Unions Destroy a Company

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From S. Murf, London, UK:

I grew up in Milwaukee in the 70s and 80s. I remember the massive decline in manufacturing, the layoffs, the company closings. Milwaukee went from a city that was justifiably a priority nuclear target for being the nation’s machine shop to one in continuous financial difficulty as the massive wealth generating companies and their high wage manufacturing jobs disappeared.

I remember being age seven, and helping my father, a full time Milwaukee firefighter and part time tavern operator, prepare over 100 take out/delivery fish fries and helping him deliver them to Masterlock on a Friday night for their dinner/lunch hours. From 7th grade through high school, I remember constant reports of major problems for the many companies located in the city. As an adult, repairing copiers, I frequently went into business office buildings that were the converted structures of old manufacturing buildings, warehouses, and such. They were well built, beautiful brick structures with many period features from their 1880—1930 construction periods. No one could afford to build buildings like them again, no one could afford to tear them down, so they wisely remodeled them as office structures which stand as obvious testimony to Milwaukee’s industrial past and service based present/future.

Unfortunately if you think of a major company that was around in the 70s or 80s, the chances are it is gone or severely downsized, and its well paid jobs with it, from just about any industry you can think of. They are too numerous to recount with any completeness, but here is a short list of names you will probably recognize.

Schlitz Brewing, Pabst Brewing, Harley Davidson, Johnson Controls, Allis-Chalmers, AMC Motors, Masterlock, Allen-Bradley, Rockwell, etc. With them the smaller service companies and machine shops also go. The nearby communities, Kenosha, Racine, etc., all manufacturing towns with their Chrysler plants, General Motors, Case Tractors, all go. Companies like GE that are still present shift their major manufacturing abroad more and more, leaving HQ and admin behind. Where manufacturing remains locally, all expansion occurs abroad and the places stagnate.

The railroads and links which were so important to industrial Milwaukee have all atrophied and are hardly what they were. My grandfather (and also my Godfather) were railroad men. “Fortunately” my grandfather was retired before the government takeover and federalization, but my godfather recounted that nightmare and the decline of a proud industry during frequent family gatherings.

Between unions, federal reserve inflation, taxes, and regulations, not to mention increasingly spendthrift government, Milwaukee (and many other communities) have had their economic hearts ripped out. It didn’t help that Milwaukee is a one party town (Democrat) and even had a socialist mayor! Remaining people and businesses face higher tax burdens and lowered services, plus growing crime from the welfare/criminal underclass.

This combination drives more businesses out. The middle class is gutted, and much of the remaining middle class are civil servants dependent on the tax rolls of the remaining businesses and property owners. One income families become two income families, each earning a fraction of the lost manufacturing wage, and so on. So often, the well paid jobs that remain are government sector jobs, and most of the economically ignorant populace doesn’t see the link between the loss of manufacturing on one hand and the veritable explosion in government agencies and jobs on the other. Milwaukee went from having a federal building (ONE), and a State Government building (ONE), and a city hall, which then became a Federal Courthouse that housed various government agencies (INS, FBI, Marshals, etc.) to having literally hundreds of government offices scattered throughout the area and suburbs as the agencies multiplied and the existing ones outgrew their offices. I know. Repairing copiers meant that I went anywhere copiers were, which meant places that generated loads of redundant paperwork, which is the definition of a government agency.

London is the same. It’s a city that is all about services but I have yet to see a manufacturing business. I am sure there are a few around, but they are well hidden and few and far between. I don’t think Milwaukee is going to become a world financial center any time soon as London has.

The destruction of manufacturing and family farms (the latter accomplished as much by regulation, subsidy, and inheritance taxes as anything) IS the destruction of the middle class. So many of the jobs that replace manufacturing are not adequate to replace the income of the jobs lost. I understand the value of service jobs, I largely am oriented that way in my career with R&D and design engineering. The reality is that there are only so many high wage, high value jobs in the service industries, and they are increasingly portable and no longer location dependent, so like me, people will offshore themselves, getting paid in third party non-tax jurisdictions (if they are smart). Increasingly countries like China and India will also pick up the jobs requiring intellectual skills as they develop the manufacturing proficiency. You know that.

I guess my real gripe is that the USA, as typified by Milwaukee (and Detroit, and Chicago, etc.), for all of its proud history, its emotional pull as my home town, appears to be in a terminal decline, one hastened by the Federal Government’s profligate deficit spending and military adventures. Though I am increasingly making my family’s future independent of the USA, or any nation, and we will probably make our “permanent” home in some low tax nation like Uruguay or Costa Rica (perhaps Andorra, etc.), it pains me to watch the American nation that was free and prosperous, with a large and happy middle class, fall into the pattern of third world nations as the foundations of that greatness erode.

