Contact: Alex.Karoub@gmail.com
This post is a brief overview of the Automotive Industry which describes some of the fundamental problems that are rarely spoken of. In addition, you will learn of a few of my personal experiences growing up, an environment where I was surrounded by the industry; you will learn of a few perspectives that are shocking and that even only a few within the industry know of. At the end of the post, you will better understand what happened to American Manufacturing and where it stands. The Auto Industry is at the heart of all of American Manufacturing. It is an industry that laid the groundwork for many other types of industries to follow, deemed at one point in history to be the highest of successes. But now, it sheds light on what can become warning signs for other businesses that mistakenly try to imitate it.This months hot topic is whether to bailout/rescue the regressing American Auto Industry. The original owners and their successors abandoned that industry long ago. The auto industry was ravaged and plundered by the wealthiest Americans a half century ago and has been in decline ever since. Shortsighted greed from one generation to the next has been the culprit. Since autos were first mass-produced and America monopolized the world, it was only natural that the American percentage/share of the market would eventually be reduced. However, total growth was enormous and total size of the market continues to grow even through today. Therefore, American growth of exports should have continued to grow, but does not significantly due to pillage and poorly planted roots. In simpler terms, we originally owned the entire pie. The pie was split up. Since the entire pie has grown dramatically, our piece should have grown too. However, the Big 4, 3, 2, … have been loosing market dominance and lead since the end of World War Two. Here we are years later in crisis, and the real question remains whether or not to rescue the real victims of the auto industry, the workers. People were not retrained or re-educated; most were never afforded real education's to start. People are now in despair and hopelessness. From my vantage point now living in Colorado for the last two decades, I have seen the high tech industry follow the auto industry, but at a learned and accelerated rate. Other industries are also copying the auto industry and are laying similar foundations also headed for disaster. Going back to a brief history, the misguided roots show how the decay started and why it spread.Although I did not grow-up during the inception of the Auto Industry, its roots surrounded me. I spoke with a few who were there in the earliest days, and spoke with many who were of the following generation. I absorbed its history by studying it while attending school in Motown (Motor Town), by natural osmosis, and in my earliest career dealing with the car makers.Growing up as a kid I lived less than a mile from Henry Ford's first moving assembly line factory, with GM’s World Headquarters’ just three miles away, and with Chryslers World Headquarters at the end of our street. The first Ford plant (in Highland Park, a city now surrounded by Detroit) and the first of GM's plants were built on the importation of the next generation of former black slaves and white share crop workers from the south (whites similar to former slaves whose white necks were red from working in the sunny fields, hence the mean spirited term 'Redneck'). The joke that Henry Ford must have laughed at and that went around town was "each worker would get paid enough to buy a Ford" (Of course using infamous 'Ford Credit' which was a primary direct withdrawal from their pay checks.) Henry manipulated a built-in guaranteed customer base and tapped double profits, being profits on the cars and the profitable bonded interest. Those were scams that he copied from sharecropping. The remains of their wages were so low that they had to live in shacks; but after all Henry felt, they came from shacks near the fields in the south. So much bigotry and repeated methods from sharecrop economic slavery. Instead of updating and rebuilding the original plants and without regard for the people who were the workers, the emerging auto giants left to go further to the suburbs. So, as they moved and grew they imported shipload after shipload of immigrant economic slaves from Poland (to Hamtramck, MI) and more economic slaves from the Middle East (to Dearborn, MI). There were other minorities imported as well, also imported for economic servitude to supporting industries such as mining, iron works, steel fabrication, glass works, textile, …. Astonishing how easily the game of 'divide and conquer' worked upon the variety of minorities; a game of keeping the workers pitted against each other using race and ethnicity; all to hold back the power of the people from truly uniting. WW2 caused the Automakers not only to retool but also to reevaluate their future directions.Soon, after the victory of WW2, came the Auto Giants grand visions for economically conquering the world via expansion outside the U.S. They quietly boasted that that would leave mainly world headquarters executives, designers, and engineers in the U.S. with the prestigious white-collar jobs. It was felt then (and these are not my bigoted opinions, not from me, yikes) that after all even 'the weaker sex' could do factory labor jobs as seen during WW2 (i.e. Rosie the Riveter). So why not have the 'stupid foreign workers' do the labor outside the U.S. What also gave way to the idea that manufacturing could succeed outside the U.S. was Mexico; since Mexican workers were also imported, but only temporarily during WW2. (By the way, the temporary Mexican workers were never fully paid back as promised during WW2.) A tremendous wave of pride about white-collar jobs became very popular in Detroit and in other automotive communities during the 50's. That vision sat poised on the back burner, but a pre-planted seed was already in place, which was Canada (Windsor) just across the Detroit River. Canada was a much-desired orchestrated precedence for the automakers; it set the stage for grace given by the government as an easily set up protocol for off-shoring jobs. Soon after, the automakers made a migration south to other states, then further south to Mexico, and finally overseas and on to economic slavery in China.Today we see the results of the destructive path