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777X anxiety aside, Seattle won’t become Detroit
The potential for Boeing to leave the area has some wondering if the Puget Sound region is headed for economic pain, like the Motor City has suffered. But unlike Detroit, this region’s economy is far more diverse.
Special to The Seattle Times
A specter is haunting Seattle — the specter of Detroit.
This anxiety, which I have heard from many readers since Machinists voted down a contract that would guarantee 777X production here, was articulated well by Jim Nordahl, of Woodinville, in a letter to the editor.
”I would urge all of the involved union members, Boeing and Washington state political leaders to look at the situation in Detroit as a stark reality of what will result from the union’s refusal to face the economic realities of international and interstate competition,” he wrote.
“If the union members think the rejected offer was ‘a piece of crap,’ wait until they see the ‘shadow of Detroit’ settling in on Everett and Puget Sound.’’
It’s good to run scared. Only the paranoid survive, as Intel’s Andy Grove taught. So let’s explore the Detroit analogy.
When we say Detroit, it carries two meanings: The American automobile industry and the city, which now sits in bankruptcy, the exemplar of urban dystopia. The two are connected.
Most of the auto industry was born from garage tinkerers at the turn of the 20th-century Midwest. Detroit became its center, thanks to Ransom Olds and Henry Ford.
Before the Big Three, Detroit had many car companies. Industry pioneer Billy Durant consolidated Buick, Cadillac and other automakers to form General Motors. Later, he helped found Chevrolet, which along with Oldsmobile would be bought by GM. Packard was also a pillar of the industry.
Automotive Detroit pioneered many of the most consequential innovations of early 20th-century industrial America. These included the assembly line; vertical integration, from making steel and parts to vehicle assembly and sales; and the modern management methods of GM’s Alfred Sloan.
Detroit was where Henry Ford paid enough so his workers could buy his cars. It was where, after sometimes bloody confrontations, the modern industrial union movement showed tangible gains.
Detroit was the heart of the Arsenal of Democracy during World War II. Afterward, it seemed to exemplify the rising middle class.
Soviet leader Nikita Khrushchev famously saw a Detroit auto plant and asked if the parking lot filled with gleaming new cars was for the capitalist owners. No, he was told, this was where the workers parked.
It was a magical moment in time, when the automotive age was at its zenith and gasoline was cheap.
All this made Detroit one of America’s richest and largest cities, especially in the first half of the 20th century.
But success of this kind brought dangers. Detroit was a one-industry town, based on mind-numbing mass production in huge factories, what scholars call “Fordism.’’
Seattle might be Jet City, but it was never the sole center of the aircraft industry. Not only that, but the Boeing Depression of the 1970s and the luck of Bill Gates coming home caused the metropolitan area to diversify its economy into high-tech.
Detroit suffered a poisonous history of race relations. Before the 1968 riots, from which many trace its decline, there was the 1943 riot that left 34 dead. Detroit was a Ku Klux Klan stronghold. Nothing like that exists here.
The Machinists union in the Puget Sound region has a history of militancy. But the United Auto Workers were very cozy with management after World War II.
This led to a complacency and lack of investment, documented by David Halberstam in his book “The Reckoning,” where American cars grew shoddy and the industry was unprepared for the arrival of Japanese imports, new production methods and the gas-price shocks of the 1970s.
Boeing, by contrast, has remained on the cutting edge of airplanes, even if recent management missteps echo some of the blunders of the leaders of the Big Three.
Detroit suffered white flight starting in the 1950s, followed by the move of much of the African-American middle class. Since 1950, Detroit has lost 1.2 million people.
A poll by The Detroit News shows 40 percent of residents plan to leave. Metro Seattle continues to grow.
While the Detroit metro area remains a potent economic center, the city suffered from loss of tax revenues, property abandonment and bad governance. City leaders borrowed a billion dollars but failed to cut expenses. The state promised money that never came. Again, no parallel with the Puget Sound region.
Later, the UAW spent years making concessions to ensure the viability of the Big Three. At Ford during the Great Recession, CEO Alan Mulally received more.
To the extent that labor is to blame, it is government unions that were showered with pay and benefits. Even Franklin Roosevelt didn’t believe in organized labor for the public sector.
Such unions in our area haven’t extracted these unsustainable promises.
Nor did Detroit’s crisis emerge overnight. An investigation by the Detroit Free Press traces the problems that culminated in bankruptcy back to 1950. Even Everett is unlikely to repeat these mistakes.
The only parallel is the incentives Detroit gave automakers to keep plants there, as happened throughout the Midwest, usually with disappointing results.
Finally, Detroit became America’s largest city that saw such highly concentrated poverty as the old factories closed. This created a poisonous feedback loop.
Seattle, on the other hand, is one of the most prosperous and globally connected cities in America. It attracts global talent to a variety of advanced industries and is one of the nation’s top startup hubs.
Detroit’s crisis was exacerbated by the Motor City’s car dependency. As jobs moved to the suburbs, city residents had few options to reach employment centers if they didn’t own an automobile.
This is not to whistle a grunge tune past the graveyard. If 777X assembly goes elsewhere and Boeing’s presence here declines, it will have profound consequences.
But the Puget Sound region’s genius for reinvention and continued global focus will see us through, although we may never again have as many well-paid, blue-collar jobs.
Having covered the auto industry, I knew Detroit, even if it was never a friend of mine. Seattle, you’re no Detroit.
The challenges facing this region will be our own.
You may reach Jon Talton at email@example.com
About Jon Talton
Jon Talton comments on economic trends and turning points, putting them into context with people, place and the environment in the Pacific Northwest