All I can say is <sigh> and build a brighter future for my family, one without the nationalistic ties that no longer seem as emotionally or politically rewarding as they once were.

From (Name Withheld), Minneapolis, MN:

Good article…in Mpls., MN the Minneapolis Moline tractor factory met the same fate…the prime space is a shopping center…

In my late teens I worked one summer at the Ford Motor assembly plant in St. Paul, MN…now the St. Paul Ford Plant has been plowed under and fancy high rise apts will take the place of the Ford Plant along the Mississippi…are we living thru the slow death of America??

Teens nowadays have no well-paying factory jobs and the industrial worker is now a greeter at Wal*Mart…glad to be 73…and Bush is running what is left of the USA into the ground…the folks in the USA must really be asleep.

From R. Kremer, Terre Haute, IN:

Your reference to the UAW strike of 46 stirred up a few memories and thoughts that bear somewhat on a point or two you made.

I lived on 69th street less than a mile north of the main gate, so the plant was almost in my back yard. My father worked at AC during the strike when I was about 5. When I say “during” it’s in the literal sense. My pop was not “management” and elected to keep working so as the needs of his family could be met. My mom and grandmother were worried sick for his welfare as there was a lot of blood flowing at the main gate. I saw it firsthand many times while riding the trolley…scenes burned deeply into my memory. In time the company laid everyone off, and my dad worked elsewhere for the strike’s duration. After peace was declared…sort of…he went back to work and retired after about 37 years of service…as “management” at that point.

Like you, I had the opportunity to work at AC for the summer of 1959. I delight in having had that experience. Looking back now I understand that AC was a key (if not the key) component in what Isoroku Yamamoto described as America’s “awesome industrial strength.”

About 11 years ago I moved to Terre Haute, Indiana from Milwaukee to work for the railroad branch here. My father often spoke of the AC Terre Haute plant and what an unproductive disaster the whole initiative had been. They built a plant from scratch to build compressors for the USAF. Prior to the plant’s completion AC set up a temporary facility in town, brought in sophisticated machinery from the USAF and was going to start training locals for the work to be done at the completed plant. Surprise, surprise, the UAW stepped forward and said, “NOT.” More blood. This was all about 1952 according to newspaper clippings in the local library file. After peace was declared…sort of…everyone went to work…sort of. According to my father, the productivity in Terre Haute was so low that West Allis brass came here to address the issue with managers and/or the rank and file. They offered a straightforward deal: if productivity were to increase the plant would remain open. If no such increase was forthcoming the plant would be closed and moved to West Allis. Sometime in the early 60s it closed. And sure enough, although the entire plant wasn’t moved, one erecting shed from Terre Haute to this day stands on old AC property near 60th street in West Allis.

After reviewing those library clippings and giving the matter just a little thought, I came to the conclusion the UAW was trying to reassert itself in Terre Haute after taking such a nasty whipping in West Allis during the 46 strike. The unmitigated gall. There was a fellow by the name of Meyer, University of Wisconsin system, who wrote a book on the history of UAW Local 248 entitled Stalin Over Wisconsin. It’s an excellent…and pricey…read for anyone wanting to understand AC during the 30s and 40s. I bought a copy new in the mid 90s when it came out to the tune of almost 50 dollars. I’m glad I did because I go to it now and again to refresh some of those things I heard all my life from my pop.

About a year ago I finished up about 38 years with what was left of the old Milwaukee Road Railroad. I still live in Terre Haute, but spend a lot of time in Milwaukee with family and friends. At least once every 2 months I drive through what’s left of AC. Let’s see…there’s a K-Mart back there in one of the old plant buildings, a dollar store of some sort, a sub sandwich shop…I think you get the picture. There was an old rail car rusting away on a set of tracks toward the rear of the property, up until recently at least. On one of those tours with my dad (he left us about 2.5 years ago at 91) he mentioned that the company built the car to accommodate a load no railroad in the nation could supply a car for. That’s just one very small example of the approach the company seemed to take towards problem solving.

End note: American manufacturing accounted for 53% of GDP in 1965, according to this source. Today it’s 9%. Is this what the unions wanted? I wonder.

Robert Klassen [send him mail] retired from a forty-year career in critical-care respiratory therapy. He is the author of five books, including Atlantis: A Novel about Economic Government, and Economic Government, which describe a solution to the problem of political government. Here’s his web site.

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