What Happens When a Factory Closes

This up-close view of the end of a factory in Detroit is valuable for both policy makers and general readers.

By Margie Burns

“Punching Out: One Year in a Closing Auto Plant” details the last months and ultimately the last days of a Detroit manufacturing plant. It is the second title by Paul Clemens, whose first book, “Made in Detroit,” described growing up in the motor city. The Budd Company, a large factory that stamped frame parts for automobiles — side panels, roofs, doors, fenders, etc. — closed for good in 2007. The company had been founded in 1912 by Edward G. Budd, the man who came up with the bright idea — genius, in its time — of making automobile bodies out of steel instead of wood. Although the Budd company never became a household name like Ford, Chrysler and General Motors, its key developments were highly significant in the auto industry, and over the decades of its history the company employed thousands of skilled auto workers. Its end came only after parent company Thyssen, which bought Budd in the 1970s and is given good marks by the employees quoted in “Punching Out,” merged in the 1990s with another German company, Krupp.

Krupp, famous for, among other things, being a Nazi armaments maker, comes out looking about as good as it usually does in post-World War II books. The author states early in the book that the profits from the Detroit plant, renamed ThyssenKrupp Budd, enabled the German corporation to build — and then to sell — other plants in Kentucky, Canada and Mexico. The Budd plants in the other states and countries were sold by Krupp to Canadian auto supply company Martinrea International. Budd Detroit was shut down.

The closure, however, was a massive undertaking in itself, and the book chronicles the story in five chapters, as well as a prologue and epilogue. Clemens spent over a year and a half tracking the narrative in Detroit, including many weeks on site physically in the plant itself, alongside the men who had the job of dismantling the machinery and shipping its essential stamping equipment to construct new  factories in Mexico and Brazil. For the epilogue, Clemens even flew to Aguascalientes, in central Mexico, to see the new factory there. The final picture of “how thousands of tons of press line had come apart, piece by piece, and been put on truck after truck and hauled mile after mile across a border and then rebuilt, from the bottom up, based on pictures taken a year before and half a continent away” represents an awesome achievement of industrialization, regrettably accomplished.

The book deals candidly throughout with differences between union and non-union workers, including varying views on unionization among people whose working conditions suggest that they could use a union. It also relates the difference in wages between workers employed in Detroit and workers employed in Aguascalientes. According to a manager there, line workers in the Mexico plant made about 3,500 pesos a month, and technicians made about 7,000 pesos a month. These salaries translate at today’s currency exchange rate to $300 and $600 a month, a cost savings achieved mainly because a multinational employer can take advantage of currency variations, but not an adequate wage even with the lower cost of living in Mexico. Thus in the current onslaught against labor and the ongoing corporate push to ship jobs abroad, one obvious defensive strategy for U.S. labor to adopt is that of the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO): support and encourage labor organizing in what used to be called ‘Third World’ countries and what are now called developing nations or ‘emerging markets.’ After all, there is no god-given reason why a multinational should grasp an advantage even beyond that offered by currency exchange rates, to pay wages lower than the local cost of living in whatever country it has moved a factory to. (This point is a reminder that if ‘globalization’ continues indefinitely, logically it should finally reduce currency variations.)

“Punching Out” would be a valuable read for policy makers as well as for general readers. The liveliest narrative is contained in chapter three, titled, auction-style “Assets Formerly of Budd Company Detroit.” Detailed internal description of the plant and of the people still working there — engaged at this point in winding down the company and/or helping employees with their labor issues — provides an on-the-floor perspective of issues that arise when a company closes. But the book throughout provides a view of the effects of unemployment or forced retirement for, as said, our policy makers. Much of chapter one, titled “Settle Labor Issues,” follows the efforts of an International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) local benefits representative, an older auto worker, who works with and tries to protect the people whose jobs at the plant are ending. Significantly, ThyssenKrupp is shown still negotiating to the last to reduce benefits, even as it gets rid of its final few hundred Detroit employees. At the time of the book’s writing, one older retiring worker, on the phone with the benefits rep, has just been offered $75,000 on top of his retirement payout by the company — in exchange for giving up his lifetime health coverage. Counseled against the deal, he seems to accept it.

A lesson unlearned by one individual can still be learned by policy makers and  the general public. The point is fairly simple: if in the future this retiree, and others like him, falls ill or needs health care, and he no longer has his company’s health coverage, then the public will have to foot the bill. Thus the longer ThyssenKrupp, and other companies like it, drag out negotiations or seek to cut health coverage, the more individual employees and retirees will have to be cared for by the public — meaning largely the U.S. taxpayer. While Clemens does not raise the issue of corporate tax rates in this book, which also does not go into detail on health care costs, the company history and actions detailed do go to the issue.

One of the strengths  in this generally excellent book is the way it deals with language. A couple of excerpts illustrate how emphatically the language of people who actually work at Budd Detroit trumps that of the people getting rid of them. From one of the workers, on the factory being dismantled:

It’s a crowning jewel. We’re not the king of England, but it’s something [my dead relatives] passed on, and it’s something . . . that needs to be done. You can’t leave this here, to rot in history. There’s still life left in these machines. It’s real important that they keep doing what they do, because a lot of people gave a lot of sweat and equity that has gone into these machines. You can’t measure it. You can’t measure the lives, you can’t measure the lunches, the allowances, that people were able to give their kids. (109)

Generously, the speaker wishes well to families of Mexican employees who will be working with the machinery henceforth: “It’s why we’re taking such care getting this thing out of here.”

Contrast the language quoted mercilessly from a ThyssenKrupp handout:

Against the background of a visibly weakening world economy . . . It is vital to identify internal value-adding potential . . . This corporate value-enhancement program takes an integrated approach with a self-supporting dynamic to achieve a sustainable increase in value . . . The success of ‘ThyssenKrupp best’ is very much in the interests of the workforce: only a successful company can offer its employees secure and challenging jobs with good prospects. (138)

Admittedly this is not a fair contest — three generations of automobile workers behind the texture of the first quotation, multiple echelons of corporate human resources and public relations behind the other. You would expect the first to show more vibrancy.

The contrast does reinforce what is demonstrated by the book throughout, namely the immense wealth created by the hard work and skill of thousands of automobile employees over the past century. Chapter four, titled “Surplus Industry Service Providers,” and chapter five, titled “Picking the Carcass,” reinforce the point in further detail. Both services for closing plants and large-scale scrapping, including the sale and processing of scrap metal to be shipped away, are thriving businesses in today’s U.S. economy. That so little, proportionately, of that wealth goes to the people who created it is a conclusion visible everywhere in “Punching Out” and is hammered nowhere, no more than it is hammered by most of the scores of working people interviewed.

All in all, “Punching Out” is an excellent read and a reliable print documentary.

Freelance journalist Margie Burns, Ph.D., lives in the metro D.C. area. She blogs at www.margieburns.com. She is the chair of the D.C. chapter of the National Writers Union.

Posted by Left Eye On Books on Aug 28 2011. Filed under Reviews. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry