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Can America Stay Competitive?

Posted by: Helen Walters on September 24, 2008

As many of my colleagues have mentioned, Intel chairman Craig Barrett visited BusinessWeek recently. His acidic tone and frustration and discontent with the state of America were palpable. I don’t want to go over old ground, and I recommend that you watch the video interview he filmed with Bruce, but his comment on the state of the American nation has been echoing in my head:

I don’t think we in the United States have chosen to compete yet. We’re still sitting on the sidelines basking in the glory of past years.

Detroit_3.jpgI spent last weekend in Detroit, where I took the pictures you see here. I’m still processing what I saw. First things first, it’s a beautiful city. Some of the architecture is truly amazing. But it’s eerily empty. And in many places, buildings aren’t merely boarded up; they’re simply deserted. Post-apocalyptic is the only way to describe it, even though I hate to sound so dramatic when this is still a living and working city.

Detroit_5.jpgYet it also has a 20th century feel, which I think is why Barrett's comment is still resonating. A tour to the Henry Ford museum to see the Rouge factory plant, which produces F150 trucks yet has been non-operational since June, merely emphasized that the automaker's glory days are over while it hasn't worked out its place in the here and now. Bill Ford pops up on a video on the bus that transports visitors to the plant to wax lyrically about the past and hopefully about the future, yet his words ring hollow. The plant is being retooled to build the 2009 F150. No mention of green; no mention of innovation; just more (or rather less) of the same. Even the plant's much-fabled "green roof" is, well, brown.

Detroit_8.jpgPeople of the city deserve better. One guy I spoke to graduated with an MBA earlier this year. He doesn't want to leave Detroit but can't find work -- anywhere. Indeed, a report released today by the Economic Policy Institute estimates that Michigan has the highest rate of unemployment in the nation, at 8.9% for August, with 26,100 manufacturing jobs lost since December 2007. Others spoke with a mixture of civic pride and confused hopelessness. They know the bleakness of their situation as they can't believe that they'll really be abandoned.

Detroit_2.jpgYet bailouts and a remit to carry on as before can't be the answer. Real change is necessary to stop the rot and bring back smart thinking and innovation to a city that needs to forge the appropriate, useful future that America so desperately needs. Once again, Barrett puts it more eloquently than I do:

It's not about sending manufacturing jobs to Detroit. It's not about a bailout for the automakers. Let's talk about investing in the industries of the 21st century for a change...
Talk in the U.S. that we're going to bring back high-paying, low-skilled manufacturing jobs is crazy. It's not going to happen. The only way the U.S. will maintain its standard of living is with a well-educated workforce adding value at the high end. To do that, you need smart people with smart ideas.

What you clearly don't need is more of the same. The Presidential candidates sure have a lot on their plates at the moment. But let's hope that amid the economic turmoil of Wall Street, Main Street doesn't get overlooked.

Reader Comments

Pete Mortensen

September 24, 2008 2:31 PM

Haunting pictures, indeed. I'm a proud Michigan native, and it's no coincidence that I had to leave the state in search of work. In fact, I meet more people from Michigan in San Francisco than I meet Californians.

Mismanagement of corporations, institutions and governments; a bedrock industry unwilling to change despite overwhelming evidence that it needed to; and disastrously poor urban planning have each, in their way, contributed to Michigan's horrifying decline. Detroit's the most visible blight, but cities like Flint and Benton Harbor make it look like paradise.

Why doesn't Michigan have the appetite to make real changes? Why not pour money into meaningful public transit, green energy initiatives, and live-work remodels of still-beautiful loft buildings? Why not become the first state with universal health care, thereby instantly making it a major honeypot for manufacturers to stay and prosper?

I fear that the problem is actually people like me - Michigan natives who got out before the ship sank. But I wish I could stop the leaking.

Helen Walters

September 24, 2008 2:40 PM

Thanks for the comment, Pete. I remember watching Michael Moore's film "Roger and Me", about his hometown of Flint, back in 2003. I was horrified but also slightly disbelieving: "Surely it can't be as bad as all THAT?" Seeing Detroit five years later and it's clear that it really is. The solutions aren't simple and will take nerve, foresight and money to implement. And leadership. The resignation of Mayor Kwame Kilpatrick a week or so ago after pleading guilty to felony charges just adds to the chaos in a city that seems desperate for direction. Do you still have friends/family in the area? How are they coping?

