Goverment aid for auto industry?

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Hillary, Granholm join political push to aid auto industry

By Daniel Howes / The Detroit News
Daniel Howes

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The political free-for-all to "save" Detroit's automakers is under way. Guess who's the first heavy-hitter to take Motown's case to the White House?

Not Gov. Jennifer Granholm.

Not Sens. Carl Levin or Debbie Stabenow.

Not legendary Rep. John Dingell, Big Auto's fiercest defender on Capitol Hill.

It's Sen. Hillary Rodham Clinton, D-N.Y., who beat Granholm & Co. to the punch late last week and asked President Bush to convene a "National Auto Manufacturing Summit." In a letter, the woman who would be president asked Bush to focus his attention on the "enormous legacy costs, including paying the health care and pensions of retirees.

Seeking solutions

"The economic consequences of the government's failure to address these matters will be severe," wrote Clinton, whose state stands to lose thousands of jobs if bankrupt Delphi Corp. closes plants in New York.

"A summit where everything can be put on the table, including legacy costs like health care and pensions, fuel efficiency, foreign competition and trade, could yield beneficial results and solutions for our auto industry."

Granholm didn't know of Clinton's letter before it was made public. But she plans to say much the same thing in a letter scheduled to be sent Monday to each member of Michigan's congressional delegation.

Her message to Democrats and Republicans: Get the Detroit-based auto industry's deepening troubles on the White House agenda -- soon.

"We need to make the business climate more competitive for manufacturing," said Liz Boyd, Granholm's spokeswoman. " I don't think anyone is looking for a bailout. They're looking for level playing fields."

Take a deeper look

Backing Granholm are the most influential voices in Detroit -- the bosses of GM, Ford and Chrysler, the president of the United Auto Workers and Delphi Chairman Steve Miller, whose decision to file bankruptcy two weeks ago plunged the industry into a fit of doubt, recrimination and restructuring.

It's no secret that Republican-controlled Washington is generally disinterested in Detroit's travails, problems it now wants others -- namely, the American taxpayers -- to solve.

That's politics. But ask this: Does the scale of a potential failure of Detroit -- private health care obligations that become public ones, pension liabilities dumped on a government agency, the disappearance of American-controlled industry -- warrant a deeper look?

It should. The truth is that Detroit's foreign competitors get far more "help" from their governments than Detroit does, starting with health care. Over time, that matters.

Is such intervention distasteful to economic Darwinists? Sure. Is it anti-competitive and just more failed industrial welfare? Arguably. Should the market -- not government -- declare winners and losers? Ideally, yes.

But this isn't an ideal world.

Daniel Howes' column appears Sundays, Wednesdays and Fridays. He can be reached at (313) 222-2106 or [email protected].

[Northstar]

That's a very positive sign. The problem is I don't think Bush has shown much interest in helping out the auto industry, but maybe if he gets a lot of increased pressure then he'll do something.

[CaddyXLR-V]

I agree with it. I'm all for capitalism, and free trade, but I dont think being part of a countries economy for the past 100 years should actually put them at a disadvantage. Japanese companies are actually subsidized by the yen manipulation, so why cant our government restore fair trade? If the Japanese companies are so good, and only the strongest survive, then why the yen manipulation, and why tax our vehicles in Japan? Helping our companies would actually promote competition, because the Japanese companies can actually get lazy, and still not have to ever worry about profits. The only thing this would do is restore the balance. But I'm sure the media will spin it another way.

[shayes287]

bad move, the government should not step in and act as crutch to the failing auto industry, these companies need to clean up their acts and become more efficient, if the American car companies were forced to make more reliable cars that the public wanted that would be better for everyone even if that means that certain brands or whole companies disappear, it might hurt in the short run but in the long run its better to let natural selection run its course rather than waste money that could be better spent or not spent at all on prolonging the inevitable

[balthazar]

The Idealist's time has past. Airy concepts of 'natural selection' don't accomplish a damned thing. Inactivity in this case allows a travesty to possibly occur. Wake up. This is not unlike the religious zealot who watches his neighbor's house burn to the ground because it's Sunday and he doesn't believe in using the phone.

[Shantanu]

The government needs to break the UAW into 4 or 5 different unions. They control 100% of the supply of auto labor that's faced by American manufacturers. How is that not a candidate for anti-trust laws?

[shayes287]

there is nothing wrong with helping out an industry one time when it is down but a second then a third when does it stop, just like the house burning next door sure i would pick up the phone and call the first time and i would likely do it the second time but the third and the forth no way something is not right....same with the auto industry it needs to become more efficient and it needs to get rid of the labor unions because they are sucking them dry

[Fiero88]

there is nothing wrong with helping out an industry one time when it is down but a second then a third when does it stop, just like the house burning next door sure i would pick up the phone and call the first time and i would likely do it the second time but the third and the forth no way something is not right....same with the auto industry it needs to become more efficient and it needs to get rid of the labor unions because they are sucking them dry

[post="33082"]<{POST_SNAPBACK}>[/post]

suck, suck, suck, tic/toc tic/toc.... where's my parachute da#n it's not gold.... oh well jump anyway the taxpayer will have to take care of me...

