Archive for the 'industrial' Category

Industrial - Now Gone

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Job obsolescence and career change

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There have been plenty of discussions about job obsolescence in recent years. Whether it’s manufacturing, journalism, or the one closest to me, photography, workers in many industries have felt the impact. Of course I don’t think those professions are like the ones in this article on obsolete jobs, but certainly they have been heavily impacted by globalization and/or technological innovations and changes. There have also been plenty of stories of mid-life career changes whether by choice, or otherwise. In Michigan the focus has been on auto workers. And the stories have ranged from workers opening their own businesses, to retraining for the health care industry, to sadly, doing nothing. Fear and anger have been common themes in Michigan for some time now. While I am glad I’m not right out of college, or just trying to hang on until retirement (yeah, like that’ll ever happen for me…), I have experienced both job loss, and mid-life career change. Of course it is frightening to face an unknown future, while figuring out how to make a decent living. But I know it can be done. I’ve been there. I have never worked in the auto industry. No I was payed much, much less, for the majority of my career. But, nonetheless, this is my story of job obsolescence and career transformation.

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In between our country’s two most recent economic downturns, I managed to fulfill one of my goals; that of being a full time photographer. Like so many others, I had managed to make it all the way through college without any idea of what I’d like to do with my life. When I was younger, I had, at different times, wanted to be everything from a professional hockey player to an artist. All of them were very difficult, if not nearly impossible, to achieve. Unfortunately, I never had the desire to be an engineer, a doctor, or an accountant (though I’ve worked in two of the three fields (though, not the one that requires eight years of post graduate schooling and training). But finally, after jobs in sales, accounting, credit and collections, and working in various retail jobs, I began assisting a commercial photographer. Eventually I became the studio manager. At the same time, I began to build up my own business,  and after several years, I finally managed to get enough work to actually call myself a photographer…just in time for the industry to tank.

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I am no longer a full-time, professional, photographer. I still make money from it, but it no longer makes up the majority of my income. I know photographers who are barely hanging on, refusing to give up. I also know of other photographers, who like myself, didn’t find the struggle worth it, and have moved on. It’s not easy to give up on a dream, and it’s harder still to move on to a new career if you don’t have the skills, confidence, or necessary experience. This is, of course, not limited to photography. It may not have been anyone’s dream to work on an automotive assembly line (or it may have been…who am I to say?), but for many it’s been a difficult transition to move from a $40/hr (or more) job, with great benefits, to one that requires potentially more training, and at the same time pays less, and has, often times, much worse benefits. In my case I wasn’t giving up much in either the pay column, or the in the traditional benefits column. What I had to give up was much more valuable to me: freedom and creativity. I mourn the loss, but I’m not bitter or angry. It is what it is.

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You can find plenty of bitterness and resentment (just go to a job site forum)  relating to job obsolescence, but there is no stopping change. It’s not difficult to find anger expressed these days relating to a fear of possible, or pending, obsolescence. I visited photography business forums for years, and constantly saw, and experienced, the anger of more established (older) photographers who, at one point in their career were making really good money. Usually the anger came out during discussions regarding pricing of photographic services. Newer photographers often find themselves in a desperate situation. They often have little to no experience, no work, and if they went to art school, huge amounts of debt. The older photographers would admonish the desperate young photographers for charging too little, thereby dragging pay down for the entire industry. Due to lowered barriers to entry, and various romantic notions of photographers, there was an ever increasing number of photographers looking for work. skyline_pano_4.jpg Meanwhile, the industries that pay photographers, namely advertising, editorial (magazines and newspapers), and publishing, were in increasingly worse shape. The decline of manufacturing in this country not only put a lot of laborers out on the street, but ad execs, editors, and of course, photographers as well. I was fortunate enough to recognize the writing on the wall early. Even before I made a living from photography, I saw the annual revenues of the commercial studio I managed decline dramatically each year beginning in the late 90’s. I managed to make it because I cut overhead to a bare minimum. I owned almost no equipment (except cameras and computers), had no studio (other than my basement), and figured out this internet thing pretty early. I got a site online early, bought some Google AdWords, and soon after had full time work. Of course, eventually everyone else figured it out too. And to make matters worse, as the really good paying gigs dried up, everyone began to compete for the few remaining jobs. It didn’t take long before I was competing against huge studios for small time work.

