What Will Ford Buyouts Mean for Workers?

FARAI CHIDEYA, host:

As Ford struggles to reinvent itself, former employees are trying to rebuild their lives. For a century the auto industry helped workers reach the middle-class. But outsourcing and mechanization are leaving these workers without many options.

For more on what these buyouts could mean, we're joined by Bill Spriggs, professor and chair of economics at Howard University. He's at NPR's headquarters in Washington, D.C. Welcome.

Professor BILL SPRIGGS (Professor of Economics, Howard University): Thanks for having me.

CHIDEYA: So can you just paint us a picture? We've seen people who were lower skilled and sometimes lower income leaping into the middle class with these really solid auto jobs. How important is the auto industry to America's economy and the middle class?

Professor SPRIGGS: Well, autoworkers are the highest paid workers in the United States, second only to those who do petrochemicals. So it's a solid part of the middle class. Often we think of them as less skilled workers, but that's really a misnomer. A modern automobile manufacturing plant requires very highly skilled workers. And so that whole industry has been under a transformation as it has increased productivity greatly.

For African-Americans back at the peak of the auto industry in the late 1970s, about 2.1 percent of American black workers were in the automobile industry. The 1980 recession had a dramatic impact for African-Americans in that industry and they dropped down to about their present share, which is about 1.3 percent of African-American workers. Most are in parts manufacturing. That's where most workers are.

Ford had made a shift away from doing a lot of parts and does final assembly. So the shakeout here isn't just going to be for Ford; but as Ford downsizes, it means a shakeout for those who are in the parts part of the industry.

And then we have Delphi, which is a major parts maker that used to be affiliated with General Motors. They're going through a dramatic transformation as well. Almost 22 percent of America's automobile workers are in Michigan. So this is going to have a huge impact on the whole economy for Michigan and a huge impact in the U.S. as this industry downsizes in the face of overproduction of automobiles and automobile parts in the world.

CHIDEYA: You know, when you mentioned what percentage of workers are in Michigan, I can't help but thinking about Motown and all of the cultural, you know, signifiers that went with the growth of the auto industry. Do you think it's going to change America's culture, that U.S. automakers are struggling so much?

Prof. SPRIGGS: Oh I think it will because it is that history of that industry that catapulted a middle class movement in the United States. The UAW was very important in creating a middle class, and African-Americans eventually benefited from all of that. We continue to be overrepresented as autoworkers, relative to whites. Though when you look at manufacturing as a whole, blacks are underrepresented in manufacturing.

So this is the last sort of big stronghold among manufacturing workers for African-Americans. And in the case of Detroit, it's a city which, unlike most other American cities, relies heavily on income tax. It doesn't rely on property tax. So as the income of workers falls, so does the city's income, the city's tax revenue.

So this is going to create a big challenge for Detroit in trying to rebuild. It's doing a great job so far in trying to get back where it was. But this is going to create a bigger challenge for that city.

CHIDEYA: Very briefly, because we're almost out of time: What other resources can workers access? Federal resources, perhaps if they want to continue their education and move into a different field?

Prof. SPRIGGS: Well, Ford is offering buyouts that allow workers to either get their own education or provide scholarships for their families. And workers need to take full advantage of that in order to retool for other opportunities. The big problem will be the people at parts plants that supplied Ford, who aren't going to probably get these types of generous buyouts, who will be chased into lower wage work. And that's where the big challenge is going to be.

CHIDEYA: So are there any programs that they might look for?

Prof. SPRIGGS: Well, the state of Michigan is trying to come to grips with what it's going to have to do in order to retool a whole set of workers who aren't going to benefit from what either Ford or General Motors have offered in terms of buyouts.

And that's going to be the big challenge throughout the U.S. Michigan isn't the only state that has auto plants. Missouri is a key state, Indiana, Illinois. So these other states are going to have to step to the plate as well in retooling their workers.

CHIDEYA: Bill Spriggs, professor and chair of economics at Howard University, thank you so much.

Prof. SPRIGGS: Thank you.

CHIDEYA: Coming up, will sanctions against North Korea work? And will New Orleans' black colleges get their share of money to rebuild in the Big Easy? We'll discuss these topics and more on our Roundtable next.

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