Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Monday, August 10, 2020

Michigan politics as an illustration of the impact of the decline of industry on social capital

The Washington Post has launched a series of articles on swing states vis a vis the Presidential Election, and the first article is on Michigan, "Michigan's political geography."

Reading it reinforced the fact that I need to read Sugrue's Origins of the Urban Crisis, which is about the decline of Detroit, but dates the start of the decline to the 1940s, but also touched on Chapter 5, "Common Ground," in Palaces for the People: How Social Infrastructure Can Help Fight Inequality, Polarization, and the Decline of Civic Life by Eric Klinenberg, which is about social capital and social infrastructure as essential elements to a functioning society in the United States.

Michigan was the heart of the American automobile industry and still is home to the US-based manufacturers (GM, Ford, FCA--now the owner of Chrysler).

Detroit and its suburbs especially in Wayne County, Flint (GM started there, Buick was based there, many parts manufacturing operations were based there), Bay City, Pontiac (Pontiac was based there), Saginaw, and Lansing (Oldsmobile was based there), Dearborn where Ford is based and nearby River Rouge where Ford had a plant that even milled its own steel, especially were known for how those communities were dominated by the auto industry, suppliers, and related firms.

But even before the "gasoline crisis" of 1973 when Saudi Arabia nationalized the oil industry and raised prices, the auto companies were shifting operations out of Michigan.

They did this because they realized that the preponderance of facilities had at least one negative consequence, lots of employees who were members of the the United Auto Workers union, and in supplier plants too, of the UAW and other unions.  And for the most part, these workers voted for Democrats, especially in Congress and the State Legislature, and usually for Governor.

By deconcentrating the industry away from Michigan and spreading it out around the rest of the country, the power of the UAW (and other unions) declined, especially in Michigan, where for much of the past few decades, Republicans have controlled the State Legislature and usually the Governorship.

The effect on Michigan and especially cities like Detroit, Flint, Pontiac and Saginaw has only intensified through technologization of jobs--the typical plant has one quarter or fewer of the jobs it had it the late 1960s, consolidation, outsourcing, and the success of "foreign car companies," many now with manufacturing operations in the US.

In short there are significantly fewer mass manufacturing plants in Michigan--especially in Detroit, which had 15 such plants in the 1950s and two now, Flint, which once had almost 90,000 people working for GM in and around the city and now has fewer than 9,000 employees working there, Lansing--no more Oldsmobile, and Pontiac--the Pontiac brand was dissolved so there's no need for plants and headquarters operations.   Etc.

The Post article discusses how much of the State of Michigan now votes Republican, except in the cities, which are much reduced in population size.  It also discusses the phenomenon of conservative blue collar workers--the so called "Reagan Democrats" in Detroit's suburbs, but particularly Macomb County.

Chapter 5 in Klinenberg's book is really interesting, because it discusses how large scale work sites ,in particular manufacturing plants, ended up being social levelers and platforms for equality and augurs of democracy, bringing together people who otherwise differed greatly on racial, ethnic, and religious terms.

But working together, sharing not only union membership and activities, but "wakes, funerals, retirement parties, weddings, and a host of family activities over the course of their lives in the mill" brought about social bonding and what Klinenberg calls "bridging social capital" that supersedes intragroup solidarity.

"Taverns, athletic fields, and political clubs were especially important sites of social bonding.  Some tended to attract mainly people from one ethnic group, but many others were places where white ethnics, Mexicans, and African Americans came together regularly to converse, commune and compete."

Not only did people discuss work issues, but family, personal matters, community and political issues as well.  Sure plenty of churches, social clubs, and neighborhoods remained exclusionary, but for many their world did not have to be quite so delimited.

As firms consolidated, closed, and moved out of the cities, these platforms for communal introduction and interaction declined and disappeared as well.

In Michigan, industry centered on Southeastern Michigan specifically, dominated by Detroit which had a peak of 1.8 million residents which today is about one-third, and "Lower Michigan" more generally.  And this population and political domination of Lower Michigan over the rest of the state was deeply resented.

Buick City--the section of Flint dominated by Buick manufacturing operations--in its heyday.

The population decline in major Michigan cities as "work disappeared" and a spread of the population within the state away from Southeastern Michigan has contributed significantly to the changing political demographics of Michigan.

Within Michigan as a whole, too there is an element of political payback to Southeastern Michigan, whose political and economic might once controlled the rest of the state. 

You saw that with Governors like John Engler (a former Congressman who went on to disgrace himself as the out of tune interim President of Michigan State University) and Rick Snyder, and with Snyder, state management takeover of cities like Detroit and Flint through bankruptcy proceedings.

(It was Republican state management of Flint that brought about that city's massive water system failure.)