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I once heard that in business, if you believe the industry in which you operate is growing, you should reinvest profits in your business, and if you believe the industry is contracting you should bank all profits. I did the latter almost from the beginning. I also decided that I needed more transportable, and more importantly, more in demand skills. It’s not that you can’t take photography with you, but photography is a business that takes time to build up. Photography, for all but the really big names, is regional, and building a business in a new location takes time. Since the web seemed to be a growth industry, and I enjoyed design, I decided web design would be my next career. Because of an extremely low overhead, savings, and the new skills I was learning, I felt confident that I would be fine. My new career ended up not being web design, but rather web development in general, and user interface engineering specifically. 09242007_0130.jpg It took years. It wasn’t easy. And it often left me with little to no free time. But it’s been worth it. And of course I still do photography, only now I only do what I want. In fact, I’m probably much more well known for my personal projects than I ever was for my commercial work. It’s much more satisfying, though it doesn’t pay much of the bills anymore. Of course, if the industry ever turns around I’ll be ready. Though, who knows, maybe I’ll be on to something different by then.

The Big Three: A case study on the reluctance to change

09150204_09.jpgNot too long ago, I heard The End Of The Line For GM-Toyota Joint Venture on NPR. I had already heard about the closure of the plant, but knew very little (actually, nothing) about the history of the plant and what it represented for the American automotive industry. This paragraph pretty much sums up the whole piece:

“In the mid-1980s, Toyota took over the Fremont plant, one of GM’s worst, a factory known for sex, drugs and defective vehicles. And as part of an historic joint venture, Toyota turned the plant into one of GM’s best, practically overnight.”

NPR reported on the history of the plant. At one point the assembly line output cars with engines in backwards, missing steering wheels or brakes, and cars with with front ends from other cars. Booze was common on the line, and nobody dared stop the line for anything. Eventually Toyota and GM partnered up to run the plant. But first they sent employees to Japan to learn Toyota’s way of doing things. Of course Toyota’s way was very different. It was pretty much the complete opposite of how GM had been run the plant. Upon reopening, the plant began producing some of the highest quality cars in America. So what did GM do next? Did they take what they had learned and apply it elsewhere? Ahh…no. In fact one of the NUMMI “Commandos” quit in frustration.

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A year later GM did try to apply what they had learned at NUMMI to other plants.  At a plant in Van Nuys nobody wanted to change.  I wasn’t shocked by the resistance to change from rank and file workers.  After all, the initial reaction by most people to criticism is defensiveness. Most do not want to be told they are doing something wrong, or even that they could be doing something better. I wasn’t even shocked to hear how one plant manager asked a NUMMI Cammando to leave the plant after a presentation on doing things the NUMMI way. Even after plants across the country began closing and GM began losing market share quickly, the resistance remained. What did shock me was the fact that upper management at GM allowed management at the plants to not change. “Who was in charge?”, one might be inclined to ask. According to the NPR story, the “plant managers were king.” I guess I shouldn’t have been surprised, as this is the kind of dysfunctional leadership I’d experienced for decades in the metro Detroit area, and to be truthful, in my corporate experience elsewhere. The Big Three were just bigger and perhaps more dysfunctional than most. And unfortunately they were this dysfunctional during a profound shift in the world economy. It’s bad enough when the average person refuses to pay attention to the writing on the wall, but downright idiotic and shortsighted when leadership ignores it.

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Unfortunately this seems to be a common theme in American corporate culture. I suppose I shouldn’t be shocked about any of this. The shareholders at public companies frequently reward pathetic leadership. There is rarely any incentive lead a company toward a long term course of profitability. Instead they give big bonuses for short term profitability. Any sports fan knows that teams go through periods of mediocracy as they build toward long term competitiveness, yet in the world of high paid corporate cronyism, no one seems to give any thought to a few years down the road.  In corporate culture almost any cut seems to be rewarded. Even cuts that will harm company for years to come seem to be rewarded. Seemingly, as long as a company beats the next quarterly projection the stock goes up. And if stock goes up, shareholders are happy. And if shareholders are happy, execs get big bonuses.

