The Michigan Daily — michigandaily.com
News
Thursday, February 5, 2015 — 3A
of the assembly line in 1913 used to
create the Ford Model T.
Fast forward to the 21st century.
Even before Detroit filed for bank-
ruptcy, the industry’s production
was not what it used to be. Car com-
panies struggled as the economy’s
health declined. In response, the
U.S. government created a short
incentive program, called Cash
for Clunkers, designed to renew
demand for vehicles at a time when
the market struggled for cash.
Between July and August 2009,
buyers who turned in old, fuel-inef-
ficient vehicles received a financial
break on a new car.
Yen Chen, a senior research
economist at the Center for Auto-
motive Research in Ann Arbor, co-
published a research memorandum
in 2010 documenting the program’s
success. He found that 44 percent of
light vehicles sold in these months
were due to the program.
“For the first time in a long time,
the industry experienced the first
signs of recovery,” Chen said.
As production rebounded, work-
ers returned to production lines.
Chrysler and General Motors com-
pleted restructuring and a planned
bankruptcy that shut down produc-
tion during most of the summer
of 2009. Combined with external
monetary support and a healing
economy, the industry began to take
a turn for the better.
As the economy stabilized and
Americans
found
employment,
Chen said those workers also pur-
chased cars to ensure their ability to
get to work.
“When people find jobs, they
need a vehicle to commute,” he said.
“The major reason behind vehicle
sale, from my point of view, is full-
time employment. People find full
time employment, they need to be
able to commute daily.”
Schwartz, who was general
director of labor relations at Gen-
eral Motors during the mid-1980s,
was responsible for planning union
negotiations.
Schwartz remained on the team
through the restructuring of 2009.
He recalled the negotiations that
attempted to halt decline.
“In ’07 the company was sink-
ing, so something had to be done,”
he said.
He cited labor laws as one factor,
along with disputes over General
Motors’ wages compared to those of
Toyota. Another important issue, he
said, resulted from General Motors’
retirees relying on pensions. Their
number of retirees was larger than
a company like Toyota, which was
much newer to the United States.
“We were carrying hundreds of
thousands of retirees, but of course,
since Toyota didn’t come in until
1988, they weren’t carrying hardly
anything at all,” he said.
That year, General Motors nego-
tiated to turn the liability of about
400,000 of its retirees to the Volun-
tary Employee Beneficiary Associa-
tion, a type of trust fund permitted
under federal tax law. Though this
wouldn’t take effect until 2010, the
move freed General Motors from
a significant amount of financial
responsibility.
“Billions came off the books,”
Schwartz said.
Another major, still controversial
aspect of that year’s negotiations
was the creation of a two-tier wage.
Because wages were relatively high
for workers not staffing the line,
especially compared to Toyota, the
company decided that incoming
workers would receive a starting
salary of $16 per hour instead of
$28.50.
Schwartz said the goal was to pay
less for easier jobs. However, work-
ers who had been with the company
for many years had earned senior-
ity, and thus tended to opt for easier
work. To avoid paying senior work-
ers less, negotiators decided that the
lower, second-tier wages would be
automatically given to new workers.
“VEBA and second-tier wages
went a long way in reducing the gap
between the Big Three and Toyota,
Honda, Nissan as far as labor rates
are concerned,” Schwartz said.
“Plus, we could bring more work
into the plant.”
However, the climate took a bad
turn when the 2008 financial crisis
occurred. Sales dropped by about
40 percent, a significant decrease
for automobile manufacturers. Ford
was able to borrow money from
private financial institutions, but
Chrysler and General Motors had
to turn to the government after the
banking crisis hit the private sector.
This led to the 2009 negotiations
that involved the undoing of the
second-tier wage ceiling and the
discontinuation of a long-standing
jobs bank, a program that allowed
laid off workers to continue receiv-
ing some benefits.
“The whole contract was very
painful for everybody, especially
the union,” Schwartz said. “I give
them a lot of credit on the ‘09 nego-
tiation.”
Schwartz expressed the widely
held belief that the government
came out ahead by avoiding the
cost of social welfare that would
have resulted if General Motors
had gone bankrupt.
