Trump Says Mexican Auto Industry to Blame for Detroit’s Economic Hardship
Ahead of the Michigan primary, Trump promises to return jobs to Motor City, but his plan would further suppress wages, say former UAW leader Frank Hammer and EPI’s Jeff Faux
JESSICA DESVARIEUX, TRNN: Welcome to the Real News Network. I’m Jessica Desvarieux in Baltimore.
The motor city hosted a Fox News Republican debate on Thursday, where the four leading candidates went toe-to-toe, discussing everything from Trump’s hand size to him flip-flopping on policy. It was a stark contrast to the hundreds of peaceful protesters who were outside the debate, calling for a $15 minimum wage and bringing attention to the Flint water crisis.
The billionaire Trump is leading in Michigan polls, and on Friday he held a rally where he went after how Mexico is becoming the auto manufacturer of the world.
DONALD TRUMP: About a year and a half ago I heard that Ford, anybody work for Ford here? Good company, smart company. But I heard that Ford is going to build a plant in Mexico. $2.5 billion. That’s–. And I have to tell you, you know, for a one-storey building that’s got to be about the most expensive plant I’ve ever heard of. Is that a correct statement? You guys are in the car business. It has to be one of the most expensive. So they’re gonna build it in Mexico. They’re gonna make cars, trucks, and parts. And they’re going to sell them all over, but they’re gonna sell a lot of them right into the United States. Now. Now, listen to this. Listen to this. Don’t worry, I’m with you, folks, I’m with you. And by the way, this is the reason I’m leading by a lot in Michigan. Because everyone knows, all I talk about is cars.
If you get laid off on Tuesday, I still want you voting. I’ll get you a new job, don’t worry about it. In a couple of years, you’ll go home to your wife or you’ll go home to your husband, you’ll say, darling, I have so many job opportunities I’m going absolutely crazy, I don’t know what’s happening. As opposed to now. Now you get laid off, you don’t know what’s happening. So we’re gonna, we’re gonna take care of it.
DESVARIEUX: Big promises, and some might even say in the realm of fantasy. Now joining us to break down Trump’s appeal and his rise in the Republican party are our two guests. Jeff Faux is the founder and now Distinguished Fellow of the Economic Policy Institute. And also joining us is Frank Hammer. He’s a retired GM employee of 32 years. He’s also the former president of the United Auto Workers Local 909, and worked in the GM department of the United Auto Workers. He’s currently a labor organizer at the School of the Americas Watch. Thank you so much for joining us, gentlemen.
JEFF FAUX: Good to be here.
FRANK HAMMER: Happy to be with you.
DESVARIEUX: So, Frank, you are there in Michigan. And I’m trying to get a sense of why Trump is doing so well in the polls there in Michigan. Is Trump getting support there from unionized workers? Who is really his audience?
HAMMER: The impression I have is that his real base is among small white business owners. I think that’s the economic base, the one that feels really squeezed by the globalized economy, and shrinkage of a base of their businesses. So I think that they’re feeling the squeeze, they’re his base. And I think that he’s highly appealing to some of the, some echelons of white workers, especially, probably in non-union plants. But I think that he’s tapping into the insecurities that that strata of white residents in Michigan are feeling.
DESVARIEUX: How much of this embrace of leaders like Trump, I’m going to go to you, Jeff, is really a reflection of the failure of President Obama’s policies? Especially in the auto industry.
FAUX: Well, I think it’s the failure of Democratic and Republican policies over the last, you know, 30 years or so. And that is especially on trade, where Trump is right. We’ve had this series of trade deals that were really made to help American manufacturers manufacture overseas and bring their products back to sell here. And you know, it was the, it was the Clintons and with NAFTA that started this thing. And people, you know, were told that, well, free trade was going to bring prosperity, and everyone would have a better job, and it just hasn’t worked out like that. We’ve lost millions of jobs because of these trade deals to Mexico, China, and other countries. And finally, people are, you know, getting sick of it.
