If you want to see how convoluted Mitt Romney’s record is regarding what to do to help the American auto industry, simply compare his cornucopia of positions vs. those of former Michigan Governor Jennifer Granholm. Romney has repeatedly demonstrated a practice of flip-flopping on a variety of issues. But you would think that addressing the needs of the auto industry would be something in which he would be both emotionally invested as well as knowledgeable.
He grew up in Michigan. His father, George, worked as an auto executive and from 1954-1962 served as chairman and president of American Motors Corporation (which was later acquired by Chrysler). George Romney had an interest in politics, with a wide variety of passions. In an era when there was a strong moderate wing of the Republican Party, he was one of its leaders. Because of his success with American Motors, he was a viable candidate for governor of Michigan. He ran and won in 1962, serving six years. He was a strong advocate of civil rights, working closely with Dr. Martin Luther King. Romney had the unenviable task of being governor of Michigan when four days of violent rioting occurred in Detroit. He worked to address the core problems of poverty and discrimination in Michigan. He worked to ,strengthen the automobile industry, which was the linchpin of Michigan’s economy. Job discrimination was now banned by federal law, so helping the auto industry was helping minorities.
George Romney’s son, Willard Mitt, has been anything but definitive about what to do address the needs of America’s auto industry and the hundreds of thousands of workers who labor for “the big three” as well as their primary suppliers. As reported by Julie Hirschfeld Davis of Bloomberg News on Feb. 16, 2012:
In 2008, Mitt Romney campaigned for president in Michigan decrying Washington’s disregard for lost automobile industry jobs.
Ten months later, after he had left the race, the Detroit native advocated that the government let General Motors and Chrysler go bankrupt rather than extend a federal bailout — a course that a bipartisan chorus of elected officials, including Michigan’s Republican Governor Rick Snyder, say would have been fatal for the automotive industry, leading to massive job losses.
Today, Romney takes credit for recommending a version of the restructuring that turned around the now-thriving U.S. car companies.
Mitt Romney now calls Massachusetts home, but his commitment to addressing the needs of the state where he grew up are clearly confused and do not provide any confidence for the residents of Michigan.
Some thirty years after George Romney served as governor of Michigan; an energetic and impassioned attorney-general of the state ran for and became governor of Michigan. In a year (2000) when Republicans were steamrolling the Democrats, Jennifer Granholm was the only Democrat to win state-wide office in Michigan. She took office nine months prior to 911, when the boom of the 1990s was already beginning to wane. Following 911, the U.S. economy began a prolonged recession, in part due to the shock of the events and in part because of the policies of President George W. Bush, which misdirected federal money from domestic needs to needless wars. He also rammed through Congress tax breaks that included families making more than $250,000 a year, clearly people who didn’t need a break.
Granholm had to face two vexing economic problems. There were companies such as General Motors, Ford, and Chrysler that were losing market share, and their very financial viability came into question. There were other Michigan-based companies, such as Pfizer Pharmaceuticals, that were making more money than ever. However, that in large part was due to the outsourcing of jobs to foreign countries, where wages were considerably lower.
The weaker the manufacturing base in Michigan became, the less tax money there was for the state to address the increasingly dire needs of its citizens who had lost jobs or could no longer afford school. Governor Granholm had to deal with cascading bad news. As she relates in her book, A Governor’s Story: The Fight for Jobs and America’s Economic Future, the state took one severe hit after another. One of the largest corporations in the state was Delphi Automatic, which manufactured a host of hi-tech and electrical components for cars, primarily General Motors.
On the evening of October 7, I got a call at home from Lynda Rossi. “It’s done, Governor. Delphi is going to file for Chapter 11 protection tomorrow.” “Oh, God. Put on your seat belt,” I said. “This is gonna be a rough ride.” It was the largest industrial bankruptcy in U.S. history. Business Week summarized the strategy: Miller filed for Chapter 11 protection only for his U.S. operations, which employ 32,000 UAW and other union workers. He was careful to exclude Delphi’s 115,000-worker foreign factories, many of which operate in low-wage countries such as Mexico and China. If Miller gets his way, court filings show, Delphi will end up with a U.S. workforce of perhaps 7,000, leaving the bulk of its production abroad. “The company will only keep U.S. operations that have technological value,” says Brian Johnson, an auto analyst at Sanford C. Bernstein & Co. Miller declined comment.
Governor Granholm was angry, but determined to confront Delphi CEO Robert Miller to awaken whatever social conscience he might have about the people of Michigan. She also offered additional tax breaks for Delphi even if it meant less revenue for cash-starved Michigan. Miller stuck with his basic decision, but Governor Granholm was able to shame him into canceling or reducing all bonuses and golden parachutes for top executives. Miller personally took a 10% pay cut. Imagine Mitt Romney using government power to try to tame a runaway private corporation.
Consider the following problem that Governor Granholm faced with Pfizer Pharmaceuticals:
There was an awkward pause that lasted just long enough to give me a bad feeling about Kindler’s call. “Well, that’s why I’m calling,” he said. “We’re going through a massive downsizing, too. Lots of generics coming online that bump out our main drugs. We have to rationalize our global footprint.” Kindler paused again, and I thought I heard him swallowing. “It means that we’re gonna have to close our Ann Arbor facility,” he continued. “And close some of our operations in Kalamazoo. I’m sorry to be the bearer of bad news.” My mind was racing, trying to assess the body count. How big were those facilities? “Wow, isn’t that about 3,000 jobs in Ann Arbor alone?” I said. “That can’t be right, can it?” “Actually, between Ann Arbor and Kalamazoo, it’s about 5,000. But we’re not going to give out the numbers publicly because we don’t want people to panic. I’m so sorry. I know that it’s the last thing you need to hear. Michigan has been a great partner for us. But it’s beyond your control and beyond my control, frankly.” “Jeff,” I heard myself almost panting, “is there anything we can do to keep you here? More tax breaks? Anything?” I was grasping for a lifeline. “This goes well beyond taxes,” he said. “It’s about generic drugs coming online. We have to reduce our global footprint. It has nothing to do with Michigan. We’re closing facilities around the world. I’m so sorry,” Kindler said again.
The governor was willing to reduce burdens and increase incentives for Pfizer. But as CEO Jeff Kindler said to the governor, “It’s beyond your control and beyond my control, frankly.”
Governor Granholm was able to slightly soften the blow. With an approach essentially opposite that of Mitt Romney, she recognized that there was very little that the state of Michigan, or any state, could do without extensive involvement by the federal government. As time went on, she was able to do the nearly impossible, convince President George W. Bush to provide aid for the automobile companies. When Barack Obama took office, Governor Granholm worked closely with the administration to stop the hemorrhaging of corporations and jobs from Michigan. She convinced the president, Vice-President Biden, and others in the administration to take advantage of the skilled work force in Michigan and provide start-up money for a number of hi-tech enterprises.
As hard as it is to believe, but with all its problems, Governor Granholm reports, “The Detroit Metropolitan area is the 7th fastest-growing regional economy in the country, after having been 147th out of 150 before the recession.” Governor Granholm had a clear vision and was willing to take political risks to accomplish goals for the benefit of her state and the nation.
Whether one compares Mitt Romney to his father, George, or to recently retired Michigan Governor Jennifer Granholm, Mitt clearly is lacking vision, principles, and a backbone. On Feb. 28, 2012, he may be rewarded by the people of Michigan with an embarrassing loss in the Michigan Republican Primary. If so, it will be well-deserved.