In terms of Detroit as an indus-
try city, Schwartz thinks it’s mak-
ing a comeback.
“We really haven’t picked up
any market share, but we haven’t
lost like we were losing before and
sales are good,” Schwartz said.
“We’re making money.”
can in every community has a
right to pursue happiness,” Bush
said Wednesday. “They have a
right to rise.”
Bush told the crowd that since
the 2008 economic recession,
the country has seen some eco-
nomic relief, but still has a long
way to go.
“The recovery has been every-
where but in the family pay-
checks,” he said. “The American
Dream has become a mirage for
far too many.”
Speaking specifically to the
younger demographic, Bush said
Americans need to embrace the
period they live in and view their
difficulties as economic oppor-
tunities.
“We need young, dynamic
people that can make immediate
contribution to our economy,”
Bush said. “We shouldn’t be fear-
ful of this. We should say, ‘What
an incredible opportunity.’”
He said to the solution to
increasing opportunity is grow-
ing the economy, citing problems
with the American education
system as connected the state of
the country’s economy.
“It’s an economic issue, but it’s
also a huge moral issue,” Bush
said on education. “Our country
doesn’t do this well. These huge
(income) gaps that exist are now
increasing because of education
dropouts. This is not the envi-
ronment that has led the world.”
Bush said he aims for the U.S.
economy not to accept anything
less than an annual 4-percent
growth rate, which he added
could contribute to narrowing
the opportunity gap.
“Trust me, if we grew at 4 per-
cent, our growth, income rising
from the middle, people have
a chance to leave poverty, we
would help other countries that
will prepare to follow suit,” he
said.
Bush also said immigration
reform should be viewed as an
economic issue, not a political
issue.
Immigration has been moved
to the forefront of the nation-
al political agenda, recently
following
President
Barack
Obama’s controversial plan to
expand eligibility for immigra-
tion deferral. Republicans have
unsuccessfully voted twice to
defund the plan in recent weeks.
Bush added that Americans
and immigrants should cherish
their heritage and identity.
“In that, we would reestablish
this unique American experi-
ence, which is you come, you
work hard, you embrace these
values and you’re as American as
anybody that came on the May-
flower,” he said.
Addressing
his
as-of-yet
uncertain 2016 campaign, Bush
said if he decides to run, he
does not want to participate in
the negative rhetoric associated
with campaigns.
“If I go beyond the consid-
eration, I hope I have the dis-
cipline to not turn back and get
into the food fights,” Bush said.
State and national Democrats
responded strongly to Bush’s
speech Wednesday citing what
has become a familiar criticism
for Republicans in Detroit —
criticism of their stances on the
2008 auto bailout. That point
was also raised during the 2012
election for then-presidential
candidate Mitt Romney, who
penned an editorial in 2008
titled “Let Detroit Go Bank-
rupt.”.
Obama delivered a speech in
Metro Detroit last month tout-
ing his administration’s efforts
to strengthen the auto industry.
“Jeb Bush has an interesting
sense of humor going to Detroit
to talk about urban revitaliza-
tion, after opposing the auto
rescue that is helping Detroit
and Michigan rebound from the
recession,” said U.S. House Rep.
Debbie Wasserman Schultz (D–
Fla.), chair of the Democratic
National Committee, in a state-
ment. “But it shouldn’t come
as a surprise. This is the same
guy who supports massive tax
breaks benefitting the wealthi-
est Americans and biggest cor-
porations at the expense of
working Americans. And it’s the
same guy who has spent much of
the past decade enriching him-
self at big banks and concocting
problematic business deals.”
Bush is not the first potential
presidential candidate to stop in
Metro Detroit in recent months.
In November, former Secretary
of State Hillary Clinton cam-
paigned for Democratic candi-
dates in Rochester Hills, Mich.
In August, Sen. Elizabeth War-
ren (D-Mass.) campaigned for
then Rep. Gary Peters during his
successful campaign for the U.S.
Senate.
BUSH
From Page 1A
AUTOS
From Page 1A
relations with Cuba, including
a push to end a trade embargo
between the two countries. The
announcement signaled an end-
ing to a decades-long period of
no formal relationship between
the two countries.
