Beyond the Bailout: Why We Need a Regional Effort

Winter came early to the Mahoning Valley this year. Just last August the corporate, union, and political leadership of our community gathered in a makeshift auditorium on the floor of the Lordstown plant to hear GM’s CEO Rick Waggoner pledge  to replace the Cobalt with a new “world car,” the Cruze. This announcement came on the heals of GM’s announcement that it was adding a third shift and recruiting redundant workers from Shreveport, Louisiana and elsewhere. Many believed that, after years of hard choices the Mahoning Valley could finally compete in the global marketplace with a car people would buy because of its design, quality, and fuel efficiency.

But then the blizzards came. First was the banking meltdown. Investment banking houses folded over night.  Then came the credit crunch, as commercial banks began to severely constrain their lending practices.

The results of these two storms have been catastrophic for the automobile industry. Lack of consumer credit and unemployment-or the fear of unemployment-have caused car sales to plummet As a result, GM has cancelled Lordstown’s the third shift and furloughed workers-many of whom recently moved to the Valley to take up what appeared to be secure jobs.

And then a third storm-Federal indifference-hit the automobile industry and impacted the entire Great Lakes. The Big Three automakers flew to Washington to make their case for financial assistance. They came prepared-or so they thought-for a fair hearing. But, a hostile Congress rejected their plea. Instead they demanded that the Big Three pursue “planned bankruptcy, ” the UAW immediately agree to givebacks, and at least one CEO-preferably GM’s Wagonner-resign.

In the midst of all of this posturing, the impact of industrial bankruptcy on our region’s communities was once again conveniently ignored.  Although Bush stepped in on Friday with a bridge loan, the industry’s challenges – and the risk to the region should the auto industry ultimately collapse – remain.

This is not a new story. Since the collapse of Detroit’s Packard Motor Car Company in 1956 the nation has failed to anticipate and effectively address the impacts of deindustrialization on Great Lakes communities.

The incoming Obama administration, with a Great Lakes president who won with solid support from the region offers some hope that Washington will change this approach. Given entrenched opposition to our economic interests, however, we must develop effective strategies that will address the challenges facing our entire region. To do so we should take a page out of the Southern states’ playbook.

The Southern states, whose senators and representatives expressed some of the strongest enmity to the Big Three, has long taken responsibility for its economic future. In 1971, the governors of 13 southern and border states established the Southern Growth Policies Board to develop sophisticated data-driven regional economic development strategies to address the needs of the entire Southern regin.

The Great Lakes states, by contrast, have made only modest region-wide economic development efforts, choosing to focus principally on preserving the integrity of the Great Lakes watershed. As a consequence, region-wide economic challenges-be they shrinking cities or threatened core industries-are poorly understood and ineffectively promoted at the national level. Crisis management has become the norm as individual industries and communities have been left to fend for themselves.

The time for action at the regional scale is now. The debacle of the automobile bailout debate demonstrates that the leadership in other parts of our country-on the coast and in the Southern states-has little understanding of or concern for the interests of our region’s historically industrial communities. An eleventh-hour campaign to save companies on the verge of bankruptcy is not an effective way to advance region-wide interests. Concerted, data-driven public policies informed by the experiences of other, similarly challenged regions in this country and abroad, are the only way out of a structural economic crisis that threatens our people, our places, and our way of life.

As the South has risen, so must the industrial North: don’t complain, organize.

Hunter Morrison

This entry was posted in The Working Class and the Economy, Youngstown and tagged , , , , . Bookmark the permalink.

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