Today I read in the newspaper about the new Honda plant soon to be built in Indiana.  Contrasted with that was a bold headline talking about buyouts overwhelming Ford.  While one letter to the editor suggested taxing those who don't buy UAW-made cars, the reality of life is that the Big 3 are experiencing what others before them have and have not lived to tell about.

In my former life, I was an accountant for Top 200 companies, some of which were union steelworker companies.  The steelworker companies are no longer in business.  The non-union companies remain.  For all of the union reps' rants about greedy corporations and attempts at disingenuous class warfare, I've worked for companies which have made as little as 6% net profit after paying 80-90 cents on the dollar for labor and taxes.  Are there bad actors in corporate America?  Certainly.  Corporations are nothing more than other individuals who, rather than getting a regular paycheck, take on increased risk and investment in the hope of increased reward.

I grew up many moons ago in northeastern Pennsylvania.  Back then and even up until the 1980's, the apparel business was a very large union which kept us in shirts, blouses, swimsuits, and wind breakers.  The apparel industry had been in the area for generations.  At first, daughters followed mothers into the shops.  Over time, money from these jobs sent kids to college and on to the learned professions.  When the companies could no longer afford the increasing demands of the unions, one by one, they went out of business.  Today, few remain in the area.  Ingersoll Rand, another regional manufacturer, met a similar fate.  Their facility in Phillipsburg, NJ, at one time employed 13,500 individuals.  At last count that number now hovers, pitifully around 1200.  Mack Trucks world headquarters in Allentown is no longer there.  Bethlehem Steel in Bethlehem, PA had 30,000 workers at one time, and now they, too, are gone. 

In the interest of full disclosure, I should tell you that everyone in my family, every friend of my family had a union job.  As a matter of fact, both my aunt and uncle were shop stewards in various companies they eventually put out of business.

After leaving the world of accounting, I forged successful businesses in real estate and investments in New York and Pennsylvania, being recognized for being in the top 1% of realtors in the state.  After semi-retiring at 55, I bought a home on the Finger Lakes to get out of the rat race and do some fishing.  Despite my intent to enjoy a quiet retirement, I ended up picking up a few hours at a new local Home Depot to see my daughter through law school.  Talking with the young people in the break room at the store, I listened to their stories of being laid off from Corning Glass.  They had associates degrees from the local community college and had been making approx $20/hr at Corning.  Now they were making $12.50 at Home Depot plus benefits.  It might come as a surprise to some that they actually were glad to have found work at the store and were happy knowing that there they had a better path to advancement due to the high rate of growth. 

Corning Glass was unionized and very generous to their employees.  Many of the long-time factory workers were millionaires on paper through the stocks and stock options they had received over the years.  I heard from many employees that when Corning stock plummeted and they no longer were millionaires, they sold their Florida homes and had to winter over in New York.  This goes to show that unions cannot protect employees from everything--and especially not from a powerful and volatile marketplace.

Back in the 80's, I knew housewives with no college education who were making $50-60K per year selling real estate.  They did not have to be geniuses, but had to be able to work hard on behalf of their clients and call on their God-given abilities.  To get my New York sales license I took a 15-20 minute test.  Not nuclear science.  Point is, you don't have to be overly educated to make money in this country.  Governments just have to give entrepreneurs the right reasons to come to and invest in their state.  What I love most about entrepreneurs is that they are not reliant on any person or company, they do not expect to be handed a livelihood, they just need government to get out of their way and let them achieve.  I know individuals who have 4 year educations who are making good salaries at McDonald's.  You might laugh, but they still have their jobs and they are contributing to our tax base.  They have developed high level management skills in real world settings and are confident enough to be judged on their achievement. 

In Pennsylvania, the response to the changing economy was well thought out and acted upon swiftly with miles of industrial parks and business parks laid out around major thoroughfares.  They brought in clean industry to fill these places before the final crash came.  Through acceptance, vision, proper government investment of taxpayers' money, and a public weariness of the over-reliance on manufacturing, Pennsylvanians avoided the hardships Michigan is facing today.  However, it required people to challenge the mindset that their grandfather's job would one day be their own.  Personally, my father and both grandfathers were engineers on the railroad.  Even my father, with only a 3rd grade education, saw the demise of the railroad coming.  

Fortunately, Pennsylvania saw the inevitable decline of the unions coming back in the 70's.  Unfortunately, Michigan evidently did not, or chose not to.  The facts were there.  And that's what we're talking about tomorrow.