Taking Down the 'No Foreign Cars' Signs in Michigan
03-05-2005, 11:55 AM
#1
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Taking Down the 'No Foreign Cars' Signs in Michigan
March 3, 2005
Taking Down the 'No Foreign Cars' Signs in Michigan
By DANNY HAKIM
ETROIT, March 2 - At many union halls in Michigan, signs on parking lots still warn that foreign-made cars "will be towed away at owner's expense."
So why is Michigan's Democratic governor, Jennifer M. Granholm, pushing so hard to close a sweetheart land deal with Toyota Motor?
The answer: Because the domestic auto industry, the engine of the state's economy in the 20th century, is sputtering in the 21st. With 7 of Michigan's 10 largest employers either domestic automakers or parts suppliers, Michigan's unemployment hit 7.3 percent in December. That tied with Alaska's as worst in the nation, according to the most recent report from the Labor Department; numbers released by Michigan on Wednesday adjusted December's unemployment down to 7.5 percent, but showed some improvement in January.
General Motors and the Ford Motor Company, two of the state's three largest employers, said Tuesday that their sales continued to fall last month. With both company's shares trading near annual lows, they are cutting the number of cars and trucks they plan to produce. G.M.'s production cuts are particularly deep, spreading economic distress across the region. That has left Ms. Granholm little choice but to redouble the efforts to diversify, both beyond cars and towards other carmakers.
"Clearly our fortune has been tied to the Big Three and, if they're declining in market share, then our employment situation declines," said Ms. Granholm in a recent interview. "If we are to succeed we must diversify and diversify in a big way."
That includes wooing Toyota, the company that has taken more business away from the Big Three - G.M., Ford and the Chrysler division of DaimlerChrysler - than any other. Michigan is currently fighting in court to push through a deal to sell public land to Toyota that would allow the company to expand a technical center near the University of Michigan in Ann Arbor. A developer who outbid Toyota by $16 million has sued to block the deal, but courts have sided with the state.
"If we want to further our position as the automotive capital of the world, if we want to have international investment here, whether it's Toyota or Hyundai or Mitsubishi, you name it, the German auto manufacturers, we're going to be aggressive," Ms. Granholm said.
Ms. Granholm, 46, is a Canadian-born governor with a common touch and a knack for managing policy minutia - like a Hillary Clinton with a dollop of Oprah. At a recent speech in Kalamazoo, Mich., she strolled, microphone in hand, through an audience gathered near the entrance to the local chamber of commerce. She was cajoling promises from children to go to college, pitching her plan to turn the state around and cheerleading. "We have a huge inferiority complex," she told the crowd. "We don't want our motto to be 'Michigan, no worse than the rest!' "
Some Democrats think that if efforts to let foreign-born politicians like Arnold Schwarzenegger run for president succeed, Ms. Granholm could make a viable candidate.
First, though, she has to overcome a tremendous challenge on the home front. Two years into her four-year term, her cash-strapped state is being squeezed from all directions.
On Tuesday, G.M. said its February sales fell 12.6 percent and it would produce 10 percent fewer vehicles in the second quarter than a year before. On Wednesday, in a note to investors titled "G.M. Meltdown," a Merrill Lynch analyst, John Casesa, said the company's production cuts put earnings of major domestic suppliers of auto parts "at risk." The two largest American suppliers, the Delphi Corporation and the Visteon Corporation, already have junk bond ratings and are wading through red ink. The Lear Corporation, which makes auto seats and interiors, sharply scaled back its earnings projections on Tuesday. All three suppliers are larger employers in Michigan than Chrysler.
To survive, many suppliers are shifting jobs to countries like China, where a typical parts worker costs less than a tenth of what such a worker in the United States costs. And while Toyota and other foreign automakers are increasingly assembling cars in North America, they are generally either building their plants far to the south in Mexico or in antiunion states like Alabama and Mississippi. Or they are building them to the north. Last year, Ontario became the largest auto-producing state or province on the continent, knocking Michigan from a perch it has held since the dawn of the industry.
As if all that were not bad enough for Michigan, the city of Detroit, a year away from hosting the Super Bowl, is facing such a severe financial crisis that Mayor Kwame M. Kilpatrick recently said there was some risk of the state eventually taking financial control of the city.
What to do? Last month, Ms. Granholm proposed a $2 billion bond to bolster emerging industries, like biotechnology and homeland security, and to encourage automotive innovations, like development of the hydrogen fuel cell.
But facing a projected deficit of $773 million in the state's budget for the fiscal year starting in October, she is also proposing a range of cuts that include arts programs and financial assistance to thousands of private college students. She plans to close three state police posts and a fire investigation unit and wants to overhaul the state's tax code.
"We have cut and cut and yet we still have the unemployment rate we have," she said. Her plan would sharply cut taxes for most businesses, including manufacturers, though Republicans have criticized it because it would offset cuts with tax increases for insurers and the financial services industry.