And with the denigration of cities as cesspools of Democratic control and "failure," without acknowledging that when work disappears so do tax paying residents and businesses.

-- "John DeLorean, R.I.P (Rocking Revitalization Part II)," 2005
-- "The rise of Oakland County is built upon Detroit's fall," 2014
-- "Ford Motor Company as a transportation company not a "car" company: bike share and small scale transit," 2016
-- "The real lesson from Flint Michigan is about municipal finance," 2016
-- "Poletown, GM, the Archdiocese, etc. and the closure of the Detroit Hamtramack GM plant," 2019
-- "Revisiting stories: the death of L. Brooks Patterson, County Executive, Oakland County, Michigan," 2019

In 1987, I ran for City Council in Ann Arbor in a ward that was traditionally Republican, because that year, the Democratic candidate who typically ran, a lifelong resident, wasn't interested.  (Back then the election was in April, to diminish the power of the student vote.  Now it's consolidated within the national election cycle and Democrats pretty much control the city's politics.)

I went to Ann Arbor more as a moderate Republican (although at 12 I was a fervent McGovern supporter) and voted for some Republicans including for Governor the first time I voted.  Although then Michigan had an honorable moderate Republican tradition which has long since been abandoned in the state and by the party more generally.

Soon enough I became more progressive and Democrat in my politics, especially by the time I ran for office.  Talk about voting in that Ward always centered on the massive turnout in two Republican precincts out towards I-94, somewhat distant from the city center and very typically suburban.

Having changed my politics, I didn't understand why Oakland County--where I lived during junior and senior high school--was so Republican.  When I started door knocking in those two precincts in Ann Arbor that were so reliably and fervently Republican, I understood.  Those houses and subdivisions looked just like where I lived in Troy.

Labels: ,


At 1:30 PM, Anonymous Anonymous said...

reading your linked article on SF-- excellent. Looks at funding streams.

With Michigan, you can't talk bout this without talking about the 1980 trucking deregulation. (as well as gas crisis and the response).

No question that without a gas crisis and the flawed government/industry response (took 20 years) the massive opening for Japanese auto industry would not have taken place. Again outside of CA the impact of the catalytic converter has not been transformational.

Things like drive 55, the catalytic converter, CAFE, unleaded gas inspired a generation of conservatives.. Maybe it was worth it. Again outside of CA the evidence doesn't really suggest so.

The new Obama CAFE requirements are basically killing the sedan as everyone moves to SUVs. "cars" are now only about 15% of all vehicles sold in the US compared to 50% before Obama.

Likewise, trucking deregulation enabled states south of MI to take part in the auto industry -- you can see that today with Indiana, kentucky, TN, Alabama etc.

You're probably the one who highlighted it, but Flint in 1980 was the best place in America to be a young wage earner.

Michigan is truly something out of Dr. Seuss; I'm trying to imagine a system (19th century) which enabled the entire forested area to be clear cut.

At 11:51 AM, Anonymous charlie said...

also this:

At 12:51 PM, Blogger Richard Layman said...

Will read.

WRT trucking deregulation I hadn't really thought much about it.

Definitely it enabled the spread of the auto industry away from Michigan-Ohio-Indiana-Illinois-Wisconsin-Missouri (the latter two on the outskirts) and the agglomeration economies there, in particular of parts manufacturers.

Although (1) the deconcentration and consolidation of the industry had been apace for awhile (bye "more recently" Studebaker-Packard, Willys, Hudson-Nash-AMC, even the pickups by International Harvester) and (2) arguably, once the Interstate freeway system was built out, likely there'd be a big drumbeat by the industry for deregulation to fully benefit from the network.

But absolutely, lower transportation costs made it possible for firms to locate outside of the core manufacturing region.

Yes, there is no question CAFE and the other things you mention made it difficult for the US companies, because (1) they were no longer internally positioned to be innovative (DeLorean's book is amazing on this, at least it was when I read it not quite 40 years ago), (2) because of legacy pension and health costs, and (3) wrt the latter, that the US didn't have national health, so the US-based companies paid for health insurance costs.

As I said in the Ford piece, with the energy crisis, CAFE etc., it ended up favoring the foreign companies who were already making the kinds of cars that were needed to respond to the new business model and political, environmental, and economic conditions.

I hadn't thought of it much lately but yes, Toyota and companies have an advantage over the US companies because they are making "world cars" that can be shared across markets, so there is one primary design and engineering cost per model, where the US companies still mostly make cars for the North American market. It's still huge, but at least for cars, is no longer quite big enough to sustain a market given the business model and conditions.

(cf. how cars are no longer being manufactured in Australia. How GM even abandoned the market more recently determining it's not worth even selling cars there because of the size of the market.)

