MOTORNEWS CHRYSLER BANKRUPTCY:While the media focus has been on the financial and legal implications of Chrysler entering Chapter 11 bankruptcy protection, on the streets of Michigan the impact is being felt first-hand, writes PJ HUFFSTUTTERin Michigan
WHEN CHRYSLER announced it was filing for bankruptcy, the mayor of Warren, Michigan called for a new municipal requirement: city workers who don’t drive an American car must buy one or find a new job.
In this blue-collar suburb north of Detroit – where officials say unemployment hovers around 20 per cent and at least one-third of the 138,000 residents rely on the auto industry for their livelihood – mayor James Fouts’s wistful “buy American” proviso is more than a plea for consumer patriotism.
Chrysler has two factories here, one of which opened as the Great Depression was winding down. The firm is the town’s second largest employer. General Motors, which owns the city’s biggest parcel of commercial property, has until June 1st to present a long-term viability plan or it, too, could end up in bankruptcy court.
“We have to do everything we can to support the local industry,” said Fouts. “If Chrysler and GM fail, it will be disastrous.”
If there is a heart to the US automotive industry and a place where people still pray that cars can save them, it is Warren.
Residents felt a resurgence of hope in 2003, when General Motors made a billion-dollar investment in its Technical Center, a one-square-mile research facility in the centre of town. But the ensuing years brought deep salary cuts and diminished healthcare benefits to the industry.
When the United Auto Workers recently ratified an agreement that included restrictions on workers’ right to strike in order to rescue Chrysler, folks here supported it. And when president Barack Obama assured the public that the Chrysler bankruptcy filing would not “disrupt the lives of the people who work at Chrysler or live in communities that depend on it”, they believed him. Now that belief is crushed.
After filing for bankruptcy, Chrysler temporarily shuttered most factories. The company plans to sell off eight plants, including three in the Detroit area.
Nationwide, more than 20,000 hourly workers will get 80 per cent of their normal pay while factories are being closed down. Recently, workers in Warren’s two plants were told that the factories would go dark for the next 30-60 days – or longer.
And on Friday, an estimated 1,800 Chrysler retirees whose pensions were not insured learned that an expected payment had been voided.
Lynn Feldhouse, who spent the last 20 years managing the company’s philanthropic foundation, was paying her bills online last Friday when she saw the deposit actually vanish from her account. The company later assured her the money would be returned in a few weeks.
“Who knows if the check will really get here?” asked Feldhouse, whose nephew works at the truck assembly plant. “We’d been hoping for the best . . . Now we’re assuming the worst.”
Warren has become a grim, quiet place. For-sale signs and boarded-up brick garages dot the west side of Mound Road, where the sounds of machine shops once filled the air.
Across the street are Chrysler’s stamping and truck assembly plants. Security guards cruise up and down lots with new, dust-covered Chrysler trucks waiting to be shipped.
Workers trickled in and out of the factories for the last couple of days, carrying boxes of personal items. Before heading home, a few stopped by Nicky D’s Coney Island restaurant.
Darnell Pitcher, an electrician at the truck plant, was unsure about the future. “I don’t know when I’ll be here again,” he said. “If the plant doesn’t reopen soon or cuts back . . .” His voice trailed off.
In his wallet was a to-do list. Pick up milk. Get an oil change. Find the unemployment office.
The restaurant is preparing for another auto bankruptcy – schedules, staff have been told, are going to be cut back.
“Guess I won’t be spending any money on anything but rent and bills from now on,” said waitress Bessie Karnaros.
– LA Times