"Insurance and financial services are segments of the economy that are growing, so does it make sense to raise taxes on those industries to lower them on manufacturing?" said Ken Sikkema, the Republican majority leader of the state Senate, who added that more details of the governor's plan needed to emerge before he could pass judgment.
Speaking generally, he said there was blame to go around. "In the mid to late 90's, four years in a row we were the No. 1 state in the nation for business growth and investment," he said. "The economy was booming and manufacturing was doing well and we continued to get lulled into complacency."
John Engler, a lobbyist who was the state's Republican governor for a dozen years before Ms. Granholm, said, "I think when Michigan's unemployment rate was consistently under the national average and we were consistently adding new plants and investment, that showed we were taking the right steps."
Michigan's economy was chugging along in the middle to late 1990's, but the growth had more to do with the dynamics of the auto industry than government policy. The emergence of the sport utility vehicle and rising sales of big pickups boosted the Big Three's profits but masked fundamental problems. They lagged Japanese carmakers in manufacturing prowess and quality, and years of up-and-down performance had eroded their reputations.
In the last few years, Japanese and European automakers have introduced their own S.U.V.'s and made inroads into the pickup market. Making matters worse, the Big Three have tens of billions of dollars worth of pension and health care obligations for retirees, far more than competitors based in nations with more socialized health care systems.
Michigan has scored some success in attracting foreign investment. Last year, Hyundai, the fast-growing Korean automaker, broke ground on a technical center in the Ann Arbor area. Denso, a supplier partly owned by Toyota, has a large presence in the state. Ms. Granholm plans to visit Japan in the summer as part of a long-shot bid for Toyota's seventh assembly plant in North America. Her aggressive pursuit of the company has been noticed.
"We would be open to Michigan," said Dennis Cuneo, senior vice president of Toyota North America. "If you had asked me that question 10 years ago, I would have answered very doubtfully, but in the past year we have sensed a change in atmosphere. Governor Granholm has been very aggressive in courting Toyota."
And what do the Big Three think?
"This is in the tradition of America," said James J. Padilla, the president and chief operating officer of Ford. "We open our doors and make things open and accessible. My only concern is that I wish everywhere in the world we went we got the same reception."
Jennifer Granholm: pragmatic, and seems to have a clue, she's from Canada - who'd a thunk a liberal canuck would be my favorite dem - eh.
http://www.nytimes.com/2005/03/03/bu...rint&position=
Taking Down the 'No Foreign Cars' Signs in Michigan
By DANNY HAKIM
ETROIT, March 2 - At many union halls in Michigan, signs on parking lots still warn that foreign-made cars "will be towed away at owner's expense."
So why is Michigan's Democratic governor, Jennifer M. Granholm, pushing so hard to close a sweetheart land deal with Toyota Motor?
The answer: Because the domestic auto industry, the engine of the state's economy in the 20th century, is sputtering in the 21st. With 7 of Michigan's 10 largest employers either domestic automakers or parts suppliers, Michigan's unemployment hit 7.3 percent in December. That tied with Alaska's as worst in the nation, according to the most recent report from the Labor Department; numbers released by Michigan on Wednesday adjusted December's unemployment down to 7.5 percent, but showed some improvement in January.
General Motors and the Ford Motor Company, two of the state's three largest employers, said Tuesday that their sales continued to fall last month. With both company's shares trading near annual lows, they are cutting the number of cars and trucks they plan to produce. G.M.'s production cuts are particularly deep, spreading economic distress across the region. That has left Ms. Granholm little choice but to redouble the efforts to diversify, both beyond cars and towards other carmakers.
"Clearly our fortune has been tied to the Big Three and, if they're declining in market share, then our employment situation declines," said Ms. Granholm in a recent interview. "If we are to succeed we must diversify and diversify in a big way."
That includes wooing Toyota, the company that has taken more business away from the Big Three - G.M., Ford and the Chrysler division of DaimlerChrysler - than any other. Michigan is currently fighting in court to push through a deal to sell public land to Toyota that would allow the company to expand a technical center near the University of Michigan in Ann Arbor. A developer who outbid Toyota by $16 million has sued to block the deal, but courts have sided with the state.
"If we want to further our position as the automotive capital of the world, if we want to have international investment here, whether it's Toyota or Hyundai or Mitsubishi, you name it, the German auto manufacturers, we're going to be aggressive," Ms. Granholm said.
Ms. Granholm, 46, is a Canadian-born governor with a common touch and a knack for managing policy minutia - like a Hillary Clinton with a dollop of Oprah. At a recent speech in Kalamazoo, Mich., she strolled, microphone in hand, through an audience gathered near the entrance to the local chamber of commerce. She was cajoling promises from children to go to college, pitching her plan to turn the state around and cheerleading. "We have a huge inferiority complex," she told the crowd. "We don't want our motto to be 'Michigan, no worse than the rest!' "
Some Democrats think that if efforts to let foreign-born politicians like Arnold Schwarzenegger run for president succeed, Ms. Granholm could make a viable candidate.
