THE BLOG
10/23/2008 05:12 am ET Updated May 25, 2011

Suddenly Obama's Auto-Policies Matter: Michigan Is The New Florida

"If he carries Michigan, many routes to victory are open for Barack Obama. Without Michigan, he's got a big problem," said Washington Post columnist E. J. Dionne Jr. "Michigan could be to this election what Ohio was in 2004 and Florida was in 2000."

What should Obama understand about Michigan? People here are suffering. They've lived with a deep economic recession much longer than the rest of the nation. And now they are demanding attention, and looking for the candidate with the best answers and solutions. Traditional party lines have evaporated -- which makes Michigan the ultimate swing state.

Obama must understand also that as goes the automotive industry, so goes Michigan. How do voters feel about the candidates' auto-related policies? OffTheBus asked Peter M. De Lorenzo, author of The United States of Toyota and founder of Auto Extremist, the Internet magazine devoted to news and analysis of the car biz. For nearly a decade De Lorenzo has been a"must read" for policy makers looking for the unvarnished, high-octane truth.

You often say, "It's clear Americans don't care about Michigan." Why should we?

Peter M. De Lorenzo: The Detroit automakers are either directly or indirectly responsible for at least 1 in 14 jobs in the U.S. If people in this country don't think a bankruptcy at one or more of the Detroit manufacturers won't affect them -- no matter where they live -- they're sadly mistaken. On top of that, the continuing erosion of our manufacturing base in this country has reached the crisis stage. We cannot exist simply as a Starbucks Nation of mindless consumers. If we lose the ability to manufacture hard goods in this country, then I fear for our long-term future as a nation.

Detroit automakers have been "crying wolf" for the past five years -- saying they're "12 months away from going out of business." How long do they really have?

I can tell you that the situation is precarious. There is no crying wolf, not by any stretch of the imagination. Chrysler will not survive past 2009 no matter what, because Cerberus Capital Management simply bit off more than they could chew. GM and Ford have eighteen months -- tops -- if they don't get things rolling again.

What's your perspective on the short-term government loans that are part of the debate? If the U.S. government offers some kind of bailout, will auto executives get it right this time? Their track record isn't very good.

First of all they are loans, not a bailout. Without access to money at more favorable interest rates one of these companies will fail. And the country can't afford that. Will the manufacturers get it right this time? Yes. As a matter of fact, they have been doing things right for several years now, but are finding it almost impossible to gain the consumers' consideration -- at least in America -- due to past transgressions.

For years the domestic automakers have fended off more stringent fuel economy standards. In retrospect, did it do more harm than good?

The CAFE system was a flawed program from the very beginning. It was unrealistic, reactionary, and it actually prevented the domestic manufacturers from developing long-term solutions and technologies. Higher gasoline prices have made more of a difference in our nation's fleet of vehicles in the last six months than any CAFE standard ever did.

What happens if Detroit retools, then oil prices drop like they did after the oil shocks of the 70s? Would Americans return to their gas-guzzlers?

It won't happen, on either count. The era of cheap energy is over for America and we'll never be able to go back. Sure, Americans will still need a diverse line-up of vehicles including trucks because, believe it or not, people still do real work in this country and they're going to need real workhorse vehicles to get that work done. But faddish embracing of SUVs and urban cowboy pickups? Those days are long gone, never to return.

What is your perspective on John McCain's proposed $300 million prize to the auto company that develops a next-generation battery?

It is a monumental waste of time and total campaign B.S. because $300 million won't buy squat in that arena. McCain and his handlers are clueless and amateurish when it comes to the auto industry. Just showing up at a plant saying he "cares" about the auto biz doesn't mean he "gets" it. Far from it, in fact.

McCain also pledged a $5000 tax credit for zero-emission vehicles, with less money for reduced emitters like plug-in hybrids. Obama proposes a $7000 credit for advanced-technology vehicles, plug-ins included. Who has the better plan?

