What an impressive picture: Two shaking hands illustrate the partnership
of the City and its major industrial player, General Motors, together
with the slogan Keeping GM! Having recently
to Lansing from Germany, I am reminded of an older version of
this same handshake: It was created in 1946 after East Germanys
communists had pushed leftover social Democrats to conform to
a single party regime. The partys flag had symbolized a
system based on communist consensus two hands shaking.
Yes, indeed, the very same symbol was on the citys poster
campaign Lansing Works! Keep GM! In 1998, 41 government
officials and organizations approved a regional resolution pledging
intergovernmental collaboration to keep General Motors in the
area. Well do everything that needs to be done,
said Lansing. How could we be anything less than the Car
Capital of the World?
But the historical handshake could also be seen as a foul propaganda
trick, at least for the 4,000 households living near the two automobile
plants, whove suffered from solvent odors, a diminished
quality of life and poorer physical health for decades. In April
2002, environmentalists and residents considered appealing GMs
increased air pollution permit (allowing up to 270 tons of toxins
each year) if the automaker didnt improve its anti-pollution
control systems. On Friday, May 3, the Lansing State Journals
headline claimed that this: Move is death blow
This quote came from an economist, David Cole, president of the
Center of Automotive Research. Responding to my inquiry, he told
City Pulse: The environmentalists would like us to go back
to riding horses, camels and donkeys. Its a serious mistake
to be anti- Free Market. Look at Russia: Theyre a wonderful
example of what socialism does to environment. In Coles
opinion, the environmentalists werent keeping in line with
I am surprised he would say something like that. Russia
screwed up its environment in the same way that we did,
says Warren J. Samuels, an emeritus professor of economics at
MSU. GM is playing the usual business game of blackmail:
Do what we want, or well go elsewhere.
Reading that headline again Move is death blow
to Lansing I think of the East German newspapers
that implored people not to move to the West in 1989. The economy
would collapse otherwise, the papers panicked.
As a matter of fact, the regime broke down a few months later,
but living conditions in eastern Germany have improved a lot since
then. Today people regard the handshake of 1946 with an incredulous
shake of the head.
With the phrase death blow in mind, I started to think
about the true nature of Lansings economic relationship
to GM. Did we have a baby here, dependent on its mothers
umbilical cord? What about other employers?
Earlier this month, the environmentalists and General Motors reached
a compromise to tighten restrictions on emissions at the Craft
Centre plant in west Lansing so that General Motors can build
the SSR, a new model Chevrolet, there. GM can now move forward
with the plants $70 million upgrade. But the story isnt
over yet. The environmental groups still plan to fight the automaker
on an appeal of its air permit for a new plant in Delta Township.
Would GM really consider moving its plant to a place where it
could produce toxic emissions with less trouble? Would it really
be a big role of the dice, as David Cole predicted?
And if so, hasnt Lansing Mayor David Hollister managed to
diversify industry enough since he was first elected in 1993?
Looking for answers, I went first to City Hall. Unfortunately,
Hollister had just declared a moratorium on comment to City Pulse.
He was probably still angry with City Pulses critical reporting
on city government issues. Wasnt Hollister angry that, after
the handshake, GM wasnt keeping its part of the bargain?
So I went to talk with economic experts instead.
not an accurate statement to say the local economy would depend
solely on GM for good-paying jobs. We have a fairly diversified
economy, asserts John Melcher, associate director of MSUs
Urban Affairs Center. If you compare the dollars being spent,
education is probably our biggest industry. According to
the Michigan Department of Career Development, 38,300 Lansing
residents work in the educational services, with Michigan State
University (13,600 staff and 17,600 student employees), the Lansing
School District (3,500) and Lansing Community Center (2,000) at
the top. The state government comes in second, with 19,700 employees.
Whereas the top two employers have remained fairly stable over
the years, the manufacturing sector has been shrinking. In 1973
there were 22,800 GM jobs in Lansing. This number decreased to
20,000 in 1988 and sank to 10,500 jobs, where it remains today.
