plant. I vividly recall the tearful hugs that workers exchanged, and the overwhelming sense of defeat that hung in the air. The giant machines that moved autos down the assembly line, emitting showers of sparks and loud scraping noises, became eerily silent and ghostly, and a deeply rooted way of life was permanently ending for 5,500 workers and the community.

Although a number of small manufacturers have located in Kenosha's new industrial parks, and Kenosha has actually topped the state average in job growth, the vast majority of jobs added there since 1990 are low-wage, according to UW-Milwaukee's Center for Economic Development. The city's child poverty rate doubled from 13.3% in 2000 to 26.3% in 2005.

U.S. Census data show Kenosha County's poverty rate climbed 37% between 1999 and 2004. And almost 45% of workers in Kenosha County work outside the county, mainly in northeast Illinois.

Kenosha is now a far more economically polarized city. Instead of the union jobs at Chrysler lifting up wages throughout the community and creating a sizable middle class, the supply of "middle-income" jobs in Kenosha has shrunk in recent years, and more families are subsisting on low-wage service jobs.

The familiar recipes of "retraining" and "diversification" obscure rather than clarify what Janesville needs at this moment, says the UAW's Williams.

"I think that anytime a community can diversify its economy, that's good for the community," he says. "But when a big unionized employer is lost, many small service-sector jobs are lost, and many supplier jobs are lost, too. It makes good sense to diversify, but it doesn't replace good-paying jobs."

As for retraining, Williams asks, "Training for what? And at what pay? What impact does it have when a worker goes from $27 an hour to $10 an hour? Those are some questions that society has to ask. Society has to turn that corner and deal with issues like these in this 2008 election. Otherwise, we're headed toward a Third World-style social structure."

Ultimately, consumers who buy cars have some say over the situation, because they can choose not to do business with companies like GM. Williams isn't calling for a boycott, at least not yet. But he hardly holds up GM as a model corporate citizen.

"GM obviously doesn't mind investing in China when they ought to be investing in the U.S.," he says. "You can't have it both ways, wanting all the protections of the U.S. and then deserting this country."

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