Janesville by Amy Goldstein

How many times do we consider the impact that business decisions have on the local communities? In the book Janesville, Amy Goldstein shows how the closure of the General Motors plant in the city of Janesville has deep, long-lasting effects on the community. You become a fly on the wall as families make some very painful decisions. You will feel sad, angry and inspired by the end of the book. And if you think this is a story of white middle America being abandoned and supporting Trump, think again.

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You are listening to the Book Judge, a podcast about books that you should read if you are interested in business. I am your host, Conrad Chua. With more than 10 years of experience in business education, I have seen the amount of business theories and information explode in that time. I help you by introducing books that anyone in business or business school should read. Think of this as your curated reading list that will give you a better grip on how to approach the complex issues that businesses face.

Today’s episode is the book Janesville by Amy Goldstein. It examines how the lives of the citizens of Janesville were changed forever in 2008 when General Motors shut down the auto assembly plant that had been the economic heart of the city. Goldstein lets us into the living rooms of different people in Janesville as they make painful changes to their lives following the plant closure. It is like one of those epic historical movies where you think you know the ending but nothing plays out as you thought it would.

I chose this book because, many times we look at business decisions purely from certain metrics. Can this decision save the company x millions, or which city is offering the best tax incentives for our new headquarters. But it is easy to forget that these business decisions have huge and lasting impacts on communities. If I were to guess, communities have no voice in the corporate boardrooms where these decisions are made. It doesn’t help that the staple of business education, the case method, simplifies these decisions by ignoring these voices.

The book starts in 2008, when a Senator from Illinois is campaigning to become the first African American President of the United States. America, and the world, is just beginning to grapple with the enormity of the global financial crisis and US automakers are hit hard. That year, the CEO of General Motors, Rick Waggoner, announces the closure of the plant in Janesville.

The GM plant in Janesville, Wisconsin, had been in almost continuous operation for 85 years and at the time of its closing, was GM’s oldest operating plant. For many families, it was the only work they have known, going back several generations. Unfortunately, the plant at Janesville made the huge gas guzzling SUVs for which the market had shrunk considerably in the face of high oil prices.

GM’s announcement is greeted with shock and disbelief. Many think that it would only be a matter of time before GM reopens the plant. In the meantime, unemployment benefits and union support would tide them over. There are others who treat this like a usual recession. The head of the local Jobs Centre, takes out his playbook with a section for individuals called “What to do after a Lay-off”, and quickly puts in place measures such as retraining grants and job support schemes. The local Congressman, a then up and coming star of the Republican Party by the name of Paul Ryan, lobbies GM to reopen the plant. Ryan hopes that GM would shift production of more profitable models to Janesville. At that time, the young Congressman, like everyone else, thinks Janesville can bounce back, as it has done many times before. But it soon becomes painfully clear that this is no ordinary recession.

One recurring theme was the role that job security played. The money was of course important but being able to support your family contributed to people’s sense of self-worth. As one laid off auto worker put it, he could not let his kids feel the money shame. He would do whatever it takes to earn money. He, like many others in Janesville, became GM migrants. Car pooling and driving more than 280 miles across state lines to work in GM factories that would take them.

Janesville has a strong, gritty can-do spirit. And we see that through the stories in this book. There are the auto-workers trying to make ends meet, the banker who tries to rejuvenate the city, the social workers who are left to cope with the rising incidence of social issues. Janesville has to do all this alone. There will be no meaningful help from the Federal or State Governments, the unions or GM.

It is striking how ineffective many of the well-meaning government schemes were. For example, in the immediate aftermath of the GM announcement, Democrats and Republican lawmakers in Wisconsin convene the Collaborative Organisations Responding to Dislocation committee or CORD. The idea was to get academics and consultants to help develop solutions for the community. CORD never went anywhere.

Then there is the issue of how large corporations like GM are courted by different cities for investments. The business community in Janesville cobbled together a very impressive package to persuade GM to return. There were generous tax breaks, and the local energy company offered reductions in utilities payments. The main healthcare insurers offered reductions in insurance payments. It was the largest incentive package in Wisconsin’s history. But it all came to nothing. A city in Michigan offered five times what Janesville had offered. It was yet another crushing blow to the city.

One area of the book that I was very interested in was job retraining. For about two years, I was a Director in the Singapore Workforce Development Agency that was set up to help workers retrain to get better jobs. Job retraining was also one of the few issues that Democrats and Republicans could agree on. However, Janesville showed the shortcomings in relying on job retraining. Most of the auto workers lacked the skills needed for new jobs, and many of these new jobs did not pay anywhere close to what they were getting from GM. They had to attend classes while worrying over how to pay for basic necessities and many dropped out. Ironically, those who dropped out to take whatever jobs they could find fared better than those who stuck through the long training courses. By the time these people had completed their courses, they were competing against an even larger pool of unemployed workers for an even smaller number of jobs.

<Cue Did you Know music> This is the part of the podcast where I place the spotlight on one part of the book that <I found surprising > you can use immediately in your business, or in an interview, or just to impress your business school friends. I call this the Did You Know section.