At the end of 1996, the average employee was 46 years old and
thinking of retirement. Back then, there were rumors that GM might
downsize in Lansing at the end of 2000 if plants couldnt
streamline production and attract more skilled workers. An anthropology
field study conducted that year quotes a GM union member: Yes,
it takes a crisis. Youve got to say, In Lansing, in
three years, were shutting down. Youd be amazed
at what we could accomplish, to turn things around in those three
Things have really turned around since then. In February 1997,
David Hollister called upon MSU President Peter McPherson to help
transform Lansings school district. GM had told the city,
By the way, Mayor Hollister, half of our workforce is going
to retire in the next 10 years. How are the Lansing schools?
Hollister recalls. GM said, The reason we came here
is because you have the best workforce, but that competitive advantage
can be lost if you dont take care of this. So I went to
Peter and we started a series of meetings to discuss this. I asked
him to take this on, and he said, This sounds like fun.
(Source: MSU Media Communications). The Blue Ribbon Panel on the
Lansing School District was founded. GM needed a new highly skilled
work force to replace the old one. So it was merely logical that
the auto giant invested about $500,000 in a program called Galaxy,
which uses computers to teach Lansing elementary children about
science and the arts.
In April 1997, former Lansing City Councilman Rick Lilly complained
about GMs continuous threats to leave Lansing and its regular
requests for tax abatement. When he commented that Lansing could
prosper without GM, from its growing technology sector, the negative
response was overwhelming. Rick Lilly was voted out of office.
The Blue Ribbon Committee to Keep GM was founded in October 1998.
Since then, Lansing continues to fight against plant closings
with one single voice, as the Lansing Regional
Chamber of Commerces vice president, John Pearson, points
out. American cities have had to deal with globalization and downsizing
since the early 1980s. About 400,000 jobs disappeared in the U.S.
automobile industry between 1978 and 1985. Japanese and Korean
companies competed with the management-heavy, Fordist model, using
a model of production called kaizen, or lean
production. What was happening in Michigan was just part
of an overall economic trend.
Peripheral workers and privileged new skilled workers make
up a workforce that is constantly declining. In the long term,
industry is tending to employ fewer and fewer people, explains
the French economist-philosopher André Gorz in Capitalism,
In other words, state subsidies of large industry can actually
contribute to outsourcing and the growth of a low-wage sector.
Melcher explains: Whats happened is a significant
shift in our wage structure, which has been declining since the
1960s. Look at the new GM investment. These are actually fewer
jobs than there were before, and this contributes to the declining
wage structure. Another GM investment, the proposed Delta
Township plant a few miles west of Lansing, which is supposed
to open in 2005 and bring some $1 billion into the region, wont
become a major job engine either. Pearson, who is in charge of
economic development at the Chamber of Commerce, said: It
may not be 2,500 brand-new jobs to the region. I think people
employed by GM will move around within the system.
In fact the largest sector for job growth in Lansing is within
the service sector, where wages are usually lower. In March 2002,
59,000 Lansing residents worked in the service sector. Thats
a remarkable increase of 30,000 people since 1983, representing
a climb of 103 percent. Within the same time period, the manufacturing
sector employed 11,000 fewer people (minus 31 percent). And todays
transportation equipment sector employs 11,800 people 14,000
less than in 1983 (which is a minus of 54 percent).
André Gorz considers this trend of fewer high paying jobs
and a growing low-wage service sector to be a typical of all high-tech
economies. Most of these jobs have the following function:
the two hours you used to spend mowing your lawn, walking your
dog, going to fetch your paper, doing your housework, or looking
after your children are transferred to a service provider who
does those tasks in your stead, for payment. Moreover, this type
of employment develops only in conditions of extreme inequality.
Interestingly, the U.S. census data didnt show evidence
of growing economic inequality in Lansing/East Lansing, although
the manufacturing sector has shrunk considerably in the last decade.
