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Michigan Autoworkers Face Uncertain Future

November 21, 2008 at 6:30 PM EDT
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Prospects for extending a federal rescue package to Detroit's Big Three automakers remain unclear after a congressional effort stalled until December. Paul Solman speaks with autoworkers about how the crisis is affecting them.
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JUDY WOODRUFF: Now, back in the U.S., how the men and women who work for the auto industry see its troubles and plans for the future.

It was an especially bad week for the big three. They failed to persuade Congress to give them a loan, at least for now.

And then today’s announcement, amid falling sales, that GM will extend its seasonal plant closings.

We sent our economics correspondent, Paul Solman, to visit a GM facility in Michigan this week to see how life there has changed.

PAUL SOLMAN, NewsHour economics correspondent: A jewel in the rusting crown, a GM assembly plant in Lansing, Michigan, built in the heart of union country just two years ago.

Congress has given GM until Dec. 2 to make a new case for why it should be saved. And this plant could be Exhibit 1-A, evidence that the company can finally compete with anyone in the world.

Exhibit 1-B, a nearby GM plant that makes the Cadillac CTS, brought here to show to us.

HEIDI MAGYAR, GM communications manager: And this year, it was the 2008 Motor Trend Car of the Year.

PAUL SOLMAN: Highly rated crossovers, SUVs built on car platforms, are made here and sold all over the world.

HEIDI MAGYAR: The GMC Acadia goes to the Middle East. The Buick Enclave is shipping to China.

PAUL SOLMAN: Heidi Magyar handles plant media relations.

HEIDI MAGYAR: The Buick name plate in China is huge. It dates back to the days of the emperor. The emperors drove Buicks.

PAUL SOLMAN: And the Michigan plant that makes these still-selling vehicles has snagged the industry’s top manufacturing awards.

Earlier this week, the big three higher-ups had stated their case before Congress. They didn’t exactly succeed.

So we went instead to the factory floor to hear how the somewhat-lower-downs would make the case.

Brian Fredline is president of the union local.

BRIAN FREDLINE, president, UAW Local 602: We’ve got great products coming out in ’09 and 2010. You may as well consider GM to be a start-up company and we need a bridge loan to meet the contractual obligations until we get our product to market.

Perceptions about quality lag

PAUL SOLMAN: The case for what Barack Obama has called the "bridge loan to somewhere" could start with the plant itself. It's new, clean and green, from the on-site employee-maintained wildlife preserve to the award-winning plant itself, with energy-saving lights that dim at every break, skylights that double as smoke vents, rainwater vats to run the lady's bathrooms, no water at all conveniences for the gents.

But the most noticeable novelty may be the labor management harmony, embodied by plant manager Randy Thayer and union head Steve Bramos.

These men work cheek by jowl in a hierarchy stretching as flat as the camera can see.

STEVE BRAMOS, chairman, UAW Local 602: Adversarialism creates barriers. We don't have time to spend tearing those barriers down to accomplish and achieve what we need to, to survive.

PAUL SOLMAN: All this, plus prize-winning cars, and yet GM has lost market share year after year for decades. So why?

RANDY THAYER, GM Lansing plant manager: Unfortunately, the perception about quality lags considerably. And, by the way, it lags in both directions. If your quality is going down, it will take time for the general public to actually recognize that that has happened, but it takes also time when it's going up.

PAUL SOLMAN: And if it can't buy that time, GM is staring death in the face. Brian Fredline was just back from lobbying Congress for life support. His pitch?

BRIAN FREDLINE: I think we've got a national security interest; I really do. You know, we've heard in the campaign -- for the last two years, we've heard, "Let's reduce our dependency on foreign oil, and let's build green vehicles. Let's build hybrids; let's build hydrogen."

And we're saying that we're going to leave that national security interest in the hands of foreign automotive manufacturers, we just can't do it in America, we just can't invest in a domestic auto manufacturer because they don't have the tools or the talent? I don't believe that.

Automakers need time

PAUL SOLMAN: Besides, if the government is going to bail out the Wall Street paper-pushers, as Fredline calls them, why not GM?

BRIAN FREDLINE: Take the money away from AIG. Let's see how well they do. You shouldn't spend $50 billion on bad paper and then expect not to invest $25 billion in an auto manufacturing company that actually produces a product and creates jobs. What's wrong with that?

PAUL SOLMAN: Well, what's wrong with that is the company is burning through lots of money, losing money.

BRIAN FREDLINE: I'm not sure GM has done anything wrong. They responded to the marketplace. When the marketplace had confidence that gas prices were going to be low, we sold Suburbans, we sold Tahoes, we sold crossovers, we sold trucks, and America wants to buy them.

PAUL SOLMAN: But that, say critics, is a large part of the problem, that GM was impervious to global warming, the likelihood that oil would shoot up in price.

BRIAN FREDLINE: If you're an automotive manufacturing facility, you can't just, you know, switch from bread to muffins overnight. You know, GM is responding to it, and they've got the R&D. They've got the tools; they've got the technology. All we need is the time to catch up.

PAUL SOLMAN: On the factory floor, where problems are signaled by tunes, not sirens, teams of workers can do any job on lines flexible enough to assemble almost any vehicle.

Deb Villegas is a training supervisor. Two of her sons serve in Iraq.

DEB VILLEGAS, training supervisor: I'm asking in return from those taxpayers the benefit of their understanding that we all benefit from us being strong, from our manufacturing base being strong.

PAUL SOLMAN: You're beginning to choke up. Is that because your son's in Iraq, or because of how strongly you feel about manufacturing, or your job, or all three?

DEB VILLEGAS: All of it. The loan that we are asking for is less than two months' worth of the war in Iraq. It's less than that, and we're asking for a loan. We're not asking for a bailout.

Inaction will cost government, too

PAUL SOLMAN: From line to line, from worker to worker, the appeal echoed: for money to save the new GM and those building it.

AUTOWORKER: We represent so many more jobs. If we go down, how many more jobs are going to be affected by that?

AUTOWORKER: And, of course, the state would have layoffs, as well, with the loss of tax revenue. There's a huge impact to the entire country, not just to the places where the factories are.

PAUL SOLMAN: Meanwhile, Deasha Johnson's is a farming community, where a number of her fellow GM workers also live. The crisis has already hit hard there.

DEASHA JOHNSON: And it's hitting us at astronomical levels. There's farmers selling off their livestock. They're selling off their land. The options just -- they're going through the roof, because they can't afford to even feed their livestock.

PAUL SOLMAN: When the Great Depression happened in the 1930s, there was about 25 percent unemployment. But in black communities in America, it was closer to 50 percent unemployment. Do you in any way take this threat personally as an African-American?

DEASHA JOHNSON: Yes, I do. My aunt lost her job. They cut off the shift that my husband's job and her daughter got laid off all in one house in one month. So I do share those burdens, and I do share those fears.

PAUL SOLMAN: The shift was over. A thousand or so of America's 250,000 remaining autoworkers were headed home. But what if their companies all go under? The UAW's Steve Ramos.

STEVE BRAMOS: We're asking for $25 billion. And if we go the other route, bankruptcy, it's going to cost the government upwards of, in my understanding, $75 to $110 billion, quite a dramatic difference, because of all the social programs that are involved, all the people that will be taken care of, or have to be taken care of that will be now on the unemployment rolls.

PAUL SOLMAN: Now, some would argue with Ramos' numbers, many with the compensation packages for labor and management alike. But not surprisingly, the file refrain here was one we've heard before and are likely to hear again: You can pay now or pay later.