Reckoning

by David Halberstam

  That was what was most ominous about the Japanese challenge in autos. To some it was more than just a growing imbalance in auto sales and a mounting trade deficit. They feared it might reflect an imbalance of values between the two societies, one poor but careful with its resources, the other rich and blessed and increasingly careless with its vast resources—the conflict, in sum, between the culture of adversity and the culture of affluence.

  Thus the bad news on the Goodyear sign in Detroit, which continued to proclaim disastrous auto production figures for 1982, might be even worse than it seemed. It might mean not only that the Japanese made better autos, that they had newer plants, that the relationship between workers and managers was better, but that Japanese society, with its greater harmony, its greater belief and discipline in basic education, its more limited personal freedoms, was better prepared for the coming century. That was the real crisis, the grimmer one that hung over America.

  By 1982 the sheer magnitude of this crisis had become evident to many. This was not some minor cyclical downturn but in fact might mark the beginning of the end of a historical era. Since the war, any difficulties in Detroit had been mercifully short-lived. A company might have brought out the wrong car in the wrong year and seen sales dive. Or the American consumer for a variety of economic and political reasons might have held back awhile on buying cars. People still talked about how terrible a year 1958 had been, because of Sputnik; Ford sales had dropped from 1.88 million units to 1.21. Just a bad year, everyone agreed, the first truly bad one in the postwar era. A hot car the next year, it was always said, would bring you right back. Sure enough, in 1959 sales had climbed all the way up again. But this crisis was different. There was a permanence about what was happening. It reflected basic changes in the nature of work and in the nature of the world economy. The time when the Big Three had something close to a global monopoly was over. No longer could Ford and Chrysler simply wait for GM to set the price so that they could set theirs, all under the attentive eye of a benign Justice Department that wanted no one to go out of business. In the new world economy the Americans were pursued by the Japanese who were pursued by the Koreans who were pursued by Hong Kong and Singapore.

  There were other, less visible signs of this fundamental change. That Japanese cars were flooding the American market was bad enough. But now Detroit was putting more and more Japanese and foreign parts under American hoods, which meant that hundreds of thousands of other jobs were quietly departing the country, part of an invisible erosion of the core economy. In some places manual workers on traditional assembly lines were being replaced by what Harley Shaiken, a knowledgeable professor at MIT and himself a former worker on the GM line, called “superautomation.” Superautomation, as he defined it, meant the coming of robots run by highly computerized control systems. Throughout this century, he pointed out, one of the most firmly held tenets of America’s broad-based and wildly successful capitalism was that high profitability was tied to broad employment. Workers eventually became consumers. But the coming of superautomation, Shaiken believed, was likely to sever that link. America was in transition from the old economy, which was focused on heavy industry, to the new economy, which was pointed toward high technology. The old American economy created jobs and wealth; the wealth was broadly based, shared among workers who were the best-paid in the world and the owners. The new economy was more brilliant, more stimulating for those who bet on themselves and won. It was filled with opportunities for talented, restless scientists to break away from their present companies, work night and day for three or four years on a certain small aspect of technology, and, if successful, to reap immense rewards, as would those venture capitalists who had been shrewd enough to back them. Both the scientists and the venture capitalists were likely to become rich overnight, but the inventions rarely created much in the way of jobs, or at least well-paying jobs. If there was a factory at all, it was likely to be small, nonunion, and, more often than not, overseas.