I did not know before reading this book that Janesville was the home of the Parker Pen Company. Now some of you might be too young to even know what a pen is but for myself, growing up in Singapore in the 1980s, Parker Pens occupied the aspirational luxury niche that Apple currently owns. A Parker pen was not a luxury item like a Montblanc, but the thing that aspiring middle class parents might save up to buy for their first kids going to university. That was definitely me and I have to say that I treasured my first and only Parker Pen tremendously. It was so smooth to write and had the perfect weight for a pen. I never knew that it came from an industrial city in Wisconsin.

But several years before the GM announcement, the Parker plant was closed. It had been sold through a revolving door of foreign buyers, none of whom seemed interested in the heritage of the company or its employees, who were mostly women.

I myself, can’t remember where I left my Parker ballpoint. I can only imagine it is still in that classy box that I loved so much.

Goldstein also looks at the fraying social fabric of Janesville as its economic fortunes nosedived. Poverty, opioid abuse and homelessness rises. Teachers have to help kids who don’t have enough food to eat. And some children are forced to enroll in the one school where, under Wisconsin law, students are allowed to work during term time.

By bringing these stories to life, Goldstein forces us to think about the people behind the statistics. It is so easy to ignore the fact that people have lives and there are complex driving forces that can easily get lost when only looking at abstract numbers. I have been guilty of that in my earlier life. As I said, I I was in charge of job retraining grants in Singapore for some time. While the percentage of workers who did not complete their retraining was very low, I am ashamed to say that many times the picture I had of someone who did not complete their training was of a lazy worker who should have just gotten their priorities right. The book Janesville showed that there is so much more to this picture. And that politicians or civil servants must bear in mind the very human impact of their policies.

Speaking of politics, Goldstein’s book is quietly scathing about the lack of impact that politicians from both parties have had. The city of Janesville is let down time and time again by the empty promises of politicians such as President Obama, Congressman and later Speaker of the House, Paul Ryan and the new Wisconsin Governor Scott Walker. While politicians engage in partisan point-scoring, cities like Janesville are left on their own to manage as best as they can.

I was surprised though to see that Goldstein made the point that what’s happened to Janesville did not fit into the accepted wisdom about the rise of President Trump. When I started reading this book, I thought there was a straight line between the collapse of the working-class in white middle America, opioid abuse, partisan politics, the abandonment by the government in far-away DC, and the rise in support for Trump. But Goldstein points out that while Wisconsin turned Republican recently, Janesville is still a Democrat stronghold, albeit less so now. I was surprised to learn that Janesville did not even vote for the Romney-Ryan presidential ticket in 2012 even though Paul Ryan had grown up there. It just goes to show how little I understand about American politics.

By the time the book was published in 2017, the city of Janesville had recovered economically. Or at least if you look at the unemployment rate which had gone down from a high of 13% to 4%. Companies were opening distribution centres and a promising medtech company had set up its headquarters in Janesville while awaiting approval to build a factory. But many of the new jobs paid a fraction of what the GM’ers had been earning. And with the diminished strength of the unions, each job was far less secure than what GM had offered. The book offers no answers to this dilemma, nor was it supposed to. Ultimately, it is the responsibility of business, government and workers to figure out a new social compact to ensure that people can still enjoy that American Dream.

<Cue Harp Music> For every book I introduce, I have this segment called the author question. One question that I could ask the author. And my question to Amy Goldstein is whether, going into the Presidential elections, any politician has a plan for cities like Janesville that are facing a choice between high unemployment or low wages. I will tweet this question to Goldstein and I will let you know if she replies.

That’s all for this episode of the Book Judge. You can subscribe to this podcast through Apple Podcasts or Spotify or wherever you get your podcasts. While you are there, leave a rating. It helps others discover this show.

If you have comments, you can tweet me @ConradChua16, or DM me on Instagram. I am chuakh there.

Till next time this is your Book Judge, Conrad Chua

Show notes

Chapter mark :- Where I find out an icon of my childhood was also manufactured in Janesville

Chapter mark :- Going into the 2020 Presidential elections, does any politician has a plan for cities like Janesville that are facing a choice between high unemployment or low wages?

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I thought there was a straight line between the collapse of the working-class in white middle America, opioid abuse, partisan politics, the abandonment by the government in far-away DC, and the rise in support for Trump. This book disproves that and shows the incredible sacrifices that middle America has had to make. These people deserve respect and empathy, not politician disdain or exploitation.

Facebook Group :- One of my prized possessions from my youth was a Parker ballpoint pen, placed in a beautiful box. I didn’t know any better and loved that faux velvet inner lining. And until I read this book I had no idea Parker Pens started in Janesville, an industrial town in Wisconsin. But like the GM auto plant, Parker Pens closed its factory and the economic core of the town was ripped out.

The book Janesville talks about how the town had to rebuild. It isn’t a glorious story, no happy endings but a must read for anyone who makes business and political decisions.

Twitter _ @goldsteinamy

The Book Judge

Janesville by Amy Goldstein

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