Let's be frank here. Michigan is a key swing state right now, but what these candidates are saying to get elected has exactly zero to do with what they'll do once they get to the White House. Any sort of cash incentive to get manufacturers to build more efficient vehicles -- and to get people to buy more of them -- is an admirable thing. But let's not forget that if people just make smarter choices (like they've been doing lately), this nation's energy usage will go down dramatically. So who has a better plan at this point? It's hard to tell. The fog of the campaign is masking real ideas.

Obama wants to accelerate the commercialization of plug-in hybrids. What is your perspective on this?

The guy has great speech writers who know how to turn a phrase, but I don't believe they have a clue what the hell they're talking about. People will buy cars that meet their needs for dependability and efficiency. But don't ever forget that people also want to drive cool, desirable cars -- and the presidential candidates are not qualified to figure out what that means.

What are you hearing about the election behind closed doors?

The top auto executives are focused on just one thing: S-U-R-V-I-V-A-L. People outside this business have no idea just how precarious it is for these automakers right now. They're running 24/7 trying to make it work. It is grim. The loans will help a great deal, but these executives don't see a clear winner between McCain and Obama. They know the difference between campaign rhetoric and actual understanding of the issues.

Michigan is being called "the ultimate swing state" because voters blame both parties. What's your perspective?

Michigan has been in a recession for three years now. We're teetering on a full-blown depression. People in the rest of the country don't care -- and we get that -- but it's the harsh reality. As for the candidates, the voters here are disillusioned and beyond cynical. They look at McCain and Obama as having to choose between the lesser of two evils. Optimism left town a long time ago around here.

Which candidate is better for Michigan?

At this point the jury is still out. How they react once the loan money is in place will be telling. Right now, Obama seems to "get it" slightly more than McCain, but no one's lighting up the "I Get It!" meter. Detroit is the canary in the coal mine for America's manufacturing base, and until I hear one of the candidates say that, then they're both mired on Clueless Island in my book.

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Michigan has chosen the Democratic presidential candidate in the last four elections, and Barack Obama needs to extend that streak. In a poll conducted on Sept. 20 for The Detroit News and television stations WXYZ, WILX, WOOD and WJRT, Obama leads by 1 percentage point over John McCain in Michigan. A recent CNN/Time/Opinion Research Corp. poll reports the race is a dead heat.

McCain leads by 14 percentage points among whites in the Great Lakes State. The Republican also has an 18-point lead in the Detroit suburbs -- surprising since they split about evenly between Bush and Kerry in 2004. A recent AP-Yahoo News poll finds that the percentage of voters who may turn away from Obama because of his race could easily be larger than the final difference between the candidates in 2004 -- about 2.5 percentage points.

Rasmussen Reports, in partnership with Fox Television Stations, found that Obama has an eight-point lead among Michigan women while the candidates are essentially even among men. McCain leads handily among regular church goers while Obama has the edge among those who rarely or never attend services. As for the running mates, 53 percent have a favorable opinion of Sarah Palin while 52 percent say the same about Joe Biden.

Michigan's working families are hurting: the August unemployment rate again led the nation at 8.9 percent. These people are crying for change. Which candidate is listening? It's important, because as Michigan turns - so goes the election.

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Candidates Voting Record On Auto Industry-Related Issues:
Clean Energy Achievement Criteria (2007): McCain - no vote; Obama - Yes
Preventing Petroleum Export Organizations (NOPEC Act of 2007): McCain - no vote; Obama - Yes
Reduction in Dependence on Foreign Oil (2005): McCain - No, Obama - Yes
Arctic National Wildlife Refuge (No) Drilling Amendment (2005): McCain - Yes, Obama - Yes


This week OffTheBus is publishing a variety of stories that cover the policy differences between Senators John McCain and Barack Obama. If you have a policy expertise and would like to participate, please see Calling All Policy Gurus.