[CARBIZ]

Shayes, bad example. If the house next door was burning 230 times, you would pick up the phone because it could bloody well burn your house down with it! However inadvertantly, I think your metaphor works well here. If the American auto industry burns down, it may very well take YOUR house with it. This thread has been batted around here on C&G, as well as in the media. Japan Inc. does not play fair, plain and simple. If true, committed economic Darwinists want to see the American auto industry fail because they DESERVE to, perhaps they are right; however, I take the view that it is more of a failure of the American system of Too Open Markets. Toyota, Honda and the rest do not have to deal with VW, GM, Ford or Fiat in their own back yard. The Ministry of INdustry and Trade has seen to that. To draw on another analogy, one of the main reasons Fortress America was able to kick Hitler's ass was because their manufacturing base at home was unmolested while they were able to harass and destroy Hitler's. Much the same is happening with the auto industry at present day. Protected and coddled at home, Japan INc. is free to wage economic war around the world, and even end up looking like the good guys! I am not staying Toyota, Honda, etc. don't make good products. I am not saying that GM hasn't made any mistakes. But I am saying that Japan doesn't play fair. It never has. The so-called legacy costs that the Big Three must bare the brunt of are something that Toyota, etc. don't have to face. I don't think I am playing too heavy a hand by saying that if GM and Ford go down this time, it will be as much of an indictment of the American System as it would be the mistakes of Detroit's board rooms. If Washington doesn't wake up to the protectionist actions of Japan Inc., it will be too late. Or maybe it already is because Japan owns a big chunk of American Treasury bills. Something else Washington has sat idly by and allowed to happen.

[Guest Josh]

Granholm is jumping on this while she's busy laying in bed with the Japenese automakers? ARE YOU KIDDING ME? I'm a Dem through and throught (as I've said on here) however I will NOT support this dumb, idiotic politician in her little pitty games to gain popularity. Jennifer...you've failed us. Now, leave as you must. On the other hand. I love the thought of Hillary running. I know half a state (if not more) that would support her. Lets go Hillary.

[Dsuupr]

Something to things to think about. 1. Loosing more jobs means looksing more tax income, while paying out more unemployment. 2. Loosing more jobs means less money to eductate our children. 3. Everytime we purchase more Japanese products we add to our deficit to them. The solution; Everytime someone purchases a foreign made car that was made in a country we have a deficit too, we ad a tax that would help pay back the deficit. Hmmm, that means adding $25,000 to every toyota & honda sold. Works for me.

[shayes287]

a lot of toyots and hondas are made right here in the usa

[CaddyXLR-V]

a lot of toyots and hondas are made right here in the usa

[post="33399"]<{POST_SNAPBACK}>[/post]

Assembled. Their average NA parts content is still less than half of the Big 3 NA content. Therefore, the Big 3 affect many many more jobs than Toyota or Honda do. Edited October 24, 2005 by CaddyXLR-V

[razoredge]

Assembled. Their average NA parts content is still less than half of the Big 3 NA content. Therefore, the Big 3 affect many many more jobs than Toyota or Honda do.

[post="33424"]<{POST_SNAPBACK}>[/post]

This is such a problem. Everyone now wants to think your supporting American economy with imports but its really a smoke screen. Just a little.

So now what are we to think when our own "Domestic" are all, partly, mostly, manufactured elsewhere ?

No matter where I turn all I seem to come up with is elsewhere.

[razoredge]

As for government aid ? Well , handing out money ? After you have shoved "globaligation" down our throats, fulling knowing that it would destroy American industries, American jobs and pension funds ? Now is this supposed to get someone a vote or something ? Somehow it just reeks of "whats your angle". I always forgive someone for a good screwing so long as they pretent to make it up afterwords dont ya'll ? Can we just go back to page one and have a reval please ?

[CaddyXLR-V]

This is such a problem. Everyone now wants to think your supporting American economy with imports but its really a smoke screen. Just a little.

So now what are we to think when our own "Domestic" are all, partly, mostly,  manufactured elsewhere ?

No matter where I turn all I seem to come up with is elsewhere.

[post="33575"]<{POST_SNAPBACK}>[/post]

We should think:
That they are trying to stay alive since people stopped buying them as soon as Toyota and Honda started assembling cars here, since the Japanese carmakers have a one way street of fair trade.

[razoredge]

We should think:
That they are trying to stay alive since people stopped buying them as soon as Toyota and Honda started assembling cars here, since the Japanese carmakers have a one way street of fair trade.

[post="33662"]<{POST_SNAPBACK}>[/post]

Well I got news for you, theres no sence in saveing an American company if its not American. Whats the point ? At that time might just as well go buy a Toyota. General Motors or Ford will be nothing more than a faceless nameplate at that time. Today we can see the faces of our fellow American and Canadian workers.