THE AVENUE OCTOBER 19, 2009
Over 140 economists, researchers, Michigan and Ohio state and local officials, business and non-profit leaders recently camped for two days at the Detroit Branch of the Chicago Federal Reserve Bank, to review--in ghastly, numerical detail--the economic and human toll of the collapse of the auto industry, and to vet any and all approaches to aid dislocated auto workers in response.
Overall, the atmosphere and information was grim: Huge job losses in auto-dependent communities, significant human and community suffering, and maddeningly small increments of opportunity for those that have been thrown out of work.
Despite all the gloom and doom, there was still a bit of wishful thinking in the air, that for me (as one working in Flint, Lansing, and Detroit, Michigan for 20 years) underscored the now bi-polar Detroit and auto community attitude towards its once-dominant, sugar daddy industry.
While historically standing four square behind the Big Three and the UAW--and fighting valiantly for whatever was in their self-professed interests--the cold shower of having now lost more auto-related jobs over the past decade (600,000) than are left in the region (400,000) places Detroit (and similar places) business, civic and political leadership in a very conflicted position.
Half the brain is still rooting for another comeback, hitting the end of the bungee cord and industry freefall. The other half of the brain is realizing that, finally, maybe the years of talk of “diversification,” embracing new sectors, and riding new economic ponies, is not only necessary, it may have already arrived as a fait accompli.
This schizophrenia regarding the future was on display in the presentation by CAR (Ann Arbor’s Center for Automotive Research). While replaying the same grim job loss and market share numbers as other conference economists, Kristen Dziczek noted that there will still be a giant need for new cars (and auto industry salvation?) because Americans weren’t really changing their behavior and embracing transit, bikes, or other options--the same 87 percent of Americans who drove to work in 1987… were still the 87 percent of Americans driving to work in 2007 and not much has changed since.
Discussion led to a collective confession--yes, the industry, leaders in the auto-impacted region, (and I would argue the nation) had not really, really made the Apollo-like commitment to a green economy yet, that might finally drive the last “clunkers” off the road, while also galvanizing the interests and passions of new generations of young people, looking for their “save the world” project, and hoping for (but not yet finding) it in Detroit.
The day illustrated the biggest challenge we in Detroit and auto country face--a culture weaned and raised (and now retired) on one industry, and the still flickering hope that this dominant industry and its associated way of life will remain, or can somehow be brought back from the near-dead.
As both Detroit’s Dave Egner and Cleveland’s Brad Whitehead, who head similar regional philanthropic efforts designed to aid the economic transition, noted, it is awfully hard to encourage education and lifelong learning in communities that got used to good incomes with a high school education. Cleveland’s Fund for New Economic Future CEO Brad Whitehead put it succinctly: “culture eats strategy for breakfast.”
The best presentation in my view (and ironically for a Michigan man) came from Ohio State economist Mark Partridge who said that helping create new work for auto and parts assemblers making energy components and medical devices and the like was good, but the numbers will come slowly and not come close to matching the dislocations of the moment. “All auto communities can do to best influence their economies is focus on the basics: providing an attractive quality of life, productive workforce, good infrastructure, and efficient government that reflects the 21st century.”