  By 1982, Shaiken had concluded that the auto executives no longer believed that they could compete with the Japanese in the old way. What they were trying to do, he believed, was create a different kind of auto industry, one that attained the same level of profitability through far lower levels of employment. Shaiken thought that the companies would make rising numbers of joint-production deals with the Japanese and the Koreans in the small-car lines, and that even with the larger cars an ever-growing percentage of parts would be made overseas. The portion of the manufacturing process that remained in America would be increasingly robotized. There was a danger, he and others felt, that the auto companies, almost without realizing it, were on their way to becoming marketing rather than manufacturing companies. A year later Shaiken went to a conference on productivity. There he heard an executive from RCA get up and say that RCA was proud to announce that it could now manufacture a television tube which was better and cheaper than anything Sony could produce. Shaiken was sitting in the audience half asleep when he heard the statement, and it brought him alive—that was really news. But even as he came alert, he realized that the executive was talking about RCA Taiwan, not RCA Indiana. To RCA it might be the same, but to the communities served by the company it was not. The effect of all this intrinsic change, Shaiken believed, was crushing to the general Middle Atlantic region. He saw a once-prosperous and vibrant heartland slowly turning into a vast new Appalachia, a tired region with a shrinking tax base, a withering school system, and diminishing hopes.

  Nowhere was the impact of these changes more obvious than in Michigan. In 1982 the official federal unemployment statistics placed the rate at about 16 percent compared to the national average of 9 percent. But in Detroit most people thought the rate was closer to 20 percent and in some communities as high as 25 percent. The reason was that the federal statisticians did not count the unemployed once their benefit checks ran out. They disappeared from the statistics. Sometimes they disappeared from Michigan itself, although the pain and humiliation of being jobless did not disappear.

  One of the great migratory movements in American history had brought rural Appalachian whites and poor Southern blacks to Detroit in hopes of industrial jobs. They had come to Detroit City, as it was known to them, from the hamlets of the South, lured by the promise of regular work and by paychecks that seemed the bounty of rich men. During boom periods, employers had gone through small Southern towns handing out just enough money to buy a one-way bus or train ticket to Detroit or some other Midwestern industrial city. After World War II, as Southern plantation owners mechanized (with the aid of federal subsidies) and forced the now unwanted blacks off their spreads, the jobless had come in even greater numbers.

  Now, in the erosion of the great American industrial core, the workers if not the managers had an intuitive sense that there was something indelible about the decline, and that the region would never again be what it had been, so by 1982 a new migration was well underway. It was sending hundreds of thousands of Americans, white and black, from the Great Lakes region to the booming, energy-dominated economy of the Southwest. For although the skyrocketing of energy prices had helped undermine the industrial base of America, it had made the business of oil and all its byproduct industries suddenly much more successful than ever. In 1982 the out-of-town papers that sold best in Detroit were the two Houston papers, the Post and the Chronicle, bought eagerly by men desperate to study the help-wanted columns. One unemployed auto executive, seeking to keep himself afloat financially, started driving to Houston each weekend; there, on Saturday night, he loaded up his small truck with copies of the Sunday papers and then drove all night back to Detroit in order to get there first and sell his papers at highly inflated rates. The two Detroit newspapers, both of which were losing millions of dollars, took a certain malicious pleasure in featuring articles about rising crime and unemployment in Houston. A Detroit magazine ran an article listing all the things wrong with the quality of life in Houston. It made no difference. Houston and th
e Southwest, surging on a brief energy boom, held out a hope that the Great Lakes region no longer did.

  The new migratory pattern reversed the old. One member of a family would go to Texas looking for a job on a rig. If he found one, he took the simplest housing available, sometimes sharing a trailer home with another worker. Soon he called back to Detroit, and another male member of the extended family arrived. If things worked out, women and children followed. Robert Teeter, a Michigan-based pollster for Republican candidates, was advising a group of Texas politicians about a forthcoming election. The one thing that puzzled him was the constant references to the “black-tag vote.” Which way, the politicians kept asking, would the black-tag people vote? Who, Teeter wondered, were the black-tag people? Were they blacks? Were they Vietnamese immigrants? Were they some right-wing faction? Finally he asked one of the Texans. “Oh, them,” the Texan answered, “they’re your people from Detroit—you know, they come down here with those black Michigan license plates on their cars, and their pro-labor ways, and we don’t have any fix at all on how they’re going to affect our politics.”