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Is it any wonder my confidence in our corporate leadership ranks right down near that of our political leadership?  Now that the Big Three have possibly hit rock bottom, do they have the leadership in place, and the will to make the necessary changes? It seems that perhaps the threat of extinction has shaken enough people, in at least two of the three, that perhaps things are headed in the right direction. Too little, too late for so many. Sad that the ship has to begin sinking before the will is there to fix  the problems.

Holidays in Detroit and the downside of home ownership

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The winter months in Michigan can be, and usually are, rather dreary. During our annual holiday visit to metro Detroit, along with the usual lack of sunshine, we had experienced the joy of pouring rain on Christmas day. Fun. Of course many can get used to such weather, and some will even claim to like it. For some reason many Michiganders complain all winter about snow.  Some even claim to prefer cold, damp weather to dry, cold weather. Many say, “well, at least it’s not snow!”, whenever it rains. Because soaking wet and cold is apparently so much better. Besides, snow is the only thing that covers up the brown grass, bushes, trees, and all of the mud that we get to experience a good four, or more, months of the year. But, if someone claims to like it, who am I to judge. Whatever makes you happy…

On the plus side, we enjoyed the usual things during our visit to metro Detroit. We spent time with family for holiday brunches, lunches, and dinners, as well as at a memorial for my grandmother who had recently passed away at the age of 98. We ate and drank at some of our favorite metro area restaurants and bars, and caught up with Friends. We also got to enjoy a Red Wing’s game, as we watched Detroit beat the Colorado Avalanche.

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In the weeks leading up to our trip back to Detroit, we scheduled some drywall work to be done prior to our arrival. Over the eight years we’ve owned the home we’ve gutted the bathroom and kitchen. And by gutting, I mean we ripped out absolutely everything. In the bathroom we had to stand on floor joists as we laid new sub-flooring. In the kitchen we spent days ripping out old underlayment covered with nasty, worn out linoleum made to look like bricks. In both rooms everything went. The bathroom got a new cast iron tub, all new plumbing, ceramic floors and tub surround, as well as new insulation and drywall. The kitchen received all new cabinets, appliances (other than the fridge), and new oak, hardwood flooring. We also replaced insulation and drywall in two bedrooms, refinished all of the old, existing hardwood floors, as well as the new kitchen flooring, after ripping out disgusting, rental house carpeting. We patched holes in the foundation leftover from the cement forms. All of this was done by us, with the rare helping hand of a professional plumber or electrician. The only thing we didn’t play a major role in installing was the new furnace and air conditioners.

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We did as much as possible ourselves because we didn’t want to take out a loan on our house. We didn’t believe that borrowing to fix up our rather modest ranch house was a smart move. Instead invested a lot of sweet equity, saved money in envelopes, and always paid all bills in full. The only exception was the twelve months, same as cash, credit card Ikea gave us. We did take advantage of a free year long loan. Of course we paid this off in full before the deadline. We had also purchased a house we could afford, even on one income should one of us lose our jobs. And this happened shortly after buying the house. My wife’s company was purchased by good ole’ Barry Diller, and was promptly laid off. I quit my job a few years later to try my hand at self-employment. We never had to stretch to afford the house. We were never house poor. We even paid extra on the measly $666 dollar mortgage each month in a effort to pay down the principal.

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While we did see hardship coming to the metro Detroit area, we didn’t have the renovations finished soon enough to sell when we new we should. And while we saw the writing on the wall, we certainly didn’t know it would get as bad as it did. Upon arriving home we worked hard on finishing the basement on our house, not really knowing the extent of the value lost in the previous six months. Sure we new it had lost value, but all told, it’s probably down 40% or more from it’s peak value. We were told by our real estate agent that we really needed to finish the basement, and so we were intent on it…until we realized what kind of shape we were in. Instead of throwing good money after bad, we began to think in terms of damage control. We may as well burn a pile of money on the driveway. Or perhaps put a pile of money on the driveway. At least that would generate some interest in the place.