The program, held at the Ford
School, was co-sponsored by
the Center for Latin American
and Caribbean Studies, Michi-
gan News, the Ford School of
Public Policy’s International
Policy Center and the Cuban
Research Institute at Florida
International University.
The
panelists
included
Anthropology Prof. Ruth Behar;
Silvia Pedraza, sociology and
American
culture
professor,
Pedraza and Public Policy Prof.
Melvyn Levitsky, the former
U.S. ambassador to Brazil.
Pedraza
highlighted
the
ambitions
both
countries
brought to the negotiation pro-
cess, which included immigra-
tion and travel policies; U.S.
possession of Guantanamo Bay;
the trade embargo levied by the
U.S against Cuba and access
to
telecommunications
for
Cubans.
She said she believed the
United States and Cuba would
come to agreement on a number
of those concerns, but that some
issues would remain points of
contention.
Levitsky said because more
than 160 countries currently
have relations with Cuba, in
general, having a diplomatic
relationship with the country
is no longer viewed as excep-
tional.
He added that he thinks for-
mal relations with the country
have an impact on relationships
beyond the government itself.
“It’s important to have diplo-
matic relations so that you can
have a dialogue with the gov-
ernment even if it’s an unfriend-
ly relationship,” Levitsky said.
“An establishment of relations
does not suddenly mean we’re
going to become friends with
the Cuban government. But it
may, in fact, allow us to become
more friendly and closer up
with the Cuban population.”
LSA senior Marianna Yama-
moto, who attended the panel,
said she thought the three dif-
ferent perspectives on the panel
provided a well-rounded bal-
ance of expertise across subject
areas.
“This is something that’s
happening now,” she said. “It’s
really going to affect our future
and we have a lot to look for-
ward to, I guess, and see how
this plays out, and I think we
can all learn a lot from the situ-
ation.”
Lenny
Valerio,
program
manager at the Center for Latin
American and Caribbean Stud-
ies, said she anticipated more
events on U.S.-Cuban relations
in the future.
“We hope to keep organizing
events not only on U.S.-Cuba
relations, but also on Cuba’s
own historical, cultural and
political relations to other Latin
American countries,” she wrote
in an e-mail interview. “I think
that the re-establishment of
diplomatic relations with the
U.S. is an excellent moment to
reassess Cuba’s influence in
Latin America and the Carib-
bean.”
CUBA
From Page 1A
said that he didn’t view the
potential recruiting obstacles in
his way as impediments.
“It wasn’t difficult — it was a
real joy, a real pleasure,” Har-
baugh said. “Just the things
that I learned about some of the
players that were already com-
mitted under Coach Hoke and
his regime, and they did a tre-
mendous job.”
Harbaugh’s first recruiting
class at Michigan will consist
of 14 players, just six of which
were
committed
to
Michi-
gan before Harbaugh’s hiring.
Though Harbaugh said that
the recruiting process hasn’t
changed a great deal since he
last recruited at Stanford five
years ago, he noted that begin-
ning his new role required some
level of adjustment.
“Did I just go right into it and
pick up where I left off back
when I coached at Stanford?
No, I picked up two days after
an NFL season,” Harbaugh said.
“Had to familiarize yourself
with who the players are, high
school coaches again, hadn’t
spent a whole fall evaluating
tape coaching the San Francisco
49ers.”
Toughness
and
competi-
tiveness were two of the key
attributes that Harbaugh was
searching for in this recruiting
class. Given the late start for his
staff, a class filled with four-
and five-star players seemed
unlikely. Still, Michigan man-
aged to pull off some surprises,
compiling a class that had four
players ranked among ESPN’s
top 300 recruits.
One of those players is four-
star quarterback Zach Gen-
try,
who
Harbaugh
flipped
from Texas on Jan. 24. Gentry
and another four-star recruit
according to ESPN, early enroll-
ee Alex Malzone, will bolster
the depth of Michigan’s quar-
terback corps, a position group
that returns minimal experi-
ence.
But it wasn’t positional needs
that seemed to excite Harbaugh
most for this class. Known for
his competitive nature, there
seemed to be an extra sense of
pride in Harbaugh’s voice when
he talked about the competitive-
ness of the players, particularly
Keith Washington, a relatively
unheralded cornerback recruit
from Alabama, who committed
to and signed with the Wolver-
ines on Wednesday.
