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automotive

What hurt GM plant? Restructuring, globalization, IUE-CWA tie, prof says

By Thomas Gnau

Staff Writer

Friday, August 01, 2008

The answer to the question posed by the book "Who Really Made Your Car?" may not be what you think.

James Rubenstein, a Miami University auto industry researcher, wrote a book posing that very question with Federal Reserve Bank of Chicago economist Thomas Klier. Published by the W.E. Upjohn Institute for Employment Research, the book is meant to prod readers to re-think their ideas about automotive quality and the role of geography in the auto industry.

The book contends that parts suppliers contribute as much as 70 percent of the value added in the making of automobiles. If it costs $20,000 to make a motor vehicle, $14,000 of that comes from what parts suppliers add, Rubenstein said.

In other words, Rubenstein said: "If you like the car you're driving, you're giving too much credit to the car maker."

The issue is especially keen for Dayton, where Rubenstein has been watching what he calls the "dismantling" of bankrupt auto parts maker Delphi Corp. and the announced closing of the General Motors Corp. assembly plant in Moraine.

"Dayton, of course, was historically the No. 1 parts city in the country outside of Michigan," he said. He said the first low-cost anti-lock brakes system was developed in Dayton. The problem: Other manufacturers — many of them off-shore — took Dayton ideas and made them even more cheaply, he said.

Rubenstein said parts issues are not to blame for GM-Moraine's problems, at least not directly. The Moraine plant, he said, fell victim to an overall industry restructuring, pushing manufacturing work from union-represented Northern plants to the South, where unions hold less sway.

He also points to globalization and the fact that the Moraine plant is the only GM assembly plant represented by the International Union of Electronic Workers-Communication Workers of America.

"Closing that plant means essentially there is one fewer UAW (United Auto Workers) plant that has to be closed," Rubenstein said.

Fuel costs just made a bad situation worse, he said. "The fuel costs were almost like kicking them (the Moraine plant) when they were down and out."

"The sad thing is, Moraine is just a great plant," the professor added. "So are all the other ones (plants slated to be closed). All the bad ones all got jettisoned out of the system in the 1980s."

Rubenstein said he expects his book to be on store shelves "any day." The work is meant for nonscholars who have an interest in the auto industry.

Contact this reporter at (937) 225-2390 or

tgnau@DaytonDailyNews.com.

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