Motown Blues: What Next for Detroit

For much of the twentieth century, Detroit was proudly known as the Motor City. Today, a drive up Woodward Avenue, its once bustling main street, takes you past abandoned buildings and debris-strewn lots. Landmarks of Detroit’s storied history, however, are still in evidence despite the devastation. About five miles north of the Detroit River are the remains of the Ford Highland Park plant. At this site in 1913, Henry Ford mated the Model T and the moving assembly line to put the world on wheels. A faded historical marker reminds us that “mass production soon moved from here to all phases of American industry and set the pattern of abundance for twentieth-century living.”

Sixty miles northwest of Detroit is Flint, a hardscrabble industrial town that was once the epicenter of General Motors, where sprawling factories used to be as common as parks in other cities. In 1937, autoworkers in Flint made their own history when their famed “sit-down” strikes paralyzed GM’s assembly lines and energized the fledgling United Auto Workers union. The plant where the sit-downs took place is long gone, and GM’s presence is a shadow of its former self, but the legacy of what took place that cold winter in Flint transformed American life.

The combination of Henry Ford’s assembly line and the emergence of the UAW produced what may be Detroit’s most important model: the blue-collar middle class. Over the next seven decades, the UAW forged a link between rising productivity and workers’ paychecks that allowed autoworkers to buy homes, purchase cars, and send their kids to college. The result was what Walter Reuther, the legendary president of the UAW, called “high velocity purchasing power,” and it fueled both corporate success and economic growth in the aftermath of the Second World War. Along the way, the union pioneered new benefits, from paid health care to pensions, which were widely adopted by both union and nonunion firms, setting a standard for millions of American workers. In the quarter-century between 1947 and 1973, productivity doubled in the economy and so did median family income. As Nobel Prize winner Paul Krugman put it, “everything we know about unions says that their new power was a major factor in the creation of a middle-class society.”

Now the Detroit Model is about to be recalled. General Motors and Chrysler skidded alarmingly close to bankruptcy in the last days of 2008, and Ford was not far behind. The domestic automakers’ top executives and the president of the UAW came to Washington, D.C., hat in hand, in early December, pleading for $34 billion in loans and lines of credit to survive until the economy recovered. Senate Republicans—guided by a potent mixture of ideology, the influence of nonunion carmakers in their states, and a colossal dislike of unions in general and the UAW in particular—torpedoed their request. A wreck of the domestic auto industry was avoided only when, in the w...