Now I constantly read articles like:

Underwater Mortgages Hit 11.3 Million

Strategic Defaults

Debtor’s Dilemma: Pay the Mortgage or Walk Away

Strategic Non-Foreclosure Becomes Official Policy

Freddie Mac: “Potential Large Wave of Foreclosures”

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After learning that we were hopelessly under water, we dropped all tools and stopped work on the house. Strategic default, the new term for walking away even though you’re currently good on your payments, became a very appealing thought. We moved for work, and we can’t, and don’t want to, go back. Two years of paying the mortgage on even a cheap house (that we don’t live in) is a huge amount of money that is not saved for retirement (not that I ever expect to actually retire), or for the unthinkable potential need for a future debilitating illness, or for other future needs.  The money becomes locked away, in a sense, prevented from being used for more useful in the economy. Even though we bought way less than we could afford, never borrowed against it, and did all renovations ourselves, we are still faced with the possibility of owing $30,000, if we can even sell the house. This is perfectly plausible scenario even though we did everything “right”. And now the mortgage and banking industry wants me to think of my legal obligation as a moral obligation. The legal documents say it all. They state in the terms what we owe, what the collateral is, and what happens if we fail to pay. There’s no mention of heaven or hell, good or bad, right or wrong…only terms of agreement, and potential penalties should one side fail to uphold their end of the bargain.

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I don’t like the idea of walking away, and we’re doing what we can to avoid it. But at some point we need to, once again start saving the large sums of money needed for our future. The longer we hold off, the worse it becomes. Even the moral compass in my head is weak compared with pending problems of a future with too little saved. Which potential scenario is worse? The one were we walk away from a legal obligation with a bank? Or the moral obligation were we fail to take care of ourselves and our families, without relying on public handouts?

Who’s left Michigan? And who’s left in Michigan?

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The other night I had a conversation with someone still living in metro Detroit. We talked about the national economy, and local Detroit metro economy as well. Now that I’ve been, for the most part, working outside of Michigan for the last couple of years, I see things from a slightly different perspective. Those who live in Michigan are, I imagine, feeling a greater weight,  than those of us who live in areas with a better economic outlook. While I’m not viewing the world through rose colored glasses, I certainly see a better national future than did the person on the other end of the line. I believe many regions in this country are well positioned for the future. Unfortunately, where we did agree was in the belief that Michigan, and metro Detroit, is not one of those regions.

For many years now, I’ve been stressing that as bad as things were, I believed they would get much worse for the area. Upon moving back to metro Detroit from Portland, Oregon, I suffered from a pretty big dose of culture shock. The people, the place, and mostly the attitude was completely different. In Portland people, with good educations, often with plenty of experience as well, moved to the area just to be there. They wanted to be around other young, educated, and often creative, individuals. They wanted to be around the kinds of people that start businesses like Resource Revival, Portland Design Works, and River City Bicycles. They wanted to have the chance to work for companies like Nike, Keen, Adidas, Weiden + Kennedy, and Second Story Interactive. I’ve never been able to say the same about Detroit. Though I’m sure there are some who have made a decision to live in Detroit for reasons other than family or a job, I’ve never met any.

Growing up in metro Detroit almost everyone I knew with a lot of money worked in the one industry. If they didn’t work for the Big Three, they had a family business, and it was most likely an automotive supplier, or somehow serviced the auto industry. The pay was often ridiculously high, and the bar was often too low. The pay didn’t necessarily go to the best, but to most well connected. Of course this wasn’t, and isn’t, strictly a problem in one industry, but as the auto industry grew, the problem grew too. At one point in the late 80’s and early 90’s the zip-code I lived in was the wealthiest in the country. This occurred even as the auto industry was in decline. Already almost everyone I knew, around my age, wanted to “escape” from Michigan, and the bloated, insular, and dysfunctional industry that dominated the area. Unfortunately the high pay, and security of the jobs in the industry sucked many back to the state after college, but the foundation for a healthy, innovative, and diversified economy was long gone. As soon as the over heated economy, built on debt, began to cool, the exodus from Michigan moved into overdrive.

