Blaming the Workers? Detroit Iron Rusting Out


Today’s fairy tale is about the American Axle company, semi-located in Detroit. It was spun off from General Motors by a former GM executive, Richard Dauch. Dauch set himself up as a modern-day working class hero, who was going to prove that manufacturing was not dead in America, and only needed smart management to revive. He even wrote a book American Drive: How Manufacturing Will Save Our Country, all proud of himself for his can-do spirit and all.

Back on earth, it seems he didn’t focus in the book about how much of his manufacturing actually takes place abroad, where he has some 10,000 workers. Only 8500 left in the U.S. now, many in white collar running-the-numbers kind of jobs.

In 2008, following a bitter strike, Dauch forced his workers to accept wage cuts from $28 an hour to $18, some to $10 an hour, with many benefits lost and two job sites closed.

While blaming his workers and their union for driving up his manufacturing costs, CEO Richard Dauch paid himself a cool as ice $8.3 million in 2011. Better yet, he got his own father appointed chairman of the board for American Axle and paid Pop $11.4 million for 2011. Dad did work for his money– in interviews with Detroit papers, old dad raised the idea of moving jobs to Mexico if American Axle couldn’t lower wages. The father then made a point two weeks into the strike of very publically vacationing in Florida while workers in Detroit and Buffalo picketed in the snow.

Joke’s on us: all those out there screaming their opposition to wealth redistribution in the United States are actually only complaining about redistribution downward; excessive redistribution up seems not to be a problem. Meanwhile Detroit, a once proud city and symbol of industrial America, dies, collateral damage to the greater economy.

(c) Peter Van Buren, 2014
Image via Wikipedia

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