Today is a sad day for St. Louis, especially the Hazelwood city in the north county. As expected Ford Motor Company announced the closing of Hazelwood assembly plant, see an article from stltoday here. This will eliminate 1900 mostly well paid blue collar jobs. I think the workers there should earn USD 60,000 a year – in other words, one worker can raise a family of 4 comfortably. In recent years St. Louis area has seen the leaving of SBC (now AT&T) headquarter, the decline of TWA and McDonald Dougless (MD) and their subsequent sales to American Airline and Boeing, repectively. Ironically, MD was also located in Hazelwood area. The policians are still trying to lobby the Ford and keep the plant. But in my humble opinion the chance is very slim. This is not the first time the Hazelwood plant facing closing. They dodged last bullet by lobbying Ford and offering tax incentives. But not this time. The soaring oil price and changing of consumer taste dramatically reduced the sales of Ford Explorer SUV, which is the main product of Hazelwood plant.
This reminded me a discussion I had with a friend couple weeks ago. He said the current American life style, such as living in suburban areas, everyone driving a car to work (some drive gas-thirsty SUVs), spend all the money they earn, the goverment borrowing money from Asian countries…can not sustain. I recalled another friend told me he knows a professor who spent USD 600 a month for the gas (heat) because she has a big house. If my math is right, I think that’s about 4 times a migrant worker’ monthly pay in China.
A little off the topic. I understand it’s a painful thing for the UAW (united auto workers) to let go their jobs. The question is will St. Louis continue the slide? Or is St. Louis in declining? This is not an easy question for an economist; me neither. I have been in St. Louis for more than 5 years. Although I have heard those bad news from time to time, I did see more Chinese immigrants and businesses. I also saw the growth of healthcare and biotech industry. The Panera Bread (St. Louis Bread Company). The new metro-link. The new ball park. The new downtown. I guess that’s the strength of US economy, diversified, resilient, market driven…I believe St. Louis will recover from this loss, just like Cardinals and Rams lost a few important games this year, let it be the past…we will recover and become even stronger tomorrow.