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Who has left? Anyone with a good education, or skills that were in demand nationwide, such as software engineers, chemical engineers, and many other high tech and creative workers. They were the ones who could go almost anywhere. If you had a good education, and new you could get a good job anywhere, would you stay in a region whose main city leads the nation in crime rates, unemployment and poverty, suffers from a low level of education, has few cultural and recreational opportunities, bad traffic with no alternatives, and a sprawling and poorly designed metro area? Of course the suburbs don’t suffer as the city does from these afflictions, but let’s be honest, young, educated, creative types like cities. No matter what your middle aged, suburb loving, curmudgeon beliefs are, the younger generation likes what cities offer. Even if they don’t live in the city, they want to be near a vibrant one. They want culture, jobs, variety, choices in transportation, and vitality.

So who is left? Is it, as this article claims, the strongest that remain? Maybe those who stayed are stronger. Who knows, though it looks like it is the educated who are leaving, and it appears that the poorer, and less educated would like to leave, but find it much more difficult. But, regardless, metro Detroit needs much more than strength. It needs leadership, creativity, innovation, and vision. Detroit needs a new direction. There are a few good signs, as the article points out, but why did it take so long for anyone to take action? What was going on the last 20 years or so? Nothing as far as I could see. I was there. It wasn’t necessarily that no one cared, but that no one cared to see what was coming. Sure there were the few who were planning for the future, but for the most part it seemed as if Michigan was enjoying a party most believed would never end. Now the party is over, and many are pointing fingers. It’s the liberals fault. It’s bad tax policy. Blah, blah, blah… The ship is underwater. Time to stop the blame game.

It’s not that I believe Detroit has no future, it’s just that I think that it’s going to take a long time to attract the people that are needed to turn things around. Maybe a turn around isn’t even possible. Do we even want to go back? What we really need is to move forward. Michigan has waited far to long to face what was the future, and is now the present, but better late than never I guess. I certainly don’t have the answers, but I do know that unless Michigan can attract, and keep the types of people that are leaving, the state doesn’t have much of a future.

A lesson in free speech, blah, blah, something, something, and some photos of Detroit

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After a week of listening to crazy political, economic, and social theories, beliefs, and comments, I felt the need to vent. Unfortunately I wrote way too much, so I’ll only post a little bit at a time. I hope not to come off as preaching from a soap box, but rather presenting information that seems to be too often misunderstood.

Having a discussion about politics is similar to a discussion about religion. It takes the right combination of individuals to have a civil discussion (as evidenced by our recent national political screaming matches…err, I mean discussions). Unfortunately, bringing reason and facts to a political discussion is about as welcome and useful as it is in most religious ones. That is to say, facts and reasoned arguments are not very welcome at all. It’s too bad, as a debate of political, economic, and social theory is a good thing. Yet it seems to be almost impossible to have. If you are going to disagree, at least get your facts and statistics straight. As Mark Twain said, “Facts, or what a man believes to be facts, are always delightful - Get your facts first, and then you can distort ‘em as much as you please.” That way if you want to make stuff up, at least you’ll be less likely to come off as part of the lunatic fringe.

The first topic in which it was obvious many of the participants of the “discussions” didn’t have much of an understanding is:

Free speech, and the protection of it under the First Amendment of the Constitution

From the Constitution: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

Note, you do not have a protection from corporations, private businesses, or individuals. Therefore if someone in the press criticizes what you have said, or suggests you shouldn’t have said it, your right to free speech has not been violated. If an online forum deletes your idiotic (or thoughtful) comment, your right to free speech has not been violated. If someone tells you to “shut up,” your right to free speech has not been violated. Furthermore, there is a whole host of instances in which, the amendment has been interpreted to allow for the restriction of the individuals right to free speech by the federal government (judicial activism has a long history, knows no political boundaries). Of course this is a very limited presentation on your first amendment protections. It is only meant to explain your right, or lack thereof, as it pertains to the, apparently, very common misconception that you are granted the right to free speech in every domain.