When Harbaugh and defen-
sive coordinator D.J. Durkin
went to Alabama to visit, they
sat
with
Washington
and
his father, discussing Wash-
ington’s
speed.
Washington
claimed to run a 4.3 40-yard
dash time, which would be on
par with some of the faster
players in the NFL. Initially,
Harbaugh doubted his claim.
“He goes, ‘I’ll go out in the
parking lot and run it for you
right now,’ ” Harbaugh said
with a laugh. “And he was seri-
ous, dead serious. I liked him
even more. I knew he was a
competitor.”
The Michigan ties of his
recruits were another point
of pride for Harbaugh. One
was three-star recruit Jon
Runyan Jr., the son of former
Michigan star Jon Runyan.
Harbaugh said he was told
Runyan Jr. wore a Michigan
onesie when he was a year old.
Kicker Andrew David grew up
a Michigan fan. Harbaugh said
four-star safety Tyree Kinnel
was handed a Michigan foot-
ball at birth. Grant Perry — a
three-star wide receiver who
attended Birmingham (Michi-
gan) Brother Rice along with
Malzone — grew up getting
autographs
from
Wolverine
football players.
After Harbaugh’s presser,
Michigan added another player
with close ties to the program
in three-star tight end recruit
T.J. Wheatley Jr., the son of
Michigan running backs coach
Ty Wheatley, a former Wolver-
ine standout himself.
Harbaugh said he hasn’t
watched a great deal of tape yet
on his current team, instead
preferring to give all of his
players the opportunity to
make a first impression. The
same logic will apply when
assessing early playing time for
the members of this recruiting
class.
“They have the license and
the ability to do that,” Har-
baugh said. “All things will be
earned on the field. There’s no
guarantees,
only
opportuni-
ties.”
SIGNING DAY
From Page 1A
opposite-sex couples. They are
all marriages, full stop, for the
purpose of every distinction as
to which that question is rel-
evant under Michigan law.”
The 300 marriages were per-
formed during a brief window
between a separate district
court decision — which ruled
the state’s same-sex marriage
ban unconstitutional — and a
stay on that decision. The mar-
riages faced legal uncertainty
while a larger legal battle over
the legality of same-sex mar-
riage nationwide ensued.
Michigan’s ban on same-sex
marriage is currently before
the U.S Supreme Court, with
oral arguments expected to
occur in April, after the Sixth
Circuit ruled late last year that
the ban was constitutional,
overturning the district court’s
decision.
Snyder said he looked for-
ward to that ruling to deter-
mine the overall legality of
same-sex marriage.
“This is an issue that has
been divisive across our coun-
try,” he said, “Our nation’s
highest court will decide this
issue. I know there are strong
feelings on both sides of this
issue, and it’s vitally important
for an expedient resolution that
will allow people in Michigan,
as well as other states, to move
forward together on the other
challenges we face.”
Proponents of same-sex mar-
riage in the state and beyond
applauded the decision to let
the marriages stand Monday
afternoon.
Ingham County Clerk Barb
Byrum, who was one of several
county clerks to issue licenses
to same-sex couples in March,
said in a statement that the
decision was the right choice
for the state.
Because the district court
decision occurred over the
weekend, not all clerks opened
their offices.
“Love has won today for the
300 same-sex marriages that
took place last spring, affording
these couples the rights they
deserve, like all other families
under the law,” Byrum said.
“This is a critical step forward
in our fight to secure the free-
dom to marry for all Michigan-
ders.”
Brad O’Connor, president of
the Jim Toy Community Cen-
ter, which serves as a resource
for the LGBTQ community in
Washtenaw County, commend-
ed Snyder on saving taxpayer
money through not pursuing
the case further, though he
noted the state was still pursu-
ing an appeal of the case on the
same-sex marriage ban.
“I’m relieved that the gover-
nor decided to not appeal this,”
he said. “I commend him for
taking the taxpayers into con-
sideration — it’s a good step.”
MARRIAGE
From Page 1A
FOLLOW US ON TWITTER
@michigandaily