Daniel Howes for Saturday, January 5, 2019
Happy New Year, folks. Detroit’s three automakers are heading for their most tumultuous year since two of them emerged from bankruptcy a decade ago.
Expect confrontation and radical change. The auto bosses charged with navigating their industry’s greatest transformation since Henry Ford’s moving assembly line are set for a clash with the industry’s paternalistic tradition, and its implied obligation to, quote, “the people.”
That’s especially true for Fiat Chrysler and General Motors. Neither would exist today without their rescues from an Obama administration backed by American taxpayers. Don’t think that’s been conveniently forgotten.
Within weeks, GM is expected to finish cutting its salaried workforce by 8,000. And five North American plants, including two in Michigan, will be idled and could face closure.
Within months, Ford Motor Company is expected to finally deliver details on its longtime-coming global restructuring. The Blue Oval also is likely to eliminate salaried jobs even as it hires to build out a Corktown campus anchored by the renovated Michigan Central Depot.
Change? You bet. And it will be visited on the Motor City amid the good times of low unemployment positive economic growth and solid bottom lines for automakers and many of their suppliers. It’s not supposed to work like this, not in the century-old paradigm so familiar to this town and its defining industry.
That’s why politicians and union leaders are getting so hot. The next few months will give them a whole lot more reason to get even hotter. Automakers face existential challenges greater than the oil shocks of the ‘70s, the Japanese influx of the ‘80s, the bankruptcies of 2009. Each of those threatened the core auto business. But none proposed to radically redefine automotive technology, investment, and ownership.
The Auto 2.0 of mobility, autonomy and electrification does. It’s creating a whole new paradigm those inside the industry see. And fear. And they recognize opportunity in it – if they act, instead of denying, denying, denying and going the way of Blockbuster.
On any given day or night consumers can beam movies directly into their homes. No theaters to drive to, videos to return, sticky floors to negotiate. The point: technology and its delivery system are transforming personal entertainment.
Who says personal transportation is immune? Deniers, mostly. The outraged reaction to GM’s restructuring plans shows just how wide the gulf yawns between the execs negotiating the change and people affected by their decisions. From President Donald Trump and members of Congress to community leaders and union officials they’re all shocked, shocked that a profitable company rescued by taxpayers would dare to cut jobs and endanger plants.
Into this mess steps the United Auto Workers. This year, its bargainers will face a difficult choice: reward members for helping deliver a long run of profitability or limit the damage from the market’s rotation away from traditional cars?
The risk of confrontation is not insignificant. And neither is what it says about the change transforming today’s auto industry.
Daniel Howes is a columnist at The Detroit News. Views expressed in his essays are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.
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