First, though, she has to overcome a tremendous challenge on the home front. Two years into her four-year term, her cash-strapped state is being squeezed from all directions.
On Tuesday, G.M. said its February sales fell 12.6 percent and it would produce 10 percent fewer vehicles in the second quarter than a year before. On Wednesday, in a note to investors titled "G.M. Meltdown," a Merrill Lynch analyst, John Casesa, said the company's production cuts put earnings of major domestic suppliers of auto parts "at risk." The two largest American suppliers, the Delphi Corporation and the Visteon Corporation, already have junk bond ratings and are wading through red ink. The Lear Corporation, which makes auto seats and interiors, sharply scaled back its earnings projections on Tuesday. All three suppliers are larger employers in Michigan than Chrysler.
To survive, many suppliers are shifting jobs to countries like China, where a typical parts worker costs less than a tenth of what such a worker in the United States costs. And while Toyota and other foreign automakers are increasingly assembling cars in North America, they are generally either building their plants far to the south in Mexico or in antiunion states like Alabama and Mississippi. Or they are building them to the north. Last year, Ontario became the largest auto-producing state or province on the continent, knocking Michigan from a perch it has held since the dawn of the industry.
As if all that were not bad enough for Michigan, the city of Detroit, a year away from hosting the Super Bowl, is facing such a severe financial crisis that Mayor Kwame M. Kilpatrick recently said there was some risk of the state eventually taking financial control of the city.
What to do? Last month, Ms. Granholm proposed a $2 billion bond to bolster emerging industries, like biotechnology and homeland security, and to encourage automotive innovations, like development of the hydrogen fuel cell.
But facing a projected deficit of $773 million in the state's budget for the fiscal year starting in October, she is also proposing a range of cuts that include arts programs and financial assistance to thousands of private college students. She plans to close three state police posts and a fire investigation unit and wants to overhaul the state's tax code.
"We have cut and cut and yet we still have the unemployment rate we have," she said. Her plan would sharply cut taxes for most businesses, including manufacturers, though Republicans have criticized it because it would offset cuts with tax increases for insurers and the financial services industry.
"Insurance and financial services are segments of the economy that are growing, so does it make sense to raise taxes on those industries to lower them on manufacturing?" said Ken Sikkema, the Republican majority leader of the state Senate, who added that more details of the governor's plan needed to emerge before he could pass judgment.
Speaking generally, he said there was blame to go around. "In the mid to late 90's, four years in a row we were the No. 1 state in the nation for business growth and investment," he said. "The economy was booming and manufacturing was doing well and we continued to get lulled into complacency."
John Engler, a lobbyist who was the state's Republican governor for a dozen years before Ms. Granholm, said, "I think when Michigan's unemployment rate was consistently under the national average and we were consistently adding new plants and investment, that showed we were taking the right steps."
Michigan's economy was chugging along in the middle to late 1990's, but the growth had more to do with the dynamics of the auto industry than government policy. The emergence of the sport utility vehicle and rising sales of big pickups boosted the Big Three's profits but masked fundamental problems. They lagged Japanese carmakers in manufacturing prowess and quality, and years of up-and-down performance had eroded their reputations.
In the last few years, Japanese and European automakers have introduced their own S.U.V.'s and made inroads into the pickup market. Making matters worse, the Big Three have tens of billions of dollars worth of pension and health care obligations for retirees, far more than competitors based in nations with more socialized health care systems.
Michigan has scored some success in attracting foreign investment. Last year, Hyundai, the fast-growing Korean automaker, broke ground on a technical center in the Ann Arbor area. Denso, a supplier partly owned by Toyota, has a large presence in the state. Ms. Granholm plans to visit Japan in the summer as part of a long-shot bid for Toyota's seventh assembly plant in North America. Her aggressive pursuit of the company has been noticed.
"We would be open to Michigan," said Dennis Cuneo, senior vice president of Toyota North America. "If you had asked me that question 10 years ago, I would have answered very doubtfully, but in the past year we have sensed a change in atmosphere. Governor Granholm has been very aggressive in courting Toyota."
And what do the Big Three think?
"This is in the tradition of America," said James J. Padilla, the president and chief operating officer of Ford. "We open our doors and make things open and accessible. My only concern is that I wish everywhere in the world we went we got the same reception."
Jennifer Granholm: pragmatic, and seems to have a clue, she's from Canada - who'd a thunk a liberal canuck would be my favorite dem - eh.
http://www.nytimes.com/2005/03/03/bu...rint&position=
Last edited by PistonFan; 03-05-2005 at 11:57 AM.
