The Fall of Detroit: An Insider's Tale
The author, who built Cadillacs on GM's assembly lines in the 1970s, recounts the mistakes and missed opportunities that haunt the industry today.
By John Lippert Bloomberg Markets November 2007
The news rippled along the assembly line. "The man says we goin' at 7," a worker nicknamed Bird said as he trotted through Fleetwood, a General Motors Corp. plant in southwest Detroit that spanned eight city blocks.
We were going on strike to protest our bosses' insistence that we do more work. In one case, GM had cut the number of two-person teams installing vinyl tops to 35 from 40. Already that day, GM had suspended two United Auto Workers leaders for balking at the company's "speedup."
At 7 p.m., hundreds of us poured into the street in the kind of wildcat work stoppage that was rocking Detroit almost every year. I ran down six flights of stairs and onto a sidewalk baking in 85-degree-Fahrenheit (29-degree-Celsius) heat.
About 600 of us started drinking beer and celebrating. The line would stay shut for a day and a half. We called that a victory. It was Aug. 26, 1976--and another skirmish had occurred between what were then the world's biggest automaker and the most-powerful American union. We the employees won that one. Management won others. In the end, we all lost. I worked at Fleetwood and four other plants for eight years during the heyday of U.S. carmaking dominance and union militancy. I built Cadillacs, the icon of American luxury. I look back on those years as a long chain of mistakes and missed opportunities for the auto industry.
Today, the UAW and Detroit carmakers are hashing out contracts in which both sides are struggling to survive. Along with Ford Motor Co. and Chrysler LLC, GM is staggering under a combined $114 billion in retiree health liabilities shouldered as workers hold the UAW and companies to the promise of a pension and lifetime health care. "GM was inclined to give the UAW what it wanted in 1976 because it was selling everything workers could make," says Dan Luria, an analyst at the Michigan Manufacturing Technology Center in Plymouth.
Now, the automakers are pressuring the UAW to approve contracts that could let them abandon their promise to be solely responsible for health care. The union had 538,448 members last year, down from 1.5 million when I was at Fleetwood. The new contracts could transfer responsibility for retiree benefits to an independent trust fund, along with tens of billions of dollars of seed money from the carmakers. Trustees, appointed by the union in a show of cooperation nonexistent in my time, would be able to cut back if health costs rise too fast.
As we GM workers clashed over benefits, speed, safety and pay, a generation of car buyers turned to Toyota Motor Corp. in search of quality. GM's share of the U.S. market tumbled from 46.9 percent in 1976, when we walked out at Fleetwood, to 23.6 percent today. The site that reverberated with the shouts of 5,500 laborers, whirring power tools and fire-spitting welding guns is a weedy lot stacked with shipping containers for global trade. In 1977, gasoline in Michigan was 70 cents a gallon. We built a record 276,864 19-foot (5.8-meter) Cadillacs and powered them with V-8 engines. GM has lost $11.4 billion since 2004, and gas hovered at $2.99 a gallon on Sept. 12. GM didn't introduce a full-blown gasoline-electric hybrid until 2006, nine years after Toyota.
Without Fleetwood and its counterparts at Ford, Chrysler and dozens of parts makers, stretches of Detroit are reverting to grass and trees. The population that peaked at 1.9 million in 1953 was about 840,500 in September, the Southeast Michigan Council of Governments estimates. "Detroit was an industrial version of one of the great Western gold rush towns," says Kevin Boyle, an Ohio State University historian. "Detroit grew fast, it grew wild and it fell fast, because that's what boomtowns do."
Our militancy at GM drew on the youthful rebellion that was gripping the U.S. Hundreds of us at Fleetwood, black and white, grew our hair long, fueled by anti-establishment fervor that helped end the Vietnam War and sweep Richard Nixon out of the White House. During our 30-minute lunch breaks, we sat in our cars and listened to Jimi Hendrix as we smoked marijuana, drank beer and took Desoxyn and other methamphetamines before returning to the line. Our quality levels and absenteeism rates were among GM's worst. We didn't care.
For labor and management alike, moving iron out the door trumped everything. Dennis Pawley, who was a paint shop supervisor at GM in Pontiac, Michigan, before he retired as Chrysler's executive vice president for manufacturing in 1999, remembers watching a GM film in the mid-1970s. It predicted Japanese carmakers could capture 10 percent of U.S. sales. "With the arrogant mentality we had, everyone sat there and laughed," says Pawley, 66. "We thought, 'I'm GM. I own the goddamn automobile business.'"