  Back in Michigan, the harsh, ugly signs of a depression were everywhere. Both the city and the state had nearly gone bankrupt. Perched precariously on the precipice of fiscal collapse, almost unable to keep its universities open, the state had been rescued by, of all people, the Japanese. It was the ultimate humiliation. A consortium of five Japanese banks had loaned Michigan $500 million to get through the fiscal crisis. Since the new Michigan public relations motto, designed to inject hope into a depressed population, was “Say yes to Michigan” (it was used in television commercials showing fresh-faced young people eager to go to work), an assistant to the assistant governor, George Weeks, said that the new motto should be “Say yen to Michigan.” In countless homes, once-solid wage earners were desperate for jobs. One small company, looking for a glorified messenger boy, decided to put an ad in the local paper. It never got around to it: word of mouth spread through town, and on a Monday morning some two hundred men had shown up at the office applying for a job as yet unlisted. When a department store needing two hundred workers was ready to open, it too never had to advertise. Somehow the word got out that the company was ready to process applications, and eighteen hundred people showed up. There was pain in daily existence as the lives of thousands of citizens collapsed. There were more broken homes, households where the men could no longer face the fact that they had failed as providers and simply left. Social welfare offices reported a dramatic climb in cases of wife and child beating. There was a major increase in suicides. The school system printed up small guide books for students whose parents were unemployed, telling them how to handle certain situations, warning them their fathers were likely to be shorter of temper.

  In many areas of the Midwest the pawnshops were doing a brisk business, but oddly enough this was not true in Detroit. One reason, a pawnshop owner said, was that by this time almost everything that could be pawned in working-class houses had already been turned in. What was particularly ominous in a city of industrial craftsmen, he added, was the number of skilled craftsmen who were pawning their most precious professional possession, their tool kits. These kits, worth as much as $2000 each, were the key to the livelihood of each man pawning one, so turning one in was the ultimate act of despair. In normal times, said one large pawnbroker, he might get two or three kits a month; now he was getting twenty or more. It was a sign, he added, of how mean the times were. A craftsman who pawned his tool kit was a man beyond hope.

  Everywhere one saw signs of decay in a city that once prided itself on its grandeur. Its early citizens had envisioned Detroit on a majestic scale. The thoroughfares would reflect nothing less than Paris, handsome boulevards radiating from the center of the city like giant spokes. Along them huge ornate buildings were constructed, some residential, some elegantly overwrought factories, monuments as much to the men who made them as to the products being manufactured. For fifty years some of them had stood, symbols of the city and the industry’s permanence. Now many were empty, the windows smashed, the parking lots deserted or used as centers for late-night drug action. The great thoroughfares were now pitted with massive potholes the city was too poor to repair, and frustrated people penned angry letters to the local papers. The auto industry, wrote one irate soul, would begin to pick up soon if enough Detroit citizens broke their cars in the potholes of the city’s streets. Wrote another: “Were we bombed on the east side? Did I miss a shelling on East Seven Mile Road between VanDyke and Kelly? Those aren’t potholes. They’re more like shell craters.” The streets were not safe, for the crime in Detroit was as great as or greater than that of any major city, and citizens driving short distances within the city locked their car doors and rolled up their windows in transit. The great downtown department store, Hudson’s, now part of a large national chain, announced that it would close. The downtown Hudson’s had embodied the city’s splendid past; the best people had come in from Grosse Pointe and bought the best goods there rather than go to New York for them, a reflection of stubborn Midwestern pride. Shopping at Hudson’s on Saturday had been a tradition, not just in Detroit but in all the surrounding Michigan cities. For there were no branch stores then, no suburban malls, to lure business away from center cities. A trip to Hudson’s was an event: Everyone in the family dressed up; there would be lunch in the store’s fine restaurant. In 1953, at the beginning of the Eisenhower era and the glory years of the auto industry, Hudson’s had done $153 million in retail sales; in 1981 the downtown Hudson’s had done only $44 million—a figure, if adjusted for inflation, about 6 percent of the 1953 total. Much of the merchandise was chained to the counters, and the better-quality goods offered by the store were now in the plusher, safer suburban branches. The announcement that it would close seemed to mark the end of an era. For after the race riots of 1967, the city had changed with a finality. The whites had accelerated their flight to the suburbs, taking stores, restaurants, law offices, and banks with them. The downtown had become a crater, a place entered warily by workers every morning and left in the evening as quickly as possible. Unsuspecting visitors were warned against staying at hotels bearing once-proud names, for reasons of security.