Pete Mortensen

September 24, 2008 3:05 PM

My parents, both retired, still live in Midland, which is where Dow Chemical is headquartered. Midland's faring better than most places in Michigan (Dow is faring better than the automakers), but real estate values are through the floor, the population has dropped about two percent in the last year, and much of the retail is getting replaced with 99-cent stores and check-cashing places.

My brother and his wife live in Ann Arbor with their infant daughter, but they're leaving for Philadelphia in a year. Ann Arbor's a bizarre island of prosperity unto itself, anyway, and they both have university jobs.

All of my friends who didn't go on to work for Dow are either working out of state, unemployed, or grad students. Most of my friends' parents who worked at the automakers (and there are plenty) have taken early retirement or have gone to jobs in New England or California. They're mostly doing fine, because they're educated, and they can leave if they need to. The same cannot be said for the people in the worst shape. And, of course, brain drain has made life that much harder for those who get left behind.

What's most shocking is not that Michigan is in such rough shape right now. What's shocking is that it didn't get that way 40 years ago, when the Detroit riots first hit and the Japanese automakers first began to eat Detroit's lunch. Detroit today is exactly where it was 35 years ago -- under-employed, decaying, and totally devoid of leadership. What's more alarming is that the rest of the state has caught up to it in these sad regards.

At the end of the day, everything that has gone wrong has been because of a lack of leadership and unwillingness to change. The automakers knew 35 years ago that gas prices would one day go up and stay up, but they planned product portfolios for launch this year that depend on unreasonably cheap fuel prices. The record of Michigan governors and Detroit mayors is one of incompetence and outright malevolence. John Engler bankrupted that state during what might prove to be its last period of widespread prosperity for the foreseeable future - Michigan has no money to spend to save itself. And it was by design.

I'm going to be visiting my folks in a few weeks. I wonder if it will be clear how much worse things have gotten since my last trip in December...

Helen Walters

September 24, 2008 3:17 PM

Wow. That's some commentary. As a foreigner, it can be tricky to get a true sense of history and context of the United States, but it's hard not to compare Detroit with my own home city of Sheffield, in the U.K. A city known for steel, its glory days were long gone by the time my family moved there, in the late 1970s. It still has an air of faded grandeur (if industrialism is your thing, which it is mine), yet it had to evolve and change drastically after the steep, painful decline of British manufacturing. Its civic leaders have put in a concerted effort to reinvent the city as a creative economy for the 21st century. They haven't been entirely successful, and the U.K. certainly has troubles of its own, but the realization that something had to change sank in years ago. Would that the same happens -- and soon -- in Michigan.


September 24, 2008 6:29 PM

Helen, the same forward thinking IS happening in Detroit--one just has to look for it. Instead too many reporters and casual visitors are lured into the same old photo-op of post-industrial decay that make my city a poster child of ruin.

The infrastructure here is built to handle many multiples of its current population. Compare Detroit commute times to Chicago or L.A. Living is SO much more affordable than either coast. Looking for venture capital? You could do a lot worse than Oakland county. There is no shortage of bright entrepreneurial creative people, just don't expect them to be crowding late night cafe's downtown (yet).

People have been heralding the fall of Detroit for 41 years now--only two years after I was born here. The ship hasn't sank yet Pete, shall we keep the pumps running until you make it back?

Pete Mortensen

September 25, 2008 2:05 AM

It's worked in Pittsburgh, the former center of the U.S. steel economy. It's now the best possible place to be a starving artist in the country. Let's hope Detroit can repeat the model, but it could be decades.

Helen Walters

September 25, 2008 9:55 AM

Ian, you're quite right, a weekend visit can't possibly afford an indepth examination of Detroit's infrastructure. But I was reminded of Gladwell's tale of New York City's regeneration in The Tipping Point. By focusing on small but potent details such as litter, deserted buildings, etc, Giuliani turned the city around. Detroit's obvious decay sends the message that no one cares to residents and visitors alike, even as people work furiously (and unheralded) to try and make a difference. I'm delighted to hear that things look good to you. Can you point to any specific examples of innovation or companies that are doing well? I'd love to hear.


September 26, 2008 11:20 AM

Helen Walters

September 26, 2008 11:24 AM

Thanks, Ian. Much obliged!

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