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And here’s the blah, blah, something, something part:

There’s been a claim that the the federal government can’t do anything right (no pun intended). That they’ll obviously bungle anything they do, other than, depending on your point of view, highways, defense, social security, sewers, water, and electricity. In direct opposition of the first statement is a second one. The second statement often used in conjunction with the first says, that the federal government shouldn’t be involved in health care because they’ll drive the private businesses out of business due to a lower operating cost. Well, which is it? It can’t be both. Is the government more efficient…or less?

Don Tapscott provides a good argument in favor of my long held desire to clean house at the Big Three, in a “Crisis of leadership.”

At least we’re not Texas. Does anyone other than a Texan like Texas?

This poor woman decides to leave Detroit after 60 years, and get berated by idiots in the comments. What the hell? Can’t people can’t just say, “good luck.” Or how about, don’t say anything? Really, we’d all appreciate it.

Detroit’s Studebaker Plant

Detroit’s Studebaker automotive plant was built in 1906, and was originally for the Wayne Automobile Company. At one point, after Wayne Automobile Company merged with Everitt, Metzger and Flanders, it was the worlds second largest producer of automobiles. Studebaker acquired Everitt, Metzger and Flanders, and the plant in 1910, and Chrysler took over in 1928 after Studebaker moved to South Bend, Indiana.

Eventually a portion of the plant was abandoned while the eastern end was used for the Piquette Market. The abandoned portion caught fire on June 20, 2005, and eventually spread through out the structure, becoming a five alarm fire. The entire building was destroyed.

Too little, too late?

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U.S. automakers agree to new fuel efficiency standards. U.S. automakers cut costs. U.S. automakers make fuel efficient vehicles. That’s great. The problem isn’t necessarily with what Big Three execs agree to now, or what they say now, it’s what has happened over the last 35, or so, years. GM, and the other American automobile manufacturers have a really bad legacy. Any other companies that were as poorly managed would be out of business. Even with a massive taxpayer bailout, GM is still filing for bankruptcy. That alone speaks volumes.

While Toyota may be hurting, it doesn’t appear they will be filing for bankruptcy. And, Honda, while posting some recent losses appears to be well positioned for the future. It’s as if the American automotive industry is given a pass for failing to plan successfully for the future. And worse yet, for failures which are often admitted, even by Wagoner himself.

It’s sad. I am still paying on a house in metro Detroit, as are others I’m sure, even while having to leave the state to make a living. We are, in effect, paying the price for the short sightedness of our political and corporate leaders. The Big Three execs seem downright excited about new fuel efficiency standards, and electric vehicles. Too bad they didn’t seem remotely interested even ten years ago, and in fact banded together to fight new CAFE standards multiple times.

The argument, by Big Three defenders, is always, “they sold what the public wanted.” Of course the truth is usually not that simple, nor is the past performance proof of future results. Just because people bought Ford Excursions when gas was $1.25/gallon, doesn’t mean they’ll buy them when gas is $3/gallon. But if we are to believe upper management at the Big Three, no one could have seen this coming. Plenty of people did, and smaller companies with less funding, fewer employees, and much less experience in the automotive industry are now leading the way in electric vehicles. While GM has long since canceled the EV1 program, companies such as Tesla, Fisker, and Detroit Electric are now either already selling, or are close to selling everything from high performance sports cars to affordable family sedans.

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You’ll often hear, that it wasn’t short sightedness. That it must be the unions fault, or perhaps it’s just a bad economy. The Big Three have been losing market share and money for much longer than this current economic downturn. Not that I’m not going to defend the UAW. I believe the UAW leadership was self-serving and short sighted, just like management, and our political leaders. I also believe that while much of the union rank and file knew the good times wouldn’t last, most just decided to get it while the getting was good. That’s a pretty short sighted game plan as well. It seems no one could see beyond the end of their nose.

