What a GM downturn does to Flint
Statistically speaking, Flint, Mitch., is in a depression. More than 25 percent of its work force is unemployed. However, because of the supplemental unemployment benefits (SUBs), combined with unemployment checks, enjoyed by the United Automobile Workers, the share of workers who are receiving only unemployment checks of $190 per week is considerably less. Rather, the workers now receive a substantial percentage -- in some cases up to 90 percent of their normal paychecks.
Thus, as Flint Mayor James Rutherford notes, "It could be worse." Mayor Rutherford figures that the workers and the city have until next spring before a real crunch sets in. At that point the SUBs run out.
While much of the attention to the troubled auto industry is centered on Detroit, Flint's difficulties are similar to those of many other areas that depend on car manufacturing, including several in Michigan.
Mayor Rutherford is optimistic that the city and its plants will survive. "Flint's been through greater valleys than this," he says, "and it is still vibrant, moving, and dynamic. This is not the beginning of the end, I tell cynics, but the end of the beginning."
Even though the mayor is optimistic, Flint still faces some major hurdles. Foremost among them is the possibility that General Motors might move its Buick assembly plant 10 miles out of town to a site in Vienna Township on which it has purchased an option.
For Flint, which derives a substantial portion of its revenues from an income tax, this move could create hardships. Already, the city has had to cut its services severely, since it cannot collect income taxes on SUBs. Mayor Rutherford says revenues are running $3 million under the city's projections this year after falling $5 million short of its goals last year. Thus far the city has laid off 250 workers, and more cutbacks in services are in store. For example, garbage pickup will now be every other week. With the colder weather coming, the mayor is hopeful that residents will be able to live with their garbage a little longer.
GM is looking at a possible new site for its Buick assembly plant because it is faced with an Environmental Protection Agency deadline to clean up the emissions from its paint operations. GM figures that for the $3.5 billion it will cost to meet the EPA standards, it can nearly build a new facility. At the same time, it could convert its current Buick plant to producing parts for GM's other divisions.
Flint, for its part, is trying to put together some other sites near the city which could be annexed and sold to GM. One problem is that Buick needs at least 400 acres, since it wants to build a plant that will be all on one floor. The current Buick plant has three stories.
To many Flint residents, it seems inconceivable that Buick would leave the city. Flint was the birthplace of both Buick and GM. Flint and Buick have both seen such notables as William C. Durant, founder of GM; Walter P. Chrysler, founder of Chrysler; Charles W. Nash, founder of Nash Motor Company (now American Motors); Louis Chevrolet; and Harlow Curtis, a GM president.
Furthermore, in the current downturn, Buick has been an important mainstay for the area. While GM's sales are down 18 percent, Buick's are down only 8 percent. And Bucik has captured a larger share of the market -- mainly from other GM divisions.
According to Donald H. McPherson, Buick's general manager, the division has also been active in building parts for GM's successful X-car, which has resulted in overtime for some of the plants in Flint. Buick will also manufacture parts for the J-car to be introduced next spring, although the division itself will not introduce any new models until at least 1982.
Unfortunately for the town, Buick's good fortune has not been sufficient to take up the slack left by the five Chevrolet plants and three AC Spark Plug plants that are in the throes of the recession.
Mayor Rutherford is not optimistic that Flint can ever diversify out of the auto business. There are a lot of other areas where companies will build first, he says, which don't have the burden of competing with the United Automobile Workers' salaries. On the other hand, he says, Flint has a history of factory work and a skilled labor force.
Even so, Flint is not sitting still while the auto industry shivers. The city is considering a proposal to add a race track, which the mayor says, "on a dollar-and-cents basis," can mean almost as much in taxes to the city as the Buick assembly plant.
Tourism, in fact, is one area that local officials hope can be expanded. A new Hyatt Regency Hotel is under construction, and the city is proud of the job it has done revitalizing the area along the Flint River.
One of the most ambitious tourism projects is for an eight- story glass domed amusement park, aptly called "Autoworld." The theme park originates from the drawing board of the Flint Area Conference Inc., a private, nonprofit development corporation funded by the Mott Foundation and local banks, utilities , and other businesses.
Autoworld will include exhibits, such as a three-story walk through an automobile engine, and such standbys as roller coasters and thrill rides. According to James Schaefer, the conference's president, the theme park could cost as much as $40 million. To fund it, the community has applied to the federal government for a $13 million urban development grant. If Flint gets the money, it will probably be the first time the government has bankrolled an amusement park. Mr. Schaefer points out, however, that the park could attract 900,000 people a year to Flint -- making tourism nearly as important here as the automobile.
The amusement park, he maintains, would not replace GM, but would "broaden" the city's base. With a 25 percent unemployment rate, Flint knows the dangers of being a one- industry town.