POLITICS
No Help In Sight For The Auto Belt
Obama lacks a convincing strategy for reviving the communities sinking with the auto industry.
Grants for extended unemployment benefits, money to hire police officers, enlarged credit lines for small business, federal dollars to research clean diesel engines: These were some of the consolation prizes that Obama administration officials offered this week as they swarmed across Midwestern communities rocked by Monday's General Motors bankruptcy.
All are worthwhile interventions. But they don't compose a convincing strategy for stabilizing, much less reviving, the fraying auto belt. Without more-ambitious thinking, the communities across the Midwest that rose with the auto industry in the 20th century will continue to fall with it in the 21st.
The places that the auto companies are abandoning may never recover.
The GM bankruptcy, following the reorganization of Chrysler, is hitting metal-bending states like a natural disaster. GM announced on Monday that it will close or idle 17 U.S. factories through 2010. Earlier, Chrysler said it would close eight factories through the end of next year as part of its shotgun marriage with Fiat. In Michigan alone, the two companies are shuttering 10 plants. All this, of course, follows years of relentless contraction by the U.S. auto companies.
Both the Obama administration and governors in the hardest-hit states have scrambled to respond. Michigan Gov. Jennifer Granholm has been especially energetic in concocting programs to help communities adjust, including an innovative effort to enable auto-supply firms to diversify into other industries, from defense to clean energy. Administration officials, as this week's tour showed, are aggressively channeling aid from existing programs.
These initiatives can claim some progress. Granholm this week visited a former auto plant in Pontiac that is slated for an extreme makeover into a Motown film studio. On Tuesday, Labor Secretary Hilda Solis announced that Washington will provide $500 million to train workers in scuffling communities for clean-energy jobs.
But these efforts, while well-intentioned, don't approach the scale of the problem; they are thimbles when the rain is falling in buckets. "Our existing job-training programs are very small, and it's not clear what you retrain people for anyway if you don't have an economy that is diversifying out of autos," says Robert Reich, Labor secretary under Bill Clinton.
Reich, now a University of California (Berkeley) public policy professor, prominently backed candidate Obama in 2008. But Reich believes that Obama has significantly miscalculated by injecting $50 billion directly into General Motors, while allocating little new money to help the communities that have depended on GM to rebuild through such programs as tax breaks for relocating companies or seed capital for start-ups.
The federal money that Obama has provided GM prevented a liquidation that surely would have disrupted even more lives. Yet, as some in the administration itself recognize, Reich is right to worry that without new approaches, the places that the auto companies are abandoning may never recover.
For officials at every level, the great hope is that these fading car towns can move from rust to green, from building autos to manufacturing wind turbines and solar panels or buses and subway cars. These places offer many advantages for such production: factories, supply chains, transportation links, and a skilled workforce "that knows how to do metal," as Democratic Sen. Sherrod Brown of Ohio says.
But there are few examples of such conversions succeeding in the auto plants already closed, notes Dan Luria, research director for the Michigan Manufacturing Technology Center, a government-business partnership. And although Obama's policies ensure that the U.S. will buy more alternative energy and transit equipment in the years ahead, Luria says, there's no guarantee that those products will be built in America, much less in these particular communities, unless Washington encourages it through an integrated set of carrots and sticks beyond anything under discussion. Brown, likewise, is urging a national manufacturing policy.
In a creative first step, the Obama administration is exploring ways to use the bankruptcy process to facilitate the sale of the plants that Chrysler and GM are shedding. But this challenge will demand even more iconoclastic thinking. Before World War II, Walter Reuther, the United Auto Workers' visionary founder, suggested converting the auto assembly lines into the arsenal of democracy by building 500 planes a day. After the war, as his biographer Nelson Lichtenstein recently noted in The Nation, Reuther proposed using surplus war factories to manufacture homes and rail cars. To revive the families and communities sinking with the auto industry, someone needs to think on that scale again.
Previously in Political Connections
- Can Congress Step Up On Security? (05/30/2009)
- California Ballot Tremor Could Shake Obama Coalition (05/23/2009)
- Business Climbs Aboard (05/16/2009)
- Jack Kemp's Lesson (05/09/2009)
- Coalition Or Club? (05/02/2009)
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