You mention CAFE etc. I still think the single thing the US could do would be to raise gas prices to be about what they are in Europe.

Of course, in the intermediate term it would wreck the economy because sprawl, growth, financing, American Dream etc. is all based on cheap gas--much sourced and refined in the US and cars manufactured in the US.

But more expensive gas would make the business model for car manufacturing in the US more comparable to other countries, which would help the US companies compete better.

At 1:02 PM, Blogger Richard Layman said...

in the first listing of states, plus Western Pennsylvania in terms of raw materials like steel, coal for energy, and glass.

At 1:06 PM, Blogger Richard Layman said...

With regard to the spreading out of the parts industry enabled by trucking deregulaion.

I don't know if you've ever driven by an auto plant, and seen that they are referred to as "Assembly Plants," not "manufacturing plants."

This comes out of how many of the parts were produced off site, and by third parties. (E.g. how the Dodges or the Fishers provided bodies, etc.)

A car is assembled rather than manufactured...

There is an article I came across a few years ago about this, and how the large system of third party manufacturers enabled Walter Chrysler to produce cars initially, beyond the capabilities present within the corporation otherwise.

It happens this weekend's WSJ had an article about Fisker and his aim at creating a new car, after his previous business failed.

Instead of setting up manufacturing and doing all the parts development and production, he wants to outsource etc.

Quotes in the article were negative about the likelihood of success, but all I could think of is how this goes back to the start of the industry, and because EVs in the current market are a quantum or scalar leap from previous generation technologies (a la Gerschenkron) it can work.

What the journal article says is through that period til 1940, the companies would wax and wane in terms of their embrace of third party manufacturers.

Obviously, GM was big on buying those third party firms and "acquiring" talent like Kettering and Sloan. Being the first mover and really being focused on conglomeration from the beginning set GM apart from the other firms.

At 1:17 PM, Blogger Richard Layman said...

wrt quantum and scalar change, it's why I've been wrong about Tesla. I'm right that Musk is a blowhard and probably that the stock is nowhere worth what it's at, based on the ability of the firm to generate profits.

But Tesla has reset the car industry in terms of the electric car. (I thought GM would really do it with the Bolt, but I was wrong. Although I'd be willing to buy a Bolt definitely, as it is manufactured a lot better. Although Tesla is far superior on the software and the batteries.)

And because this is a quantum change in the industry, coterminate with e-commerce, social media, the smart phone, etc. which for younger demographics has completely reset how they are informed, come together, organize, and are receptive to brands and products new and old, in a wrinkle along the line of Christensen's disruptive innovation but not in the way he conceptualized it, Tesla has the ability to lap the traditional firms.

The traditional firms are saddled with old business models, legacy costs, legacy mindset, and a legacy dealership network. But they know how to design and manufacture stuff.

But Tesla is a product of the digital world, hence the way it does software based upgrades, marketing, has a much reduced dealership network which it prefers to own, so that it better owns/controls the relationship with the customer.

The Tesla network is like Apple stores. I got pissed on an elist where an Apple user chortled about the sales/s.f. for the stores. I merely replied that of course they're stratospheric, because a smartphone or computer costs a lot more than a pair of jeans, can of soup, or pair of underwear etc.

But the point of have a limited number of points of sale, super well designed and curated, where you have control over the staff, marketing, and message works a lot better for the firm.

It also allows them to better link production to actual sales, rather than to "assemble" cars for inventory and hope they sell.

OTOH, in the traditional model, the companies offload the long term cost of maintaining inventory onto dealers (and they make money off that too by financing it, at least in the old days, through captive financing operations).

At 1:25 PM, Anonymous charlie said...

Yeah, other than engines and bodies pretty much everything is outsourced.

RE: CAFE. Yep, at times terrible management. But the key issue was power; I dug this up years ago but I think it took about 20 years for US companies to match the horsepower they lost in 1973.

The US could survive on Italian or Spanish gas prices. Better model is Canada. I agree at 7-8 a gallon you're looking as massive disruption.

You might enjoy this:

At 1:37 PM, Blogger Richard Layman said...

Wow. Good stuff. On one of the articles by the Post opinion bloggers, about how the Republicans don't deserve power, I reacted to a commenter who discussed how the left is all socialist and ruining the country but while he advocated for the two party system, he put all the blame on Democrats.

I said you can't have a two party if one party doesn't believe that government has a role to play in society and the economy, isn't committed to the rule of law nor to universal enfranchisement.

I have to read the full AC article obviously, but maybe the author misses a point. The conservatives see their focus on power is assisting the private sector and their power. But yes it diminishes their own power to rule government.

wrt the NBER piece, thanks. I will also put in the comment stream on the other entry, which I responded to as well.


Post a Comment

<< Home