We didn't recognize that Toyota was perfecting a manufacturing strategy that required workers to do each job the same way every time and to keep inventories low to spot defective parts. At GM, which grew through the acquisition of a dozen smaller companies starting in 1908, managers didn't start talking about such a global production system until 1992. We didn't emulate Toyota sooner because we didn't think we needed to.
"We all thought Fleetwood would be there generation after generation," says Edmund "Red" Siniarski, 61, while eating biscuits and gravy at a Bob Evans restaurant in Dearborn, Michigan. Siniarski started at the plant in 1964, worked there until it closed in 1987 and retired in January. For his last 10 years, he was a UAW representative at the GM technical center in Warren, Michigan.
In 1979, we got an inkling of how wrong Red was. A revolution in Iran toppled Shah Mohammed Reza Pahlavi and installed Ayatollah Ruhollah Khomeini, cutting off the cheap oil on which the West was hooked. GM rushed to build a small car. In 1980, the company spent $1,500 more than its Japanese competitors to build a compact, according to Harbour Consulting, a manufacturing advisory firm in Troy, Michigan. Those higher costs made GM slow to invest in new technology. In 1981, as gasoline jumped to $1.40 a gallon, GM scaled its Cadillac down to 14 feet and four cylinders. Toyota took a different path. Today, with its Prius, it sells three of every five hybrids purchased in the U.S.
In July 1973, when I joined GM, such events seemed improbable. The first oil shock was a few months away, and GM was king of the biggest auto market in the world. I stacked the foam interiors of seats onto metal carts at a Fisher Body plant in Elyria, Ohio, a town of 55,000 near Lake Erie. I was 20 years old and working the night shift to pay tuition at nearby Oberlin College. Plus, I saw unions and the industrial democracy they epitomize as a way to breathe life into an anti-war movement that was peaking. My co-workers had different aspirations. They told me to plan for retirement at age 50. They were completely wrong. I was laid off after Christmas, when Arab nations blocked petroleum shipments to the U.S. in retaliation for America's backing of Israel in a war with Egypt. Gas station lines became a staple of television news, and the average price of a gallon of gas jumped 43 percent to 55 cents.
A few months later, Honda Motor Co. heralded what would become a Japanese incursion of reliable and fuel-efficient vehicles. Its Civic was the first car to meet U.S. mandates for cutting hydrocarbon and carbon monoxide emissions by 90 percent. U.S. automakers were forced to install $260 catalytic converters that Honda's clean-burning engine didn't need.
At GM, we had blinders on. We continued building 11 mile-a-gallon Cadillacs. The Fleetwood factory was one of the first to hire after the embargo ended in 1974. I got hired. From my sixth-floor window in a room the size of three football fields, I could see smoke billowing from the River Rouge factory where Henry Ford pioneered mass production. An oil refinery, a salt mine, a waste treatment plant, a steel mill, another GM assembly plant, a GM parts plant and GM headquarters filled the panorama. I was in the heart of American manufacturing. I quickly discovered how cruel that heart could be.
I was fired after two weeks because I couldn't install vinyl tops fast enough to satisfy GM's need for speed. U.S. automakers built an average of 12.5 million cars a year in the 1950s through the 1970s, according to analyst Luria. In 1978, that number would spike to 15.3 million. Getting there demanded quickness at all costs--and workers like me who didn't measure up got the ax. I was part of 40 two-person teams that put on the tops. We worked on 2-foot-high platforms that followed the assembly line through an S-curve among cement pillars. We'd take up to 20 minutes on each car, spraying glue, putting the top in place, stretching and trimming it. My foreman was a short guy from the Appalachian Mountains named Tyree. If I left a wrinkle, he'd shove me aside, rip up the top and make me start over. He'd scream, "You fuck up everything you touch." And then I was out.
I rummaged through seats in my Dodge sedan to scrape together money for rent. I found a job running lathes that cut metal for a company making scales. I called the UAW every day, begging for my Fleetwood job back. There were others, but this one, paying $8.72 an hour with health care, was the best. The UAW had a policy of trading away other grievances, including speedup, to get workers rehired. By the time the union had bargained for me, I'd sliced my index finger to the bone while sharpening cutting tools. I asked the union rep if he could delay my reinstatement. He said no problem. I returned to Fleetwood five weeks later.
