[Pen-l] Japan's De-deindustrialization?

["Charles Brown" <charlesb@xxxxxxxxxxxxxxxxxxxxx>]

http://www.detroitnews.com/apps/pbcs.dll/article?AID=/20080609/AUTO01/806090332/-1/ARCHIVE

State's striking image
Labor unrest hurts Mich. job outlook, experts say
Eric Morath / The Detroit News
Growing sales of foreign nameplates and the low value of the dollar is
spawning new automotive factories in this country -- but that growth is
unlikely to come to Michigan, especially after strikes this year and
last reinforced the state's image as a hostile labor environment,
several experts say. 

A bitter 12-week-long walkout that ended last month against
Detroit-based American Axle & Manufacturing Holdings Inc. and two recent
strikes against General Motors Corp. plants broadcast images across the
country of angry pickets and workers at odds with their employers,
images that those entrusted with bringing jobs to this state hoped were
fading into history. 

"Unfortunately, it reinforces a lot of stereotypes about the auto
industry at a time when it's the last thing the auto industry needs,"
said Hank Cox, vice president for communications at the Washington-based
National Association of Manufacturers. "There are a lot of positive
things going on in Michigan -- it's a shame that the legacy issues keep
coming up." 


 For the first time, Asian automakers sold more vehicles last month in
this country than Detroit's Big Three. Those foreign automakers are
seeking to bring plants to the United States -- but so far not to
Michigan -- as the relative low value of the dollar and increasing
transportation costs makes importing from overseas more expensive. Those
developments make the timing of Michigan's labor unrest that much more
unfortunate, analysts said. 

"Such high-visibility strikes come at the worst time because we should
be bringing manufacturing into Michigan," said David Cole, chairman of
the Center for Automotive Research in Ann Arbor. 

Cole, a board member for the Michigan Economic Development Corp., said
the status of unionized labor is the first question any prospective
manufacturer asks about moving into the state. 

Since foreign automakers started moving to the United States in the
1980s, they've favored Southern states, where organized labor is rare.
Even this year, Honda Motor Co. is constructing an engine plant in
Indiana and Kia Motors Corp. is building a factory in Georgia.
Volkswagen AG is shopping for an American site and Michigan is a
finalist but not expected to land the plant. 

Skilled labor force is an asset
Other experts say the impact of the recent walkouts is overstated.
Foreign automakers are unlikely to change their location preferences,
with or without labor peace, said Harley Shaiken, labor professor at the
University of California, Berkeley. 

"Michigan has something else going for it: A skilled and available
worker base," Shaiken said. " I don't think the strikes will be
defining. Michigan remains a place to invest." 

Shaiken pointed out that the UAW reached highly competitive labor
agreements with Detroit's Big Three automakers last year with relatively
minimal labor disruption. Some expected those short walkouts to last
weeks. 

That agreement, and job guarantees that the union won, helped keep
existing manufacturing in Michigan. 

In GM's restructuring plan unveiled last week, the company slated four
plants for closure, but only one was represented by the UAW and none
were in Michigan. One of the factories to be shuttered was in Mexico,
while plants in Flint and Detroit were told they would get new products.


Gov. Jennifer Granholm has pushed initiatives to both attract and
retain manufacturing, as well as new industries such as filmmaking and
alternative energy. 

"Companies are choosing to invest in Michigan because of our
competitive business climate, outstanding work force, and our unmatched
quality of life," she said last week during a visit to a Bay City
software firm. 

Alabama lures foreign plants
Alabama is one of the states that has successfully courted the likes of
Honda, Toyota Motor Corp. and Daimler AG's Mercedes-Benz. 

Steve Sewell, executive vice president for the Economic Development
Partnership of Alabama, said availability of an educated work force is
the top concern for such companies, but Alabama's status as a
right-to-work state is often touted. In right-to-work states, joining a
union cannot be a condition of employment. 

"Right-to-work can be an advantage if a company wants to have a direct
relationship with its employees, without a third party," he said. 

Michigan's best opportunity to gain new manufacturing jobs is in areas
outside Metro Detroit, Cole said. 

He said Michigan needs to break its "monolithic image" of wage rates
and unionization levels being the same statewide. Foreign companies
often don't realize that outside southeast Michigan, the state has wage
rates and levels of unionization comparable to Southern states, Cole
said. 

A Center for Automotive Research study also has shown that foreign
corporations do not like to compete with similar companies for labor.
But they also seek a well-educated work force and a strong education
infrastructure -- one of the things Michigan's public universities
represent in many areas of the state. 

"Southwest Michigan and the Thumb are potentially very attractive areas
to locate," Cole said. "In the Saginaw-Flint-Detroit corridor, that's a
hotbed for engineering, but you're not going to see much new
manufacturing." 

You can reach Eric Morath at (313) 222-2504 or emorath@xxxxxxxxxxxx




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