Tough Times in Michigan

July 23, 2008 at 11:33 pm Leave a comment

There’s been a lot of talk lately about the faltering economy, deflating real estate market, and ever-increasing gas prices. But I think the DC metro area is still a bubble of relative prosperity.

I grew up outside of Detroit and my parents still live there. Earlier this summer, my younger sister, Erin, went home for about a month and a half to visit with my parents. She knew the economy in Detroit had worsened but her time there left a lasting impression. She said houses were for sale at every turn. Garage sales were almost devoid of customers. Major layoffs were reported in the papers on an almost daily basis. And she described suburban ghost towns where construction on new neighborhoods during more prosperous times had come to an abrupt halt, leaving just a couple of houses surrounded by dirt or vacant lots overgrown with weeds. After going to Detroit for the Red Wings Stanley Cup victory parade, Erin stayed in the city for lunch. When she left the restaurant at 3:00 in the afternoon, the crowds had already completely cleared. Almost no one had stayed to celebrate, shop, or grab a bite to eat.

The presidential candidates have recently focused a lot of attention on Michigan – acknowledging the state is at the epicenter of the country’s sinking economy. I think the root of those economic woes is the state’s incredible reliance on the auto industry. In a letter to the United Auto Workers yesterday, Senator Obama said he backed proposed loans and other aid to the U.S. auto industry. But that’s just a band-aid solution. Tough times are here to stay as long as U.S. automakers continue to produce gas guzzling vehicles and Michigan fails to diversify its economy and attract industries other than those in the manufacturing realm.

My dad has worked at Ford Motor Company for almost two decades and he says things at Ford have been “going downhill” for about half that time. Ford has heavily invested in trucks and SUVs and the bottom has dropped out of those markets given rising gas prices and increased consideration for the environment. In response, the company is trying to move to smaller, fuel efficient cars. Its European factories are already producing these cars and Ford needs its U.S. factories to start producing these models too. It’s taken Ford far too long to make this shift and I wonder whether its too late.

Luckily my dad weathered today’s round of cuts so he’s in the clear for a little while. But Ford’s penny pinching culture, moratorium on anything but the most essential business travel, lack of significant raises in years, and regular, unceremonious layoffs of long-time workers can’t be doing much for workplace morale. Here’s to my dad surviving until retirement… and “surviving” truly is the right word.


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