The bailout of the General Motors and Chrysler in 2009 was, and remains, a highly controversial move by Presidents Bush and Obama. The utterly surprising thing is how controversial it remains in the state that benefited the most: Michigan.
Two and half years ago when the government rescue of the two automakers was being debated and voted on, just 52 percent of Michiganders said in a poll reported by U.S. News and World Report that they favored the government bailout. Today, the rate of approval is about the same.
Seriously? Only half approve even after tens of thousands of jobs have come back, profits are high, and taxpayers are being paid back. At the recent Los Angeles Auto Show, I asked GM President Mark Reuss, who was born and raised in Michigan and has lived his life with GM, first as the son of former GM President Lloyd Reuss and then in his own career, why he thought the divide remained. "I think people have become fiercely polarized on issues of the proper role of government," he said. And in Michigan, Reuss added, "The state has always been a little divided between GM and Ford, right?"
Could that really have something to do with the divide? The fact that Ford did not require a bailout? For those Ford fans who may be looking down their noses at GM and Chrysler, consider that Ford management was 100 percent in favor of the bailout of its rivals, and that the company would have gladly been on the bailout line too if CEO Alan Mulally hadn't been so prescient when he recapitalized the company in 2006 and 2007, before the meltdown.
I can accept people being divided about President Obama. Everyone is entitled to their vote and opinion. But it seems to me that President Obama deserves far more credit for taking a nationally unpopular position for the betterment of the state. But it's even more than that. It's far beyond the issue of helping one state, or credit for one president.
The cynics will say that Obama saved GM and Chrysler thinking that it would secure Michigan in next year's election. Maybe that factored in; who can say? But jobs are jobs. Michigan lost 83,000 auto jobs 1993 and 2008. Even though GM and Chrysler were forced to downsize, about 60 percent of the Detroit Three's current U.S. employment is in Michigan, according to the Center for Auto Resarch, which forecasts that by 2015, 67 percent of the Big Three's employment will be in the state. Some 43,000 jobs will have come back in the auto sector through next year. That's not nothing in a state that has been downsizing for years and embodies the worst ideas of the "rust-belt." If not for the save of GM and Chrysler, I shudder to think what the unemployment rate would be today. Already teetering on the edge, Detroit would surely be bracing for what would be left of GM to move elsewhere. That would have finished the city.
I hear a lot from Republican White House hopefuls like Michigan native Mitt Romney about it being wrong for the government to pick "winners and losers." But I think the U.S. is proving to be the big winner -- not just Michigan, and not just the auto companies.
When I travel around the world, I see a lot of products and brands from different countries. Burberry of England. Gucci of Italy. Dom Perignon of France. Mercedes-Benz and BMW of Germany. The brands are synonymous with their countries. Certain brands are iconic representations of the countries they come from no matter where the actual manufacturing takes place.
Cadillac, Chevy, Ford and Jeep are all iconic U.S. brands. They are, in fact, brand ambassadors. Though the brands have all had their dark periods for quality, they represent and symbolize the success, prosperity and freedom to succeed that has made people aspire to come to America for centuries. And by the way, in case the naysayers hadn't noticed yet, those dark years of quality issues are behind the companies. Pound for pound, there isn't much daylight between Chevy and Ford and Toyota and Honda, give or take some flare-ups on the in-car telematics gadgetry that nobody does all that well yet.
Am I sounding corny in this age of a global economy? Yes. I am meaning to sound that way. Cars and pickup trucks aren't packs of cigarettes, toothpaste, computer call centers, computer paper or website server farms. Cars and trucks are practical and symbolic products of freedom and success, and these brands mean something to American prestige around the world. A Chevy or Ford being sold in India, Brazil or Australia carries a U.S. passport. Why are the Swedes so protective of Volvo and Saab? Because they know they are the most visible Swedish exports anywhere in the world.
Sure, let's hear now from the people who wouldn't be caught dead in a GM, Ford or Chrysler product. Let's hear about how Toyota, Honda, Nissan, BMW, Hyundai, Mercedes and VW all make vehicles in the U.S. now. Let's hear about how there is no such thing as an American car anymore when the U.S.-made Toyota Camry has more U.S. content than the Mexican-made Ford Fusion.
Except, all that stuff is a sideshow. There is a U.S. auto industry. And it is in GM and Ford. Chrysler, by virtue of its Fiat ownership, has undeniably jumped to being a foreign-owned company. But let's not forget that the Chrysler jobs here in Michigan and Ohio are still very important, and that Fiat has already paid back all the money it owed the feds. Chrysler is owned by the Italians, but its brands still function as American icons.
When using the auto bailout in this coming year's political theater, it's worth remembering that part of the role of the president, any president, is to act in the best interests of the U.S. The auto bailout started with President Bush when he green-lighted loans to GM and Chrysler, and it continued with President Obama when he approved loans and government equity stakes for GM and Chrysler to keep them from liquidating.
More than 60 percent of Americans were against the taxpayer bailout. Funny how that percentage was about the same as the share of foreign brand-buyers. In other words, people who weren't buying GM, Ford and Chrysler vehicles saw no point in saving those companies.
Presidents don't don't have the luxury of deciding such things purely on the basis of how it affects them politically. They have to act and decide based on what they think is best for the country -- the whole country. And for that, for the jobs Michigan has saved, for keeping the city of Detroit from slipping into the Detroit River by headquartering GM downtown, I think the percentage of those in Michigan who approve of the bailouts should go up -- if people have a conscience.
If the naysayers can step back from the noise of right-wing bloviation, and misguided and emotionally defined characterizations of "socialist" economic policy, and consider what is actually best for the state of Michigan, acceptance and support of the auto bailout will go up. And then you can vote for whomever you want.
Grand Blvd. is a weekly column about the intersection of the auto industry, culture and politics from David Kiley. For more of his writing, and everything about cars, head over to AOL Autos.
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