In a recent editorial, Mr. Herbert quotes a UAW car hauler who lives in a Detroit suburb as being increasingly aware of the area's declining standard of living. Light industry is shutting down, and when those jobs go they take with them the barber shops, the hardware stores, the lunch counters. This is the result of the industry cuts that have already been made - not the current crisis.
“The community around me is deteriorating before my eyes. I hear people saying if G.M., Ford or Chrysler shuts down it wouldn’t affect them. They have no idea. It would have a domino effect that we’ve never had before in the United States.
“The bottom would fall out and the ripple effects would go all over the country.”
The bottom is already falling out. The question is whether to risk allowing the industry to collapse completely. The number of people working for the Big Three automakers has already been cut drastically, perhaps in half since 2000, and more cuts are to come, even with a government rescue effort.
The UAW contracts signed in 2005 and 2007 included concessions that barred pay raises for four years, and cut the starting wage by almost half. Benefits were also cut.
“Ripple effect” is too mild a term for the impact that a bankruptcy among the Big Three would have on other manufacturers, suppliers, dealers, insurance companies and thousands of businesses that at first glance would not seem to be related to the auto industry. The industry supports, in one way or another, one in every 10 jobs in the nation."
According to Mr. Herbert's source, auto parts supply is the number one industrial employer in seven states, including Missouri. And it’s a top five employer in 12 other states.
"The auto industry is embedded in the very heart and soul of the United States, a nation in which people travel by car with the natural ease of birds flying. Think of service stations, body shops, tire distributorships, car washes. ..."
And then be very, very careful what you wish for.