The share of households with incomes higher than $100,000 rose
to 11 percent in 2000 (1989: 3 percent). At the same time the
share of households with incomes below $10,000 fell from 13 to
Obviously, Lansings economy has been able to adapt to the
decline of manufacturing jobs, in contrast to Flint, which suddenly
was hit hard by GMs plant closings. Confirming this, John
Revitte of MSUs labor and industry relations department
strongly denies any parallels. GMs moving would certainly
not be a death blow. Im sure the suppliers could work for
other plants, and MSU and the state government would compensate
for the loss of jobs. Flint was much more of a one-industry town.
So Lansing residents shouldnt worry so much about the Car
Capitals economic future. Moreover, at the other end of
town, there are signs of more diversification. On the MSU campus,
the National Superconducting Cyclotron Laboratory, itself already
a great win to the area, has applied for a project that could
bring $1 billion in new investments to town: The U.S. Department
of Energys Rare Isotope Accelerator.
Melcher has observed the continuous changes in the local economy
from their roots. He works on a project with low-income individuals
who repair computers and are then able to take them home. A
hundred years ago the Board of Water and Light was built. Since
then its been municipally owned. A similar opportunity exists
with the IT sector. That could be explored with the Blue Ribbon
Committee. I hope theyve been looking on some of these issues.
But the city government doesnt really have much time to
focus on information technology. Hollisters Goals
for 2002 can roughly be summarized in two words: Keep GM!
Reading through the mayors Web site you find several variations
of one single sentence: Continue to work with General Motors
and the Blue Ribbon Committee on the development of the Lansing/Delta
the speeches of David Hollister Ive heard in the last couple
of years, I remember that he was trying very hard to keep GM,
says MSU economist Charles Ballard. Diversifying the economy wasnt
a major issue of the Hollister administration, Ballard believes.
When asked whether he thought the city could keep GM while at
the same time attracting other technology-based businesses like
computer businesses, he replied: Absolutely. This is the
kind of thing that takes time, but its possible.
The Chamber of Commerce has created a special marketing program,
the Capital Choice Partnership, to bring more dollars into
the pot, as John Pearson says. He tells me about the funding
cycles of this 12-year-old campaign. The most recent one is what
we kind of called the Keep GM cycle. Although
he considers a diversified economy to be something good, he said
that we need to increase our (industrial) base employers.
Pearson argues that the strong focus on the automotive industry
would make the local economy immune against crises such as the
dot.com reshuffling. After all, IT jobs dont hire
many people, and their capital investment is fairly limited.
Pearson makes it seem as if the Car Capital doesnt need
another growth sector. The reason we were not a technology
state before is because a lot of our auto industry jobs were not
counted as technology-driven positions, when in actuality they
were! [The statisticians] have done a lot to help redefine the
types of jobs rather than the overall category of the employer.
And what thats done is risen Michigan into one of the top
five in the nation in technology workers. One simply needs
to play a little bit with the numbers!
If Lansing is a technological leader, I thought to myself, why
isnt it familiar with environmental protection systems being
used in Germany and Japan for years? The environmental technology
sector has even spurred economic growth in other industrial countries.
According to the Organization of Economics Cooperation and Development,
which assists countries to cope with the challenge of globalization,
Germanys eco-industry producers of clean
production equipment, consultants and environment-related researchers
and developers employs 320,000 people, sales exceeding
$18 billion and exports 40 percent of its production volume.
We have to understand that Europe and Asia are way behind
us in the use of ecosystem-friendly machinery equipment. That
explains why its a growth industry over there, claims
Pearson. Ballard, who specializes in public economics at MSU,
drew an even more explicit image, describing the economy and ecology
as oppositional forces: There was green in terms of environment
and green in terms of dollars. The Lansing State Journal
seems to also see the issue as an insoluble conflict. On May 12
the Journal wondered whether the environmental watchdogs were
Friend or Foe?
This war of words reminds me of a debate in Germany, 15 years
ago, when the secretary for environmental affairs swam across
the Rhine in order to prove that the toxins had disappeared. Today
its hard to imagine a politician in Germany saying something
similar to Hollisters recent statement calling environmentalists
mean-spirited extremists. The environmentalists had
caused some trouble in the Keep GM! Committee. Their
proposed solution to pollution prevention a regenerative
thermal oxidizer would cost GM an estimated $2.7 million.