03-07-2005, 08:25 AM
#6
Senior Moderator
Originally Posted by MADCAT
The unions are killing the automakers.
I dont agree with Madcat often but on this one
. But, I'll say no more as to avoid this thread spiraling into an R&P discussion.
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03-07-2005, 09:46 AM
#8
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I've had enough with Michigan being run by foreigners (Canadians, Germans, people from other states like California, i.e. the laws they pass there affect what's done in Michigan).
They clearly do not have the best interests of the state at heart. Granholm sucks.
But the Michigan State types who used to run the state messed things up, and M-types leave the state cuz we can't stand the Michigan State losers and their 2.4 kids and 3.1 minivans and SUVs with the stupid obligatory "Oakland County Soccer Team" stickers or whatever.
If Detroit continues to decline, then the unipolarity of the state will diminish and it's possible that the western part of the state (i.e. Grand Rapids and the "bible belt" aspect of the Red parts of Michigan) will have a greater say. Then again, Engler was in control for, what, 12 years.
Ohio might not have a great economy, but with three major urban areas, as well as Akron, Dayton, Toledo, and Youngstown (I'm joking about the last one) ... the state has quite a bit of cultural and economic diversity, with no one group running the show, although the Republicans in Columbus are blamed for everything.
They clearly do not have the best interests of the state at heart. Granholm sucks.
But the Michigan State types who used to run the state messed things up, and M-types leave the state cuz we can't stand the Michigan State losers and their 2.4 kids and 3.1 minivans and SUVs with the stupid obligatory "Oakland County Soccer Team" stickers or whatever.
If Detroit continues to decline, then the unipolarity of the state will diminish and it's possible that the western part of the state (i.e. Grand Rapids and the "bible belt" aspect of the Red parts of Michigan) will have a greater say. Then again, Engler was in control for, what, 12 years.
Ohio might not have a great economy, but with three major urban areas, as well as Akron, Dayton, Toledo, and Youngstown (I'm joking about the last one) ... the state has quite a bit of cultural and economic diversity, with no one group running the show, although the Republicans in Columbus are blamed for everything.
03-09-2005, 12:33 AM
#9
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Join Date: Jan 2001
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Originally Posted by M TYPE X
I've had enough with Michigan being run by foreigners (Canadians, Germans, people from other states like California, i.e. the laws they pass there affect what's done in Michigan).
They clearly do not have the best interests of the state at heart. Granholm sucks.
But the Michigan State types who used to run the state messed things up, and M-types leave the state cuz we can't stand the Michigan State losers and their 2.4 kids and 3.1 minivans and SUVs with the stupid obligatory "Oakland County Soccer Team" stickers or whatever.
If Detroit continues to decline, then the unipolarity of the state will diminish and it's possible that the western part of the state (i.e. Grand Rapids and the "bible belt" aspect of the Red parts of Michigan) will have a greater say. Then again, Engler was in control for, what, 12 years.
Ohio might not have a great economy, but with three major urban areas, as well as Akron, Dayton, Toledo, and Youngstown (I'm joking about the last one) ... the state has quite a bit of cultural and economic diversity, with no one group running the show, although the Republicans in Columbus are blamed for everything.
They clearly do not have the best interests of the state at heart. Granholm sucks.
But the Michigan State types who used to run the state messed things up, and M-types leave the state cuz we can't stand the Michigan State losers and their 2.4 kids and 3.1 minivans and SUVs with the stupid obligatory "Oakland County Soccer Team" stickers or whatever.
If Detroit continues to decline, then the unipolarity of the state will diminish and it's possible that the western part of the state (i.e. Grand Rapids and the "bible belt" aspect of the Red parts of Michigan) will have a greater say. Then again, Engler was in control for, what, 12 years.
Ohio might not have a great economy, but with three major urban areas, as well as Akron, Dayton, Toledo, and Youngstown (I'm joking about the last one) ... the state has quite a bit of cultural and economic diversity, with no one group running the show, although the Republicans in Columbus are blamed for everything.
You sir are an idiot. Although I no longer live in Michigan (I realized after 16 months that it SUCKS), how can you posssibly place blame on people based on what college they went to? That is the dumbest shit I have ever heard. Considering though that most "Michiganders" would rather talk about stupid college rivalries than face the real issues at hand, it makes perfect sense. Go ahead and keep blaming everyone but yourself....
03-09-2005, 12:23 PM
#10
Race Director
Originally Posted by SJ Silver Type-S
You sir are an idiot. Although I no longer live in Michigan (I realized after 16 months that it SUCKS), how can you posssibly place blame on people based on what college they went to? That is the dumbest shit I have ever heard. Considering though that most "Michiganders" would rather talk about stupid college rivalries than face the real issues at hand, it makes perfect sense. Go ahead and keep blaming everyone but yourself....
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