My job was on the fourth floor, where car bodies arrived assembled and painted with no engine or chassis. On Sevilles, I taped together wires, installed moldings and noise deadeners and screwed down carpeting in the trunk. I needed an air hose, a drill and a power screwdriver. At first, I couldn't figure out where the carpeting went. As I fumbled, the air hose wrapped around me and dragged me off the car. I got a face full of the water sprayed to test windshield wipers.
I survived with the help of co-workers like Arkansas, who'd run up and install the carpeting. People started calling me Grasshopper after watching me fold my 6-foot-6-inch body and jump into cars. During 10-hour days and frequent Saturdays, I discovered Fleetwood Fatigue. I could fall sound asleep and be back on the line at the end of our two 18-minute breaks.
Eventually, I learned to use the line's forward motion as a metronome to time my twists and turns. Doing my job required only a portion of my brain. Like everybody else, I'd work for hours in a dreamlike trance. When something jolted me into thinking consciously, my enemy was time. I'd put tape over my watch to force myself not to wonder how long we had until break.
I got transferred to the sixth floor four days before the walkout. I installed metal frames around windows in coupes, just ahead of the vinyl top area from which I'd been fired. GM had cut 8 inches and 1,000 pounds (450 kilograms) from three redesigned Cadillacs to save fuel and boost sales. The company assigned more work at almost all job stations. On the day of the walkout, GM's head of labor relations and the UAW shop chairman shoved each other while arguing about speedup. The local union president stood by, swearing. After its leaders were suspended, the UAW sent Bird and other lieutenants to organize the strike. About one in four afternoon-shift workers left that Thursday--a payday. On Friday, GM wouldn't pay workers who hadn't stayed for their checks. A striker put his foot through a glass door. GM started paying.
After our walkout, the speedup tension simmered, especially among vinyl top workers. There were about 100 on each shift. They were a distinct subset and powerful enough to convince each other that militancy could pay. The vinyl workers--and a lot of the rest of us--goaded management by working "in the hole," or purposely going slow so we'd follow cars beyond our workstations. The vinyl top people took their job 500 or 600 feet into the hole and disrupted what others were doing for weeks at a time. Management fired or suspended dozens of them.
By Oct. 8, Fleetwood didn't have enough people to cover absenteeism. GM let one in six cars go without vinyl tops. Their metal roofs, amid the whites, yellows and browns of the completed cars, were visible hundreds of yards away. As the unfinished models filled repair bays, GM capitulated. It increased the number of vinyl top teams to 39 from 35 and reinstated everybody with pay.
After that, the vinyl top guys could stand around for as long as 20 minutes between jobs. Other workers and managers watched as they congregated in groups defined by their attitude toward factory discipline. Militants like Red clustered along windows 100 feet from the foreman's desk. People closest to management stood next to the desk. Religious workers read the Bible. Old workers sat near the glue and avoided trouble. The militants pitched quarters and played basketball with balls made of tape and cardboard. One year they used cardboard and wood slats to build an 8-foot-tall Christmas tree, with a chimney and stockings at its base.
In 1979, Siniarski ran for UAW representative on the day shift and I ran on afternoons. A win would mean bargaining with management full time. Women made up about one of every 15 workers. In my first leaflet, I accused my foreman, Bruno, of harassing one of them by implying she could get better jobs if she went out with him. After that, a superintendent named Turkely and a general foreman named B.J. stood about 10 yards from my station and stared. They watched me for 15 minutes in apparent disbelief they couldn't stop me from writing. I saw Bruno years later, and he hadn't forgotten how GM had demoted him after my leaflet destroyed his authority. He walked up to me and said, "I'm back on the line now. Back on the line."
Siniarski and I lost. That was only part of our heartache. On election day, he was attacked at the union hall and had his cheekbone broken. That night, while we were drinking beer, my friend Mo got hit with a tire iron. He needed 24 stitches in his head. Another guy ran to his car for a shotgun. Somebody wrestled it away. Siniarski was attacked by a member of a rival union faction who'd wanted to stop him from greeting workers as they arrived to vote. Other violence seemed rooted in personal disputes. I couldn't say for sure. Our election had uncovered a savagery that bubbles below the surface in Detroit.