So now, with Chrysler and GM going through bankruptcy, the Big Three are suddenly excited about fuel efficiency standards, controlling costs, and alternative fuel vehicles. Is it too little, too late? And opinions range from Detroit’s too excited about green cars, to the Big Three’s not embracing green cars enough, to Rick Wagoner is a scapegoat, to Rick Wagoner is to blame, to GM has too many brands, to GM should hold to brands, to Obama is doing too much, to Obama is doing too little. Nobody knows exactly what will work, or even if anything will work. Writers from many media outlets including writers from both the Washington Post and Business Week are at odds as to the reasons for the fall of the Big Three, and how to save it.

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The only thing that seems certain is that whatever the fix is, it’s at least 20 years too late. Already the stumbles of the Big Three are opening the doors even wider for foreign manufacturers. I suppose it’s human nature to wait until the roof is collapsing to attempt to fix it, but with all of the money paid to almost everyone involved, you’d hope for a better outcome. When CEOs are paid millions, you expect them to fix inefficiencies, broken business models, and foresee possible future challenges. Gas prices may not stay at $1.25/gallon, consumers may not always want really large SUVs, and the economy may not always grow at record rates. It seems that the claims that no one could see these things coming are a bit disingenuous. It seems more likely that our leaders were simply blind or ignorant. Consumers didn’t always like SUVs. In fact Jeeps were at one point just for that off road enthusiast down the street. Pickup trucks were for construction workers and hunters. Gasoline is a limited resource. We have experienced rising fuel prices several times before. Consumers couldn’t really afford $50k automobiles, but an economy that seemed good led consumers to leverage themselves to buy Hummers and Escalades (among other things). Of course the economy would slow down. It had to. Anyone who couldn’t see that, simply didn’t want to.

The truth hurts…

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I wrote this a while ago, so many of the links go to older (well, weeks old anyway) articles, but this one article made me think about actually publishing this post. A quote from the 25 year old report called “Path to Prosperity” that caught my attention: “‘We said we had to either get smart, get out’ of manufacturing ‘or get poor,’ Ross said. ‘We got poor.’” I was considering a new tone at The Motor(less) City, but what the hell; I guess it’ll have to wait.

Sometimes I get angry comments and emails about the content I put on my blog. Often times the comments are very defensive about the Metro Detroit area, and hence angry at me. In the past my rantings were really just the online equivalent of screaming into the wind. Now that some people actually read the blog, I’m confronted with the fact that not only do people not agree with me, but some are really mad at me. Not sure if I’m really comfortable with this, but I guess it’s a little late now. Yeah, the truth hurts.

Speaking of the truth hurting, it seems that people from the area, even the defensive ones are going to have to deal with some uncomfortable facts about the state, and city…and the region. Everyone (I hope) knows that Michigan’s unemployment rate is 12.6%, and Detroit’s is 22.8% (and future estimates even worse), but of course that’s not surprising. I think many in the area want to pretend that Metro Detroit is better than it is, and in fact often point out only moderately unique aspects of the area as proof of greatness. “We’re a great sports town”, people often say, or, “we’ve got great architecture.” There are two really good professional sports teams in Metro Detroit (and two pretty bad ones), and there are some very nice buildings in Detroit (the Penobscot, the Guardian, etc), but so what. What major city doesn’t have a couple of good sports teams, and some good architecture? And, really, neither of those things makes the area a good place to live.

I think this is becoming exceedingly obvious as people flee the state at a record pace. As the article clearly points out, the “young and college-educated” demographic that is leaving, is exactly the demographic that is needed to save Metro Detroit. As the population becomes older, the costs that will burden those that actually work will go up. The fight will continue over taxation, investment, and education, but it’ll all be for naught if we can’t figure out a way to attract people who create jobs instead of just those who need jobs. We aren’t going to be able to convince enough companies to come to the area to make up for all of the manufacturing jobs that have been lost, but we can make the environment more inviting to those who are the job creators.

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Some other painful truths:

The Big Three are mostly to blame for their problems. It is not just a symptom of the recent economic crisis, that no one could have seen coming. And the people in charge have not been the right ones either.

