In Michigan's auto belt, it's nail-biting time
Workers and residents worry that one of the Big Three might not make it.
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Dan Dostine, a furnace repairman at Chrysler, is worried he may lose his $33-an-hour job, with few prospects for other decent-paying work in the area.
The mayor of Warren, Mich., is on pins and needles, wondering if his city's already-strapped budget will take a hit in the event that revenues from automakers – which make up 15 percent or more of the total – slide precipitously.
Much of America is watching to see if the ailing US auto industry will get the bailout it says it needs. But nowhere is the outcome more personal than in the factory towns of southeast Michigan, where nearly every job seems linked in one way or another to the auto industry, and where auto workers, suppliers, and retirees are biting their nails and assessing their options.
They're acutely aware of the negative perceptions of their industry – and in some cases are themselves critical, especially of top management. But many workers here harbor hope that, in the end, the rest of the country will come to sympathize with their plight or, at the least, decide that all the jobs on the line and the economic costs to America are too much to risk.
"If these companies go out of business, we'll lose a lot of the important jobs that give people a decent living and allow them to go to work with a smile on their face," says Warren Mayor James Fouts, whose city is home to the General Motors tech center, a GM powertrain plant, and two Chrysler plants, along with dozens of suppliers to the auto industry. "It's the little people who are going to be paying for this."
Tough economic times are hardly new to Michigan. The state has long been stuck in recession, has one of the highest foreclosure rates in the nation, and currently has an unemployment rate above 9 percent. But auto workers, even those who were around to see the previous tough times for the industry in the 1980s, say this is worse than previous downturns. And it's the first time they've seriously questioned if one of the Big Three might not make it.
Many wonder if the model they always counted on – where employment at an auto company and membership in the United Auto Workers Union was a ticket to a middle-class lifestyle and a secure future and retirement – is finally coming to an end.
"In the 31 years I've put in, this is the worst I've seen," says Ms. Kelly-Smith, a third-generation GM worker who retired a year ago, along with her husband. Together, the two earn about $70,000 from their pension, and Kelly-Smith isn't sure what she'll do if that disappears. Her husband recently had a stroke, and their home isn't yet paid off.
"I'd have to go back on the job market and compete with the young folks," she says. "I thought I was secure if I stayed there, and did a decent job, and kept my health – that when I did retire that's when the good years would begin…. It's so frightening to think that all the time you've put in can just be washed away."
Right now, GM is in the worst shape of the three automakers and appears unlikely to make it to January without help. Ford is the most likely to make it on its own, while Chrysler is the hardest to gauge, since it is owned largely by Cerberus, a private-equity firm, says Don Grimes, an economist at the University of Michigan.