The automotive melt down: how it's burning black America: higher gas prices, loss of industry-related jobs are crippling businesses, consumers

Ebony, Nov, 2008 by Frank S. Washington

Since 2006, Chrysler, Ford and GM have announced that they will cut more than 75,000 mostly blue-collar jobs and shut almost two dozen plants. If automotive plants are no longer producing cars and trucks, then they don't need parts, and that means their suppliers have to close plants and lay off workers too. This drain of automotive jobs has impacted Blacks more than other ethnic groups.

Interviews with several Black automotive assembly line plant workers who have taken buyouts or retired revealed four reasons other than the economy for their departure: bigotry, boredom, stress and a worsening work environment.

"A lot of Blacks are leaving because of the racism," says Bill, a 30-year veteran at Ford who didn't want his last name used. "White folks get breaks; Black folks are held to the letter of the [work rules] law."

The price of gasoline now hovers around $4 per gallon. That has caused consumers to buy smaller cars and put a premium on four-cylinder engines. Manufacturers can't make enough of either. They've either halted production or closed pickup-truck and big sport-utility plants. They've announced plans to bring small cars from their European subsidiaries, and they've accelerated research into the production of hybrid vehicles and plug in electric cars.

Meanwhile, in addition to adjusting their buying habits to cope with higher-priced gasoline, Americans are also driving less or using mass transit. All of this has reduced the number of vehicles being sold. That translates into fewer jobs necessary to make cars and trucks.

"African-Americans have been especially hard-hit by the loss of jobs in the auto industry, says economist John Schmitt. He co-authored a study by the Washington-based Center for Economic and Policy Research that found African-Americans have lost the equivalent of about 120,000 automotive jobs since 1970.

This is an economic tsunami whose waves ripple across more than automotive assembly plants. Black-owned suppliers are facing tough times too.

Chrysler, Ford and GM have traditionally been the leaders in purchasing parts from Black-owned suppliers. But as their market share has fallen, so has their production and the number of parts that they need. With this trio recently announcing the closure of plants that build pickup trucks and full-size sport-utilities, the number of parts they purchase from Black-owned suppliers will shrink.

Couple that boa constrictor squeeze on Black-owned automotive suppliers with the never-ending pressure on all automotive suppliers to cut prices to remain competitive in a consolidating global industry and Black-owned suppliers find themselves in an inescapable vice that keeps getting tighter.

Bill Pickard is thunder of the Global Automotive Alliance. One of his Detroit-area companies supplies plastic fuel delivery systems to automakers and employs 400 people. He summed up what's at stake, saying:

"We [Black-owned automotive suppliers] are the children of the '60s," Pickard says. "There's nobody behind us. If we go out of business, there's no one to replace us. So we must survive in order to pass on our businesses either through inheritance or through a succession of ownership."