GM and Chrysler: They’re Back

OK. Here we go again. GM and Chrysler have until 5 p.m. today to submit their comprehensive restructuring plans to Congress and the administration. In the balance: billions of bailout dollars and maybe a shift toward filing for bankruptcy. At stake: thousands of jobs. Wow. No  pressure there.

And the fact is, the Detroit auto makers have already gone through a massive restructuring. Here’s from The Washington Post about GM:

GM has halved its workforce since employment peaked at nearly 200,000 workers in 2000. It has slashed 40 percent of its models, focusing on smaller cars and so-called crossover vehicles, and streamlined its distribution network, cutting 1,000 dealers. Since 2005, the company has reduced annual structural costs by $10 billion.

GM announced last week that it was slashing an additional 10,000 salaried jobs. And you can be sure that blue-collar manufacturing jobs will disappear over time as well — regardless (or maybe because of) this latest “restructuring.”

The dollars involved — billions here, billions there — are so large that most people can’t relate to the economics of all this. And just as with the economic stimulus package that Obama is going to sign into law today, I’m not convinced that anyone knows for sure what will work or what won’t. But we have to at least try, in Detroit and elsewhere. I think all of us — including me, certainly — can relate in at least some modest way to the devastating effect these job losses have on individuals, families and communities.

I learned this lesson in 1985 — during a period when this country began in earnest the dismantling of its industrial and manufacturing base: steel, autos, tires and rubber and so on. At that time, BFGoodrich was ending its decades-long exit from manufacturing tires. And I spent several years making announcements about plant closings, some small, some large. Every one had an effect on hundreds if not thousands of people. None was more difficult than the one involving a tire manufacturing plant in Miami, Oklahoma.

Miami is a small town of about 13,000 in the upper northeast corner of Oklahoma. BFGoodrich built a tire plant there in 1943 — and much like in Akron, it employed generations of people, grandfather to son to grandson, and so on. By the mid-1980s, following some ups and downs with employment, about 2,000 people were employed there. By comparison, the next largest employer — with about 100 employees — was the community hospital.

The plant made large tires for construction equipment and farm vehicles, essentially. Products that even at that time were beginning to be manufactured by other companies overseas. And BFGoodrich — for a variety of reasons — by that point was no longer competitive in the international tire industry. So the company, on its way to eventually selling the business to Michelin and focusing on chemical and aerospace businesses, started down the road in the early 1980s of divesting its manufacturing and other assets related to tires.

One of the first stops: Miami, Oklahoma.

In a nutshell, here’s what happened. I flew to Miami on a small commuter aircraft with George Brown, then the director of employee relations for the company’s tire division. We met the plant manager late in the afternoon in a hotel room. And he learned then for the first time that we were there to announce the following morning that the plant was going to be shuttered. All jobs lost. No potential buyer. Just the end of the way of life for as many as 2,000 families — and for many others in the community who depending on the plant for related income.

The plant manager stood there for a few minutes with tears rolling down his cheeks. And then he said, “OK. I can do this.”

And he did. The next morning we went out into the plant and first told the manufacturing employees — face to face. Then we talked to salaried employees — and to a meeting of community leaders and others — and finally to the news media.

Lots of tears. It is personal.

And I hope that the policy wonks, politicians, corporate managers and PR people don’t forget that. These aren’t just business or political stories. They’re people stories. We’re tossing billons of dollars around these days. But it’s not just about the money, stupid. It’s about the people involved.

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2 responses to “GM and Chrysler: They’re Back

  1. Great post, Rob. With a dad that’s spent his life working at GM to put his daughters through college and provide for a family, it’s nice to hear someone remember that, despite the many mistakes of GM’s management, these are people’s dads, they work hard, and these are life-changing decisions being made.

    • Kait,

      Absolutely. In all of this we are talking most basically about people — their lives, their families and their communities. Billions and billions of dollars at stake to be sure. But you can’t lose sight of what is really involved here: people.

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