That amounts to about $38 per car for the $38,000 SSR, the new
vehicle for which GM needs the permit to produce it in Lansing.
Much ado about nothing?
In Germany there are no two colors of green anymore, at
least not in the large industries, comments Peter Kessler,
who graduated with a masters degree in environmental engineering.
Less pollution is more profit. Among German automakers this simple
rule has become common sense. Theres even competition to
get the best marks in the class. In December 2001, 2,650 companies
were awarded the EMAS (Eco-Management and Audit Scheme),
an official license for clean industrial production.
Companies dont conform to regulations because they
love Mother Nature but because of the economic side effects,
comments Kessler, whose supply company produces synthetic moulds.
Its easier, if you have zero emissions. Then, you
dont need to buy an expensive regenerative thermal incinerator.
Naturally this only works because of Germanys extremely
strict environmental protection laws. In most cases it costs
a lot of money to pollute the environment, so youd rather
implement anti-pollution technologies. Mercedes Benz uses
a new powdered paint technology to reduce air pollution. Fifteen
years ago the auto industry set an example to the other economic
sectors. Back then it became trendy to prove best practice
in regard to environmental protection. The German automotive industry
turned their forced investment into good PR, says Kessler.
The Organization for Economic Cooperation and Development criticizes
the fact that in the United States, ecology and economy remain
enemies. Although significant expenditure has been devoted
to environmental protection (over $120 billion in 1992), there
is no evidence that the economy has been adversely affected as
a whole by strong environmental protection policies. Still,
urban, industrial and agricultural activities continue to exert
pressure on the environment: A sizable fraction of the U.S.
population is still exposed to air of unsatisfactory quality.
The organization recommends reviewing government financial
assistance for the provision of environmental services in the
light of the polluter-pays principle and the user-pays principle.
Unfortunately, its hard to imagine an end to this cycle
of throwing ecology and economy in opposition. Since the organization
published its report in November 2000, quite a lot of things have
happened. Recently the League of Conservation Voters released
its 2001 Presidential Report Card on the first year of President
Bushs administration. Calling that year the most damaging
period for environmental policy in a generation, the report
goes on to say: Not since the opening months of the Reagan
administration has there been such a deliberate attempt to dismantle
federal protections for our environment. With a continued record
of hostility to environmental protection, we have little choice
but to offer President Bush and his administration a near-failing
grade. To prevent the worst, an organization called unionvoice.org
has put a petition on the Web to vote against Bushs politics.
Warren Samuels, a distinguished professor emeritus of economics
at MSU who has lived in the area since 1968, thinks its
pretty tough to fight environmental protection issues on a local
level (It kind of reminds me of the movie Erin Brockovich),
since the Federal Clean Air Act can be circumvented through different
state regulations. GM has always tried to minimize its tax
bills and environmental protection costs. Accordingly, it is true
that a trade-off between environmental protection and the regional
economy is involved, but this is because the national government
has not acted to avoid it.
How can the citys economy prosper without having to face
pollution and environmental damage? My pursuit led me to a Web
site titled, Save GM (www.moveon.org/saveGM). Here,
some online interest groups have come up with a new way to fight
the shortsightedness of American car companies. They believe General
Motors will become trapped in a market niche by focusing on products
like the notorious gas-guzzler SSR, which will be built in Lansings
Craft Centre. They want to save the American car industry
from itself. The site encourages visitors to send GM a petition,
pledging: I will seriously consider buying a General Motors
vehicle only if GM offers a fuel-efficient line of vehicles, if
GM supports meaningful increases in fuel efficiency standards
and if GM supports efforts to reduce carbon pollution and global
warming. Participants are enrolled in a drawing for the
new fuel-efficient Japanese car, the Honda Civic Hybrid.
The aim must be to democratize economic decisions,
writes André Gorz. This sounds like a much better handshake.
One that people wont remember as either a fatal action or
a naive attempt. The mayor would be well advised to consider a
slogan which links Lansings automobile traditions to its
future, Keep GM and Go Green!