Remember back in 2008, both Hillary and Obama said they would renegotiate NAFTA. Well, Hillary became Secretary of State, Obama became president, and they just abandoned that promise. So there’s a lot of anger and a lot of feeling that Washington has just been selling workers down the river.
DESVARIEUX: Frank. I’m going to ask you the same question. Did President Obama sell workers down the river when he made the deal with the auto industry in Detroit?
HAMMER: Well, I think, I want to address the question about Trump. And that is that he’s engaging in the most really unbelievable demagoguery imaginable. I recall back in August that he stated that he would see to it that factories would lead the state of Michigan, not to go to Mexico, but to go to other parts of the U.S., and then be willing to bring them back to the Midwest and bring them back to places like the Detroit region, and the workers would be happy to accept a third of the wages.
So that’s what he’s got in mind. And it’s really demagoguery that he’s talking about, you know, his concerns about work going to Mexico. He has no concern about, [certainly] around the minimum wage. He’s made it very clear that what he sees is a workforce that’s going to be working at $7.50 an hour, regardless of where people work.
So to come back to the question about Obama, I think that it’s very clear that the financial crisis was used as a way of restructuring the General Motors corporation, wiping out its liabilities prior to 2009, including, by the way, the liabilities of a polluted river in Flint. And really shaved the strength of the UAW by providing for a no-strike pledge for four years, et cetera. So I think that while they rescued the auto industry, it also restructured it and used the crisis as a way to do that at the leverage point.
DESVARIEUX: The counter would be that the deal was pretty good for the companies, absolutely it kept them solvent, but it also meant that people had jobs at the end. And more importantly, this made American workers more competitive by cutting wages, I believe, right, almost in half, Frank, there and for starting employees. So what do you make of that argument?
HAMMER: Well, the restructuring was pegged to we have to be like the non-union workers in the South. And that was the framework for the bankruptcy. For years the UAW was pledging to bring the Southern workers up to union scale, and having failed at that the bankruptcy tipped the scale and went the other direction, and said oh, no, the new standard will be the non-union plants in the South.
So yeah, people are working. Certainly not in the numbers that we once had in the auto industry. You know, my plant is 10 percent, the size of what it used to be when I was representing workers there. So the work line, yeah, there are jobs. But they’re certainly not what they once were, and that’s going to continue with more free trade agreements. If the TPP is passed in the Congress you could see a competition now going, not only with China, but with Vietnam and so on.
DESVARIEUX: Jeff, you mentioned people’s anger and that sort of being part of Trump’s appeal. But how do people not think that people in Mexico or Vietnam are taking their jobs? And with that being said, what is actually a more viable solution or more productive framework for workers to think about these types of issues when it comes to advocating for getting higher wages and jobs to stay in the United States?
FAUX: I think the answer is that you need politicians to stand up and people to stand up and say the enemy here is not the Mexican worker. The enemy is the U.S. and Mexican elites, the corporate elites, who have, who arranged this deal in NAFTA so that Mexican workers could remain at low wages while producing goods that Americans used to make at high wages.
The problem here is not that, you know, there’s not, there’s jobs going in Mexico. If it was an economic policy that cared about people on both sides of the border we would have Mexican wages rising like crazy. And the fact is that they’re not. The whole point here is that yeah, Mexican–Mexico can have an auto industry. We can have an auto industry. But it only makes sense if wages on both sides are rising. What’s happened is that the NAFTA deal ended up with wages in America being driven down to Mexican levels. And that’s what’s driving people crazy.
You have to understand that if the Mexican auto industry was so prosperous and making people so rich in Mexico, there wouldn’t be these waves and waves and waves of undocumented migration to the United States.
DESVARIEUX: All right. Jeff Faux, as well as Frank Hammer, thank you both for joining us.
HAMMER: Thank you.
FAUX: Thank you.
DESVARIEUX: And thank you for joining us on the Real News Network.
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