  Nothing seemed to go right for the city’s fathers. Their attempts to boost Detroit often went sour. The Super Bowl, an athletic extravaganza of considerable national importance, was secured for the new domed stadium in nearby Pontiac, in no small part because the car advertisers had considerable leverage in the world of television, which was of course the world of advertising. Having the Super Bowl in Detroit was considered a coup, a sign that the city was not yet defeated, that it would rise again. But the assembled sporting press, accustomed to having lush expense-account midwinter trips to New Orleans or Miami, arrived in Detroit in a foul mood. In print and on the air they complained about the city, the weather, the restaurants, the crime, the lack of easy access to the pleasures of flesh. One writer wrote that the first thing that Detroiters did for a good time, when they were able to afford it, was leave town. Others unkindly pointed out that much of the advertising done during the Super Bowl telecasts was for Japanese cars. Perhaps the unkindest cut of all came from Herb Caen, a nationally known columnist from San Francisco, who said that the city’s futuristic Renaissance Center, the personal pride of Henry Ford II, emblematic of the city’s coming spiritual renewal, in fact looked like the world’s largest cappuccino machine.

  It was, of course, not just Detroit that was mortal. The entire industrial heartland was in trouble. Throughout the Midwest once-great companies like International Harvester were on the brink of bankruptcy. The steel industry was in dreadful shape. Driving along the Monongahela River in Pittsburgh, a visitor could see once-mighty steel mills now cold and silent. On the roofs of their buildings were painted huge for-rent signs with phone numbers on them, in case anyone wanted to rent a steel mill. The steel business, even more than the auto business, was suffering dreadfully, unable to co
mpete with new, more modern foreign companies which were always subsidized by the parent government. U.S. Steel, once one of the most powerful and arrogant of American companies, now hoping to become less of a steel company, hoping in fact simply to survive, had moved to merge with Marathon Oil. Only a partnership with a rich oil company, its executives believed, would offer it any kind of future. Who otherwise would buy stock in U.S. Steel, an ailing company in a moribund industry that could no longer compete?

  For the foundry of the nation was sick. The factories were old. The cost of building new plants and adding new technology had, by inflation, grown so great that few companies in mature industries dared take the risk. It was easier to merge with existing companies than actually invest money and build something to compete in the difficult new world order. Management was top-heavy and soft. Managers groused about the work force (privately but not publicly, since management was trying to win concessions from labor in delicate negotiations that would reverse the gains of the last forty-five years); labor today, said management, was less diligent, less committed to the idea of work than the old work force, the children of the great waves of the European immigration. The workers in turn complained bitterly about executive salaries, bonuses, and perks. There was widespread agreement that something terrible had happened to the old-fashioned American work ethic, although everyone seemed to blame everyone else.

  Everyone had his own scapegoat—the Japanese, the government, the Arabs, Wall Street. No one seemed to accept any responsibility for any actions that might have sapped the country’s industrial strength. It was as if the country’s affluence had come so easily and stayed so long that no one was prepared for an era of diminishing possibilities. Now, it seemed to management, the government, in contrast to the governments of other industrial nations, was committed not to helping basic industries but to monitoring and hectoring them. That in itself was a sure sign of a nation’s reaching middle-class status; a poorer nation was grateful for any jobs that would help its people to achieve a minimally acceptable standard of living, while a society like America’s, with its governmental regulatory agencies, its innumerable citizens’ groups, took its material success for granted.