September 16, 2012
General Motors Recovery and the Influence of Social Stigmas Faced By Industrial Workers
The 2008 bailout of General Motors remains a focal point of economics analysts and political journalists. Today, nearly four years after its corporate collapse, reporters alternate between glowing praise and sharp criticism. However, regardless of journalistic viewpoint, one fact cannot be ignored: General Motors has clawed its way back up Fortune Magazine 2012 rankings into 5th place of America’s largest revenue corporations (Morgenson 1).
The second observation that can not be ignored is that the press and public opinion during the recovery period have focused heavily on corporate leadership and the politicians who engineered the bailout. A crucial factor missing from the news articles: The devotion shown by designers and assemblers at General Motors who have banded together to prove that they can produce a world class product at a competitive price. The thousands of headlines during the period the followed the auto industry meltdown reflect the values with which modern Americans view industrial workers, providing recognition to white collar workers and leaving unmentioned of the achievements from the engineering and the industrial trades, this shift in values may be contributing to declines in domestic production.
Much of this anti-union and industry sentiment results from taxpayer resentment of the government rescue of the world’s largest automaker General Motors, that left the American taxpayers owning 31.9% of the common stock. Today GM rightfully wages a daily war on two fronts: normal industry competition and now the new front of public relations, under a microscope of press scrutiny and public opinion. While this scrutiny seems to have generated results with increased accountability, as units sales climb, product ratings improve and as profitability reaches new levels. This can be seen in the 2012 employee profit sharing plans, which will provide dividends to compensate for a large portion of the pay cuts hourly employees had accepted as part of the restructuring plan. According to an article in the New York Times that for 2012 it is projected that “45,000 union workers would receive profit-sharing checks averaging $4,300, the most in the company’s history” (Morgenson 4).
However, many industry critics present pessimistic statistics possibly influenced by political agendas and an ingrained anti-industrial sentiment. In an example, an article that opens with anti-Obama critique, industry writer Louis Woodhill wrote a scathing review of GM products in the August edition of Forbes under the shocking title “General Motors is Headed for Bankruptcy—Again”. In the article Woodhill interprets a scoring aspect of recent “Car and Driver” review with:
“Not only was the 2013 Malibu (183 points) crushed by the winning 2012 Volkswagen Passat (211 points), it was soundly beaten by the 2012 Honda Accord (198 points), a 5-model-year-old design due for replacement this fall. Worst of all, the 2013 Malibu scored (and placed) lower than the 2008 Malibu would have in the same test.”
Despite a moderate share of negative press many Americans, influenced by recession and unemployment are reconsidering purchasing American industrial products in hopes that their support will result in a mutually beneficial environment for the American economy. This attitude is shared in the New York Times news article titled “General Motors 2012 Earnings: Second Quarter”, which while presenting a negative spin on GM’s European subsidiary, the article does present a positive spin on GM’s domestic operations with the paragraph:
“In its new carnation, the automaker is proving that it can be profitable at a lower sales volume. The company announced in February 2011 that it earned 4.7 billion in 2012, the most in more than a decade. It was the first profitable year since 2004 for G.M. which became publicly traded in November 2012, ending a streak of losses totaling about $90 billion” (Morgenson 1).
However recently an equal number of industry writers have taken a middle of the road stance on the American auto industry such as the CNN Money article entitled “A Recovering GM is Losing Ground at Home” which despite opening with the statistic that GM lost nearly 2% of the domestic market share in 2012, the article goes on to cite the influence of external factors by quoting auto industry economist Sean McAlinden with “Its very complex, the latest downturn isn’t from lack of sales, it is the result of GM closing down 3 million units of production facilities to improve profitability.” The article also offers hope in the second paragraph with “The Cadillac division in coming months will benefit from two key new model introductions” (Levin 1).
Economists and political journalists write about GM leadership strategies and shareholder returns but ignores those autoworkers putting in the effort day after day to prove that they can once again dominate the global automobile market. This critical public opinion of American manufacturers and the negative stigma of industrial trades is withoutquestion the greatest obstacle of corporate moral. The resulting negative self-image among industrial workers slows the progress of American industry and that anti-industrial sentiment begins with the attitudes that modern Americans view those industrial jobs.
Over the past 150 years careers in manufacturing goods that were once viewed as hi-tech careers are perceived by many with a negative stigma. This negative connotation is fostered through the American educational system, especially seen in views of the parents of school children in manufacturing communities. The attitudes being imbedded in schoolchildren are that by studying hard and earning professional credentials that they could escape a dirty and dangerous, low paying life of industrial work. Those children later grow into consumers that believe that through hard work and achievement that they “escaped industrial servitude” with careers in medicine, science and especially education and who grow up to resent industrial workers earning similar wages who in their eyes have not earned the right to those wages through scholastic self-improvement. What many educated professionals do not realize is that those high paying industrial jobs need to offer compensation levels that can attract reliable workers to fill jobs with much less desirable working conditions.
These anti-industrial trade values are crippling todays American manufacturing companies, especially in the automobile industry. A slow drive throught the parking lot of any white collar company such as JP Morgan here in Tampa and you can count that nearly 85% of white collar workers in non-industrial cities buy foreign produced automobiles and the 15% of the exceptions to that rule are almost exculsively those few who desired the largest of SUV’s that do not have foreign counterparts. Polling these owners for an explanation, uncovers the nearly universal response offered by import owners, is their belief that the American manufacturers produce an inferior, unreliable product. Many that offer this assumption often admit that they had never owned a new American car for comparison, and deveolped these opinions from information from the press.
The declines in American manufacturing will likely continue until society offers industrial achievement similar recognition to those contributing to the advancements in computer technology and finance professions. You can not build a championship team without being able to recruit the best engineering talents entering the workforce and you can not obtain those cream of the crop graduates to accept a job in an industry with a sinking prestige factor.
Levin, Doron. “A Recovering GM is Losing Ground at Home”. CNN Money. May 11, 2012
Ed. Morgenson, Gretchen. “General Motors 2012 Earnings: Second Quarter”. The New York
Times. August 2, 2012
Woodhill, Louis. “General Motors is Headed for Bankruptcy –Again” . Forbes. August 15, 2012