The election ended as the Iranian revolution drove Cadillac sales down 30 percent. I got laid off. I was called back to a new job at the Willow Run plant, 30 minutes away by car in Ypsilanti. It was 1980, and we were building GM's first domestic front-wheel-drive compact, called the X-car. It got 29 miles (47 kilometers) to a gallon--a milestone for GM--and the company rushed it to market as gasoline prices rose.
I ran a welding gun where the top, sides and bottom of the cars came together. We had trouble with the shelf behind the back seat. We'd lean through the trunk to drill holes and shoot screws. On April 1, 1981, a worker named Rocky stumbled and sliced his wrist to the bone on a metal panel. He ran and screamed as blood gushed. He was replaced, and the line kept moving. Two weeks later, another worker had his fingers crushed when his welding gun got caught in a passing car. He staggered in a daze, his hand covered in blood, while the foreman scrambled to keep the line going.
I started filing safety complaints with the Michigan Department of Labor. Along with 10 other people, I complained about the booth where workers put lead solder into a crack between the roof and side of the car and then used a hand-held grinder to make a smooth surface. At the time, GM had signed an agreement with the U.S. Occupational Safety and Health Administration on controlling lead. "Lead is a potent, systemic poison," an OSHA statement said. At Willow Run, our lead booth had broken windows and doors that hung on busted hinges. Lead came shooting onto drinking fountains and picnic tables. Employees tasted lead in their respirators. Body shop workers told me months later that because of our complaint, GM rebuilt the booth. By then, rushed engineering had doomed the X-car. In early 1981, Willow Run scored the worst of any GM plant, with a tally of 38 on an internal quality scale of zero to 145. Sales collapsed because of recalls over defective brakes and power steering. Spokesman Dan Flores declined to comment on Willow Run safety for this story.
I was laid off again. I started studying journalism at Wayne State University the next year. A few months later, I got a telegram ordering me back to Fleetwood. I wanted to go, but my wife screamed, saying I'd only lose my job again. I took her advice, graduated Phi Beta Kappa in 1985 and have worked as a journalist ever since.
GM stopped using lead in 1985 for safety and design reasons. Willow Run closed in 1993 and is now a warehouse. Amid acres of silent and dimly lit auto parts, the only remnants of our drama are patches of yellow paint where we ran the welding line and air ducts above what was once the lead booth.
If I'd gone back, I would have spent my life dodging plant closings. Inner-city factories like Fleetwood were the first to go. During the 1980s, the country's 17 largest cities accounted for 70 percent of manufacturing job losses, Luria says. In that decade, Nissan Motor Co., Honda and Toyota exported their standardized job assignments and small inventories to new plants in rural Kentucky, Ohio and Tennessee.
The Elyria plant where I started closed in 1990. GM's machinery is gone except for a few scraps, including a dip tank for chrome plating. I used to lie under the tank during breaks and read Oberlin textbooks.
Doug Fraser, president of the UAW from 1977 to '83, remembers the '70s as a time when Detroit could sell every car it made, no matter how shoddy. "We got reckless," Fraser, 90, says. "The entire concentration was on quantity." Fraser says Detroit is threatened today not by quality, which he says has improved, but by a health system that gives doctors and hospitals no incentive to cut costs. "It's like if we let car dealers run the auto industry," he says. "We'd have three radios in every car."
Fraser is tormented by a missed opportunity, which he says could have replenished the UAW's ranks. In 1982, Honda promised not to run an aggressive anti-union campaign at its Marysville, Ohio, factory and signed a so-called neutrality agreement with the UAW. Honda wanted to head off a nationwide boycott of dealerships the union was threatening. Success by the UAW at Honda, the first Japanese assembly plant in the U.S., could have led to union recognition at what are now 18 other factories owned by Asians and Europeans. It was a once-in-a-lifetime chance to help GM by narrowing Honda's cost advantage.
The union delegated responsibility to Joe Tomasi, a regional director in Toledo, Ohio. Tomasi, who died in April at 86, earned a Purple Heart in the Battle of Okinawa during World War II. He talked often about how he didn't trust Japanese people, Fraser says. He was bitter about contract language Honda proposed saying the two sides would avoid adversarial relations, says Leonard Page, then the UAW's associate general counsel. Put off by Tomasi, Honda management dropped any pretense of cooperating with the UAW. Anti-union groups appeared among the workforce, Page, 63, says. Tomasi called off an election in Marysville for lack of support; the union has failed in all campaigns at factories owned solely by Honda, Nissan and Toyota since then. "It was a gross miscalculation," Fraser says.
The UAW was losing its grip at GM, too. The company eradicated sixth-floor militancy at Fleetwood with a robot for installing vinyl tops. Workers called it "the flying nun" because it pivoted over the car and dropped the top in place. As Toyota grew stronger, GM and the UAW were scared out of their adversarial ways, Siniarski says. The last car built at Fleetwood in 1987 scored a near-perfect 141. Even as better quality gave GM a fighting chance with consumers, the company and the UAW allowed the gap with Toyota in labor costs to grow, says Sean McAlinden, an analyst with the Center for Automotive Research in Ann Arbor, Michigan. In 1999, the two sides agreed to wage and benefit increases totaling 23 percent over four years. "They'd only do that if they thought they'd sell pickups and sport utilities forever," he says. Detroit's pickup and SUV boom lasted until 2005, when Hurricane Katrina helped boost gasoline prices to $3.01 a gallon.
George McGregor, president of UAW Local 22 at GM's Hamtramck, Michigan, plant, worked at Fleetwood during the 1970s. He says the UAW should have used its power to stop GM from shipping defective cars instead of forcing it to hire unneeded workers. "We fucked that place up, and we're paying for it," McGregor says.
While the quality gap has narrowed, many Americans still regard UAW-built vehicles as inferior, McGregor says. In 1980, Ford gave a customer survey to the Federal Communications Commission to support advertising claims. It showed Toyota with 105 customer complaints per 100 vehicles at that time, Ford with 670 and GM with 740. This year, in a J.D. Power & Associates survey, Toyota had 110 customer complaints per 100 vehicles, Ford had 124 and GM had 135.GM has improved safety from the days when I saw workers hurt and bloodied as the line kept moving. It cut reportable injuries in the U.S. to 2.2 per 100 people so far this year from "the low 30s" in 1980, Flores says. In 1980, GM needed 50 hours of labor time to assemble a car in the U.S. By 2006, that had dropped to 22.15 hours compared with 22.05 for Toyota.
These statistics show Detroit faced its deficiencies, says Peter Pestillo, Ford's vice president for labor relations from 1980 to '85. Even so, retiree health liabilities mean Detroit carmakers could be forced to merge with stronger competitors, Pestillo, 69, says. "You'll see more consolidation," he says.
For Tony Trent, who installs filters and hoses for GM in Romulus, Michigan, the immediate problem is speedup--the issue that sent me storming out of Fleetwood in 1976. The number of workers assigned to Trent's line dropped to 12 from 34 two years ago with no cut in output, he says. "The UAW has absolutely no power because the public is against us. They think we prop up our feet and drink beer all day," says Trent, 49, who has worked at six factories in 31 years. "GM tells us every day they've got a plant in Mexico that can build our engines."
I moved from southwest Detroit in 1989 after a shootout that began at 2 a.m. when my neighbor rammed his car into the house next-door. I live in Dearborn now, in a middle-class neighborhood three miles from Ford headquarters. In August, a block from my house, a three-bedroom brick bungalow valued at $181,000 in 2004 had signs for a court-ordered auction. The opening bid, scheduled for Sept. 24, was set at $25,000.
UAW leaders went into this year's contract talks telling members that Ford could go bankrupt in two years. In May, New York hedge fund firm Cerberus Capital Management LP bought Chrysler, just before the subprime mortgage crisis dried up cheap money for future investments. Cadillac, which sold almost as many cars as the next seven luxury brands combined when I worked at Fleetwood, now ranks fourth, behind Lexus, BMW and Mercedes-Benz.
That's the hard part about being a former autoworker living near Detroit. Even though GM, Ford and Chrysler cut two-thirds of their employees in the past three decades, even though the Fleetwood and Willow Run assembly plants are gone and the UAW is a shadow of its former self, we're not done paying for our mistakes.
JOHN LIPPERT is chief of the Detroit bureau of Bloomberg News. email@example.com