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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Any viable plan would probably mean cost-cutting and restructuring of labor agreements – one advantage that bankruptcy might hold. But there is concern that consumers wouldn't buy cars from a company in bankruptcy. "If the federal government were to guarantee the warranty of any car company in bankruptcy, that might alleviate the fear," Professor Grimes says.Skip to next paragraph
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If GM, Chrysler, and Ford were to go under, nearly 3 million jobs nationally would be lost, estimates one recent study by the Center for Automotive Research, a research group based in Ann Arbor and with ties to the auto industry.
Few expect such a dire scenario, but the consequences appear very tangible in this part of Michigan, where the centers of towns are the large factories and where most of the economy depends either on the auto companies directly or on the money spent by their workers.
"We'd be out of work if they go under," says John Teipel, a driver for a furniture company based in Warren, sharing a drink in Malone's with some friends. "We're scared. I don't want to lose my house. I've got a family."
While just about everyone in Warren wants the auto companies to be rescued, many share in America's anger at top executives who they believe mismanaged the firms, earn too much money, and sent the wrong message when they flew to Washington in private jets. "You don't get off your private Learjet with a tin cup," says John Cicala, a longtime Chrysler worker, expressing a common sentiment.
Still, one of the hardest things for people here to understand is the anger they see from the rest of the US that is directed at the workers themselves. Many are bitter about the quick bailout provided to Wall Street firms, while the auto companies are put under scrutiny and kept waiting.
"I saw a poll saying 57 percent believe the Big Three shouldn't be bailed out," says Ghana Goodwin-Dye, president of UAW Local 909, which represents workers at GM's powertrain plant in Warren. "AIG gets money and they go party. We ask for a loan, and they say, 'No, the UAW has to give up something.' "
Already, she notes, the UAW has renegotiated contracts allowing new workers to start at about $14 an hour and receive a 401(k) instead of pension benefits. "If we give up any more," she says, "there's nothing left."
Ms. Goodwin-Dye, a single mother of three grown children, says she's been through tough times before and has been laid off five or six times, when she got second jobs to help her pay bills. During those times, the Jobs Bank – one of the most criticized UAW programs, in which laid-off workers continue to get paid most of their salary – helped her out and gave her the security to know she'd eventually be hired back when the companies rehired.
"I hate that the public believes we don't earn what we make," she says, adding that the fights the UAW has won have helped improve conditions for all workers. "This work is grueling on your body. I wish they could stand in our shoes just one day."
• Staff writer Mark Trumbull contributed to this report.