Top Republican senators said Sunday they will oppose a Democratic plan to bail out Detroit automakers, calling the U.S. industry a "dinosaur" whose "day of reckoning" is coming. Their opposition raises serious doubts about whether the plan will pass in this week's postelection session. Democratic leaders want to use $25 billion of the $700 billion financial industry bailout to help General Motors, Ford Motor and Chrysler.
Senators Richard Shelby of Alabama and Jon Kyl of Arizona said it would be a mistake to use any of the Wall Street rescue money to prop up the automakers. They said an auto bailout would only postpone the industry's demise.
You do remember that, don't you? How the Republicans promoted the idea that we should let the American auto industry die, claiming that failure was inevitable and automakers would never recover? Do you remember how they would have cost Michigan hundreds of thousands of jobs and potentially rendered the state insolvent?
Fast forward a couple years, and thanks to the Democrats, we have this:
General Motors: An article in the DNews reports the company is in for a "big week" this week, with officials expected to announce significant third-quarter profits in advance of a highly-anticipated IPO set for later this month. This comes on top of last week's "big week", when the automaker announced 600 new jobs and $190 million in investment at Lansing's Grand River plant, received tax credits for 900 jobs at the Warren Tech Center and 150 jobs at the Brownstone battery facility, and launched a new national ad campaign to tout the Chevy Volt and other GM products. Chrysler: Perhaps the biggest surprise of them all, Chrysler looks to be on a solid road to recovery. Analysts are predicting strong third-quarter sales, and that will come on top of a 60.9 percent leap in September based on the automaker's improved truck and fleet sales. Chrysler announced last week that they will invest $1 billion in Michigan: $850 million at Sterling Heights, adding a second shift and 900 jobs, and $150 million at the Dundee engine facility. Ford: Ford has been going strong, announcing last week that they will put $850 million into four Michigan plants, adding 1,200 jobs and while retaining thousands of others. It's third-quarter profits came in at a record $1.69 billion, beating all expectations, and they are continuing to pay down their debts.
The auto industry is enjoying its best year since the year 2000, and auto suppliers that were teetering on the edge of destruction not so long ago have been reporting a substantial jump in sales as well. Here are but a few recent announcements:
American Axle: The Detroit-based supplier of axles and driveline systems saw a sales increase of 50% in the third quarter to $618.2 million, earning nearly $40 million in profit and adding and/or recalling 2,000 workers worldwide, 200 in Michigan alone to increase its workforce in the state by 10%. Federal-Mogul: The Southfield auto parts maker hasn't announced any Michigan job totals, but its "third-quarter profit today that is more than four times larger than the profit the company earned for the same period last year", and they have added 4,000 jobs back, 2,000 of those in North America. Johnson Controls: The largest auto supplier in America announced its fourth-quarter net income rose 50%, and they have been hiring in the West Michigan area in recent months. Visteon: Visteon, Ford's largest supplier, left bankruptcy reorganization this month and has announced a stock offering of $2.9 billion. Lear: Lear announced that they quadrupled their third-quarter net income, and have raised the forecast for sales for the year overall.
Those are just some of the big names, and other suppliers that made it through the storm are bouncing back as well.
Now imagine all of the above - gone. Jobs - gone. Earnings - gone. Companies - gone. The state of Michigan, still number one in auto and auto supply jobs, would have been in ruins had the Republicans been running Congress and denied us this opportunity. And, not only did it take the Democrats in Congress and the Obama administration to save our state, it took a lot of hard work by the Granholm administration and MEDC, out there arguing with anyone who would listen that Michigan is still the place to be.
Among the biggest successes, Granholm said, was convincing GM and Chrysler to keep two Michigan plants open — Orion Assembly to build small cars and the Sterling Heights plant. Both plants remained open after the state found incentives to help them build new paint shops.
"It took some creative thinking in the structure of our tax incentives to make a solid business case for the Big Three to invest here and not elsewhere," Granholm said.
How is it that Democrats can pull the state's largest industry back from the brink of total ruin and not be poised to make sweeping gains in this election? Your guess is as good as mine. But let the record reflect that this was a defining moment in American manufacturing history, where Democrats chose to do something rather than the Republican nothing - and it has paid off. Big time.
"Over time - knock wood - people will appreciate that GM and Chrysler have in fact fundamentally changed and we've saved a million jobs," (Obama auto czar Ron) Bloom said. "This will be recorded as an important moment when the government did the right thing."
Some of us can appreciate it now, Mr. Bloom. And we will vote accordingly.
Everyone in Michigan should do the same.