the industry has taken. Layoffs, instead of being temporary situations reserved for pauses during new model changeovers, eventually became the mark of permanent labor plant closures. Obvious abandonment of people soon became the name of the automakers game. Along the swathed trail are - Highland Park, Detroit, Pontiac, Flint, Marquette, Gary Indiana, Pittsburgh, Toledo, Cleveland, …, which became known in the early 80’s as 'The Rust Bowl’. Sort of a rape, pillage, and burn mentality, which continues to today. Amazing how well the reasoning of "that's the way it's always been" persists and grows from one generation to the next. Excuse after excuse gave temporary reasoning to incremental geographic movements for global conquer. Temporary excuses ranged from the need to originally amass large workforces, to the hindrance of union pressures, to American workers are lazy, to 'over' government regulation, to …, all straw obstacles as to why the auto industry needed to move as it did. No! Greed is not good. We see how those at the top of the industry have each come in, grabbed with their greed, and left. Now today, we see how greed has caused "what once was, no longer is". So in short, now we see the results of greed, poorly planted roots, and disregard, taking its toll on America. Equally, is the toll on the myriad of unrelated businesses, old and new, that have adopted the auto industries infectious habits of having little to no regard for individual people that make up the American workforce. People.While being raised in the center of Detroit, I experienced many situations involving the Auto Industry; the following although early was not my earliest, and is an actual example. Around 1963, when I was 11 years old, I remember George Romney visiting our house to exchange political favors. Our 23-room house was a rundown relic of a past era, but it cleaned up well as a phony front for wealth and pretentious power. I remember we kids had to pretend that we were Christian Protestants for the visiting Governor (former Chairman of AMC) who was doing his Christian Mormon tradition of visiting the homes of his new legislators. How ostentatious they both were with fraudulent humility of how they rose from their humble beginnings. But more to the point, I remember Romney sitting at our dinning room table and saying "The Big Four Automakers don't have to worry about giving the Unions what they want, as long as the benefits will not be due for decades. By that time the labor plants will be outside the U.S." That shocked my brother Jimmy and I, as we listened playing in the sunroom just off the dinning room. Later we were once again physically punished (beaten-up), this time for listening to adult talk. Jimmy a year older than I, and intellectually gifted, soon became a Page at the State Capital. The accounts he returned with were shocking as well. Growing up as we did would make your head spin and open your eyes to disgust. We continued living in those surroundings until we grew out of our teens. Then we moved on to make our own adult lives, creating better environments much different from what we were born and raised in.Recalling back to my teens, I realized back then the Detroit riots were not only about race, but was also about economic oppression. It was the minorities who were oppressed the worst, most especially African-Americans. Bad however you measure it is bad. (For a better understanding of the decline of Detroit and to better understand the riots, take a look at my other post: “DETROIT RIOTS OF 1967, A RECOLLECTION OF THE TRUTH.” You will also better understand how very close we came to seeing a nationwide repeat of the riots in the coming Spring of 2009.)Unions, workers, man-hours, laborers, …, are not people, they are burdens to be minimized and eliminated. While watching Lee Iacocca being interviewed on Charley Rose last year, I noticed Iacocca admit that he new all the way back during negotiations with the unions, in the early 80’s, that Chrysler would never have to pay off in full on long term commitments to the unions. As Iacocca danced around the issue he said "now the unions will have to face reality". And, as Rose went on to discuss it more, Iacocca was getting more uncomfortable, and eventually managed to change the subject away from discussing past union negotiations. Iacocca was a bit slicker than George Romney was, since Iacocca was on national TV. It made me ashamed that Chrysler World Headquarters was at the end of our street when I was a kid. And, that as a young adult I had so proudly in my early career returned while working for a couple of electronics companies to Chrysler's World Headquarters R&D operations. I thought it an honor to have paid Iacocca's in-house barbershop to cut my hair, even his same barber. Some honor.Following Chrysler, I moved up to deal with GM, and was puzzled. I listened to upper executives at GM complain that they constantly had to bribe Mexican government officials and border guards for GM plants. I guess they also assumed I already new and accepted that the plants in the late 70's had already begun their exodus to Mexico and other countries. I have always looked at bribery as disgusting and wrong, it was not for me or those who I dealt with, that's among the many good things that a mentor named Jack Bazzy taught me as a young kid. By becoming acquainted with other mentors as an adult, I learned to seek out highly reputable employers and quality knowledgeable friends. I learned how to educate myself, and moved up very high in the scientific and technical industries, all of which I enjoyed.Although I grew up in Highland Park / Detroit, that was not anywhere near my top focus in choosing Obama. But, it is a simple history for me to recall, amazing how many more details I can give, but the main points have been brought forward. In addition, from being a mutt of sorts myself, to being a self made man, be that what it may, I have no illusions of being great. What I do mean here is that I quickly recognize many of Obama's unique insights, although mine are different but a bit similar in nature. Like many Obama supporters, I have personal experiences on most issues Obama has raised. So, above is just one of many examples that I can personally give.To better understand manufacturing in America, you can read my other blog: WHAT SCREWED UP MANUFACTURING FOR AMERICA
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