The problems in Detroit are very complex and deep rooted. Our past still haunts us. Lowering taxes isn’t a magic bullet.

The entire state is hurting, not just Metro Detroit. A quote from the article: “Michigan’s dependence on low-skill, high-paying manufacturing jobs is driving the state to the poorhouse, a new study shows.” I was a “bad” person for saying this recently.

It’s still one of the most dangerous cities in the country.

The citizens of Detroit constantly elect crooks. This one is not often disagreed with.

Good news? Well, there may be. It depends on your political persuasion.

There are some young entrepreneurial types that are doing their part to keep their own demographic from leaving the state.

The large tax incentives given to film productions in the state appear to be attracting larger and larger productions, bringing some jobs with them.

Immigrants could be the area’s future if we are open and inviting.

Stimulus dollars may help with high speed transit between Detroit and Chicago.

The Abandoned House of the week, and the remaking of Detroit

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I saw the following in a Richard Florida article in the Atlantic Monthly, titled How The Crash Will Reshape America: “The great urbanist Jane Jacobs was among the first to identify cities’ diverse economic and social structures as the true engines of growth. Although the specialization identified by Adam Smith creates powerful efficiency gains, Jacobs argued that the jostling of many different professions and different types of people, all in a dense environment, is an essential spur to innovation—to the creation of things that are truly new. And innovation, in the long run, is what keeps cities vital and relevant.”

My experience has certainly led me to believe that this is true. I recently read this article about “job sprawl”, which is the condition that exists in Metro Detroit, where most of the jobs are far away from the city core. I once read an article in the Oakland Business Review, about a company located in Oxford, who was unable to find a qualified software engineer. My first thought was, “no shit?” If you are located over 40 miles from the nearest large city, you should probably expect it to be hard to fill technical positions that require a lot of training, and/or education. It looked like a good fit for me, but living in Berkley at the time it was still 30 miles away, and probably an hour or more drive in rush hour traffic. When living in Washington, D.C., I was bombarded with calls and emails from recruiters and head hunters, trying to fill web developer positions in the D.C. area. If the job was not located on the Metro line, or at least within walking distance of the line, I simply said I wasn’t interested.

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If you employ low skilled workers you can locate almost anywhere, but if you need highly skilled, and/or educated, you’re best bet is to be near an area with a relatively high population density. It’s fairly easy to find low skilled workers. Not so when it comes to skilled labor. I’ve had recruiters from around the country contact me because of my specific skill set. They are often having trouble filling these positions. I’ve now worked for multiple companies in densely populated areas that had trouble filling positions. In fact I am currently working for a company that has been trying to fill positions since before I began work there almost a year ago. They are located in an urban center where there is an active high tech community. If they were located 40+ miles from the city, their chances of filling the positions would be slim to none. It’s not that tech workers don’t like the country side; it’s just that in an urban setting you have a much higher concentration of such workers. Your chances of finding the person to fill your high tech role far from the city are not as likely. Someone is going to have a long drive…if they’re willing to do it at all.

Will this change in Detroit? I don’t know. I’m not all that optimistic about Metro Detroit’s outlook. Areas like Royal Oak, and Ann Arbor at least have, arguably, resources, infrastructure and population density to decent tech centers. Currently, Ann Arbor is the area most resembling a creative center, and has the advantage of one of the best public universities in the country. Detroit has the New Center Area, and the Central Business District, but both areas are fairly far from the areas with the highest concentrations of creative workers such as Ferndale, Royal Oak, and Ann Arbor. Detroit has a long way to go to even approach the level of safety, livability, and urban conveniences that the previously mentioned suburban areas already have. Detroit’s advantage at this point are the incredibly low costs of land and buildings. The fact that a start up could acquire large amounts of space and land for very little money should a selling point. The fact that the area is losing the very residents a start up often needs, along with a reputation of as one of the most dangerous cities in the country makes the few pluses at lot less valuable. Detroit will need both the grass roots enthusiasm it’s been seeing, along with large amounts of public, and private funding to even have a chance of becoming a reasonably desirable place to live or do business.