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Detroit: Empire of Rust
The UAW’s stranglehold turned one of America’s most prosperous cities into a wasteland.


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And it’s not only the crumbling walls that menace the public. Predators are attracted to this habitat of helplessness, like lions to a Serengeti watering hole. Photographers and tourists (some come to chronicle the elaborate and dazzling graffiti, others are just curious) have been routinely and brutally beaten, found their cars stolen, and even been robbed at gunpoint while exploring one of America’s most notorious modern ruins. One victim who was jumped while admiring this uncurated gallery in 2012 said, “I am lucky to be here and haven’t stopped thinking about what could have happened.”

And then there is the refuse. The plant looks like trash, so citizens of Detroit treat it like trash, routinely using the grounds as a convenient landfill. Suffice to say, the results — used mattresses, burnt-out cars, discarded food and medicines — comprise a real and present danger to public health.

FORECLOSING THE FUTURE
After allowing the vast complex to stand rotting in its midst for half a century, in May 2013 the county finally took possession of the rubble. It will be put on auction in September; the county is asking for an opening bid of $975,000, the sum total of back property taxes owed. In other words, the city puts no value on the land itself — the taxman just wants his due.

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And no wonder. The city has been for decades in a fiscal, demographic, and social death spiral. Thanks in large part to pension obligations driven by its unionized public workforce, by 2013 the city was carrying billions in debt. Unfortunately, the tax base needed to fund these huge obligations has been eroding for decades — from 1950 to 2012, the population fell from 1.85 million to a mere 700,000.

By 2010, the decline was so marked that Mayor (and former NBA great) Dave Bing proposed the unthinkable — the bulldozing of nearly one-fourth of the city. As Business Insider reported at the time: “Faced with a $300 million budget deficit and a rapidly dwindling tax base, Detroit finds itself having to make some really hard choices. . . . The true unemployment rate for those still living in Detroit is estimated to be somewhere around 45 to 50 percent, and poverty and desperation have become entrenched everywhere. In many areas of the city, only one or two houses remain occupied on an entire city block. . . . And yes, it is true that there are actually some houses in Detroit that you can buy for just one dollar. According to one recent estimate, Detroit has 33,500 empty houses and 91,000 vacant residential lots.”

The mayor claimed the city had no choice but to let its abandoned properties go. “There is just too much land and too many expenses for us to continue to manage the city as we have in the past,” he said. “If we don’t [bulldoze], this whole city is going to go down.” (The mayor’s attitude was eerily reminiscent of the famous alleged quotation from an unnamed U.S. officer in the village of Ben Tre during the Vietnam War, who claimed American forces had to “destroy the town to save it.”)

Not coincidentally, the long and torturous decades of Detroit’s decline coincided with the entrenchment of UAW power. A 2008 report by James Sherk of the Heritage Foundation found that the average UAW worker at the Big Three earned $75 an hour, including wages and benefits, “$25 to $30 an hour more than American workers at [non-unionized] Japanese auto plants.” Union contracts also allowed “surplus workers” — in other words, workers who were no longer needed — to collect nearly full salary while they remained idle.

In the light of this Mad Hatter math, the 2009 bankruptcy of General Motors was all but inevitable.

EATEN ALIVE FROM BOTH ENDS
Can the UAW really be blamed for the sorry fate of Packard — and Detroit?

Yes, to a large extent. It’s not certain that Packard would have survived had the union not been such a financial and logistical burden. But there is no question that the UAW made it more, not less, difficult for Packard to weather the Sturm und Drang of the business cycle.

In the Eighties and Nineties, when foreign-owned companies like Toyota were entering the U.S. market in large numbers, UAW contracts bound and gagged the Big Three with costs and obligations that fatally restricted their ability to innovate and compete, just as the UAW had done to Packard against the Big Three in the Fifties.

This absence of flexibility has proven disastrous for the workers that the UAW claims to champion: As we wrote for Forbes, since the turn of the 21st century, “the Detroit-based auto companies have shed 200,000 jobs — three-fifths of [their] hourly workforce.”

And the dying industry has dragged its home city into the grave along with it. On Thursday, July 18, Detroit — suffocating under more than $18 billion in debt — filed for Chapter 9 bankruptcy protection, making it the largest city in U.S. history to go bust. The Motor City had at last run out of gas.

True, the causes of Detroit’s decline have been many and varied. Corruption and bad management played a role, for sure. But between the UAW’s crippling its prime and vital industry, and its unionized public-sector workforce demanding larger and larger shares of the public purse, the Motor City has been eaten alive from both ends by . . . what? How to characterize this thing that has consumed one of our great cities?

After World War II, the Japanese people struggled to come to terms with the fact that two of their cities had been erased from the map. Japanese filmmakers channeled the nightmares of all Nippon with their films featuring giant monsters wakened by nuclear explosions, monsters like Godzilla, that then proceeded to lay waste to their cities.

At the time when Japan lay in ruins and its people were imagining monsters to explain their supine and smoldering existence, Detroit was a shining and bursting example of America’s industrial might.

Now Detroit lies broke and broken. But no imaginary monsters or foreign bombs are needed to explain its demise. Only three letters are needed:

UAW.

— Matt Patterson is editor-in-chief for WorkplaceChoice.org. Julia Tavlas is a contributor for WorkplaceChoice.org.



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