Bob King, the President of the United Auto Workers, and Jim Tetreault, the Vice-President of Ford for North American Manufacturing, joined me at a Friday Forum at the Cleveland City Club to tell how a collaborative process involving Ford, the UAW, communities, and the government helped rescue the American auto industry. (Click to hear the podcast)
It's a success story. If the auto industry had gone down, the number of jobs lost in the Great Recession would at least have doubled - making it worse than the Depression. And at one point the public opposed the federal intervention that was essential to save GM and Chrysler by a margin of 3-1- which unlike Ford had lacked the foresight to establish adequate lines of credit for the storm that was coming. So did many of our leaders - most notably Mitt Romney, with his famous New York Times op-ed, "Let Detroit Go Bankrupt." So even though the forum is non-political, the issues it raises unavoidably resonate in the broader context of this election year - and I think shed some light.
Romney's op-ed looks even more revealing in the light of last week's Boca Raton tapes revealing a harsh hostility to "the 47%" and suggesting that it is Mitt the Massachusetts moderate who may have been an act, and Mitt the bleak Social Darwinist the real thing. Because what Romney said about the bail-out, unequivocally and in precise detail, was that a collaborative solution to the auto industry crisis was impossible.
"Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course -- the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check."
These words are eerily reminiscent of the infamous advice that Treasury Secretary Mellon gave President Hoover: "Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate."
Hoover - sort of - followed Mellon's advice. Roosevelt's New Deal followed. Obama didn't - in the face of public opposition he kept GM and Chrysler going, maintaining the auto supply chain that Ford required as well. So Romney's wisdom as a CEO seeking to be Job Creator in Chief has been tested - and found wanting.
With the bailout, the Big Three did precisely what Romney said they could not. They changed course - as Tetreault and King make clear here in Cleveland. They changed; they negotiated their way out of their retiree burdens, jumped into the technological lead, started regaining market share, embraced fuel efficiency and are rebuilding jobs, shifts and factories.
But they changed because there was trust and transparency - something Romney's version of predatory capitalism values not at all - or we would have seen his tax returns. Romney's version of private equity posits that only a hostile "turn-around" can rescue an industry in crisis - it values only fear, not trust. But that's not what turned Detroit around. The auto industry changed because it faced a crisis, yes, but also because it discovered that it had a reliable, predictable partner in the American people, as expressed in the investment the Obama Administration made. And it changed because its leaders - people like Tetreault and Bob King - liked each other, trusted each other, and took risks with each other. (The three of us on stage are an unlikely trio. Tetreault , who started out as an environmental clean-up specialist keeping auto plant wastes out of rivers, graciously deflects efforts to draw him into politics - "I'm working with everyone." -but he notes that Bob is not as apolitical. King, as I discovered on a trip to Tokyo trying to rescue the NUMI plant in California, is the rare industrial union president who is a vegetarian. And I'm here because we can't outsource the creation of a sustainable America. Without the restoration of "America the Maker" our ecological future is grim.)
Roosevelt would have understood. Romney, it appears, does not.
And neither do Romney's political allies. Because simultaneous with this marvelous American manufacturing success story around the auto industry a grimmer story of loss is unfolding. In 2005, as the US wind industry took off, only 25% of the content of a wind turbine was Made in America. By 2011 domestic content was up to 60% -- a rate of import displacement unequalled by any other American industry. And the overall growth rate of wind manufacturing in the US was, as far as I can tell, faster any other industry. By last year more Americans worked for the wind industry than mined coal. But for the past four months, the wind industry's domestic manufacturing success story has been turned into a nightmare, as plant after plant shuts down, with thousands of jobs being eliminated.
Some of this is the result of broad economic forces - competition from cheap and underutilized natural gas power plants for electricity for example. But a huge negative factor is the uncertainty surrounding America's vision of where wind fits into our electricity future - uncertainly amply bankrolled by oil and coal competitors seeking to drive wind from the marketplace, and led by Charles and David Koch, who are the biggest single shareholders in the enterprise that has become Romney, Inc.
One of the major uncertainties is the tax treatment of wind electricity - the current rules expire at the end of this year. So customers are delaying contracts, because they don't know what the rules will be. Congress knows this. Most wind manufacturing takes place in Republican states like Iowa. Setting predictable tax rules for wind is one of the few proposals to get bipartisan support in this Congress.
But Congress didn't vote on the ground-rules for wind before it went home, even though it knew that thousands of workers were being laid off because its failure. It didn't act even though Senators like Mark Udall took the Senator floor every day to plea for action. And it didn't because the Republican Congressional leadership deferred to Mitt Romney, who decided to oppose tax certainty for wind, holding this industry, uniquely, hostage to a resolution of the nation's overall fiscal crisis. (Note that Romney's chief energy advisor , oil man Harold Hamm, has made it crystal clear that holding the oil and gas industry hostage to the deficit is utterly unpatriotic - but wind, well - sure, let it dangle.)
So for the first time in my memory we have a Presidential candidate killing an entire industry, a major industrial success story - perhaps because he is being amply paid by the Koch Brothers to do so, and perhaps also because if wind, like autos, succeeded, America might realize that collaboration and trust put money on the bottom line, and sustain democracy - while liquidation is no more viable than it was ninety years ago.
A veteran leader in the environmental movement, Carl Pope is the former executive director and chairman of the Sierra Club. Mr. Pope is co-author -- along with Paul Rauber -- of Strategic Ignorance: Why the Bush Administration Is Recklessly Destroying a Century of Environmental Progress, which the New York Review of Books called "a splendidly fierce book."