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Retirees blame the auto industry's problems on shortsighted management

CLEARWATER — While the chiefs of Ford, GM and Chrysler were in Washington last week begging for $25-billion, some car-loving Americans were musing over what went wrong with the U.S. auto industry.

"It was very shortsighted not to see what might happen with gasoline prices,'' said Byron Richardson.

"The Japanese and Koreans just jumped on what we had and copied everything,'' said Joe Terry.

"We were fat, dumb and happy,'' said George Corich.

These three men know a lot about the Big Three because they used to work for Ford, whose headquarters is in Dearborn, Mich. Now retired, they live in one of the nation's most unusual examples of senior housing — an eight-story apartment building owned by the city of Dearborn, but improbably located 1,200 miles away in Clearwater.

Nearly half of the units in Dearborn Towers are occupied seasonally or year-round by Dearborn residents, many of them veterans of the U.S. auto industry. On the front of the building is a picture of a horseless carriage, homage to Henry Ford and his world-altering invention. The parking lot is full of Mercurys, Buicks and, of course, Fords.

Not surprisingly, the bailout is Topic A around the pool. Unexpectedly, some of the auto retirees agree with many other Americans when it comes to the Big Three.

"I think the bailout is the dumbest thing in the world,'' says Joe Terry. "They're just going to eat that money up."

'On life support'

When Terry joined Ford in 1969, the U.S. auto industry was still big in every way.

"The Ford Galaxy, the Lincoln Town Car — they weighed 4,000 pounds compared to what? — 2,400 today?'' he says. "They got like 5 to 7 miles, but gas was cheap — only 30 cents.''

Terry, who spent 18 of his 31 years at Ford's Dearborn research center, was salaried, but saw firsthand the way the United Auto Workers protected the interests of its hourly union members.

"If there was anything electrical, they didn't want you touching it, they wanted an electrician touching it,'' Terry says. "But I have to say that the trades did give us a lot of benefits. If it wasn't for them fighting for insurance and other things, we wouldn't get it.''

And the benefits were excellent. Fourteen "holiday'' days in addition to regular vacation. Stock plans with matching company contributions. Full medical, eye and dental insurance.

Today, critics cite those "gold-plated'' union contracts as a prime cause of the industry's woes, putting the Big Three at a disadvantage with automakers in lower-wage countries with universal health care.

But Terry lays more blame on the "arrogance'' of top management and the rise in gas prices that let Asian companies and their fuel-efficient cars flourish in America — often with the help of the Big Three themselves.

"I myself showed three engineers from Hyundai how to test air conditioning,'' he says. "There was nothing special about foreign cars — it was ours rehashed.''

Another problem in Terry's view: American CEOs have focused more on short-term profitability than innovation while "the Japanese management looks down the road. That's what makes us fall behind."

Now, eight years after retiring, Terry, 64, sees little future for Ford, Chrysler and GM.

"They're on life support. What I think they should do is merge with Asian companies."

Execs' extravagance

From his seventh floor balcony in Dearborn Towers, George Corich enjoys a superb view of Clearwater Beach. But his two-bedroom apartment has only a few bulky pieces of furniture.

"You can see I live simplistically,'' says Corich, a spry widower of 84.

When he retired from Ford in 1980 after 28 years, Corich got a fixed monthly pension of $1,300. Last year the company eliminated its generous retiree health insurance in favor of an annual payout of $1,800.

One of Corich's sons is a salaried employee of Chrysler's Jeep division, the other an hourly worker at the same Ford truck plant where Corich spent years. If the Big Three collapsed, his boys would be among the 3-million people that the industry claims would lose their jobs.

"It would be goodbye (to) my pension,'' Corich says.

He agrees with former Massachusetts Gov. Mitt Romney, who wrote in the New York Times that top management "must go'' and that the industry needs to "drastically restructure itself'' with the help of bankruptcy court.

"That's the most intelligent analysis I've ever read,'' Corich says. "He knows what he's talking about because his father took over American Motors.''

Byron Richardson, who lives down the hall from Corich, was irked that the Big Three CEOs flew by private jet to Washington to beg for billions in taxpayer money. He's not opposed to a loan, but he wants conditions.

"We need to tie the CEO and upper management pay to the profitability of the companies,'' he says. "You don't want CEOs making $26-million when the companies are losing money.''

Richardson spent just a year with Ford before becoming a teacher and school administrator. But his father was a Ford employee for more than 35 years, and his mother collects a small pension as his widow.

"I'm kind of split on that,'' he says of calls to cut or eliminate retiree benefits. "I think some of the contracts over the years have really hurt. But those people have worked all those years figuring they were going to get that.''

Ford in their future?

As with the U.S. auto industry, the fate of Dearborn Towers is unclear. Then-Dearborn Mayor Orville Hubbard bought the bankrupt building for just over $1-million in 1967 as a Florida "camp'' for winter-weary residents. The city later rented apartments to Dearborn retirees, and has since allowed non-Dearbornites to move in.

Like other Michigan cities, Dearborn is suffering as automakers slash jobs; the state's jobless rate is 9.3 percent, the nation's highest. Mayor John O'Reilly wants to sell the building, appraised at $7-million, and spend the money at home.

Residents will have a chance to buy it, though no sale is expected until the market picks up.

Joe Terry already plans to move out. He can't afford his $865 monthly rent because his 401(k) plan has tanked — Ford shares are just $1.23. But as long as there is a Ford, Terry will stick with Ford vehicles like the F-150 pickup he now drives.

"Always Ford,'' he says. "I have my kids so well trained they call me if they even think of not buying a Ford."

Susan Taylor Martin can be reached at

Retirees blame the auto industry's problems on shortsighted management 11/23/08 [Last modified: Friday, November 28, 2008 7:38pm]
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