December 22, 2008 - Gov. Jennifer Granholm, Lansing MI

Michigan Governor Fights for Big 3 -- and Her Future

Michigan Gov. Jennifer Granholm is driving hard to prevent her state -- and her future -- from becoming carnage of the wrecked auto industry.

Just a month ago, Gov. Granholm, deeply unpopular in her recession-battered state, was coaching car company chief executives on improving their plea for federal aid, privately pressing President-elect Barack Obama for help and boosting auto sales by ordering her state to purchase 1,600 vehicles from the Big Three for Michigan's fleet cars.

But even as the auto makers won their bailout bid from President George W. Bush, the rehabilitation of Gov. Granholm's stature has stalled. Despite close ties to Obama advisers, Gov. Granholm, who must leave office in 2010 under term limits, failed to land a cabinet post as the nominations concluded this week.

Now Gov. Granholm is stepping up her focus on greener projects. She just announced that a Dow Corning Corp. joint venture will invest as much as $1 billion in a manufacturing facility in Michigan to make high-tech components used to produce solar energy. Rushing to a news conference where the governor would tout 600 new jobs, one aide said, "We haven't mentioned autos all day!"

But some opponents say she is more of a show horse than a workhorse. "Jennifer Granholm likes to be governor more than she likes to govern," said Michigan Senate Majority Leader Mike Bishop, a Republican. "She's been unable to stem record job losses." Added one auto executive, "Even as she fights for us, it's clear she's a term-limited governor looking to her future." Just 20% of respondents said the governor's performance was "excellent" or "good" in a poll by Michigan State University earlier this year.

Gov. Granholm defends her record. "I'm in the chair when the economy is going through an enormous challenge," she said. "People want to blame someone, but we're taking the right steps."

And many Democrats consider Gov. Granholm a future star, though eclipsed for now. "Jennifer's future is better than her state's," said one Democratic strategist.

Gov. Granholm's tenure has been dominated by the reeling Michigan economy, which has the country's highest unemployment rate, currently approaching 10%.

A federal prosecutor with a strong conviction rate, she won her first elective office, state attorney general, in 1998. In 2002, she beat fellow Democrats, 13-term U.S. Rep. David Bonior and former Gov. James Blanchard to become Michigan's first female governor.

Michigan has lost nearly 40 percent of its manufacturing jobs -- including auto production -- since 2000. "We've been in the middle of this hurricane," Gov. Granholm says.

Her push to develop alternative energy sources in her state caught the attention of Mr. Obama when he campaigned in Lansing, the state capital, and Flint. At the events in June and August, the pair brainstormed about retooling Michigan's empty factories to build fuel-efficient cars and "green" energy products such as solar panels and wind turbines. "Their camaraderie was genuine and instant," said Debbie Dingell, a General Motors Corp. official who is married to Michigan Rep. John Dingell, who was at one meeting.

Obama advisers say they further bonded with Gov. Granholm when she played Alaska Gov. Sarah Palin in debate preparation for Vice President-elect Joe Biden. And at the news conference in October to introduce a dozen economic advisers, the prize spots on each side of Mr. Obama went to former Federal Reserve Chairman Paul Volcker and Gov. Granholm.

As the financial crisis made it difficult for consumers to get car loans, Gov. Granholm assured the auto makers that Mr. Obama was committed to maintaining a viable automotive industry and would offer some assistance after he took office, several Detroit executives say.

But the poor performance of auto-company executives at their first hearings on Capitol Hill last month dashed that calculus.

During a visit to Jordan to urge King Abdullah to invest in her state, Gov. Granholm turned on the news in her hotel room and saw the chief executives of the Big Three being skewered in Congress. She cut short her trip and flew all night from Amman to Washington. Following a quick shower at a hotel on Capitol Hill, Gov. Granholm hit the halls of Congress and the Obama transition office to push for a revival of the rescue talks. She urged the auto officials to embrace electric vehicles and to apologize for pushing gas guzzlers. Even before leaving the Middle East, she phoned Ford Motor Co. Chairman William Ford Jr. with a plea: "Go on offense and be the voice of this industry."

With nonstop emails and phone calls, "she's very passionate" about redirecting Detroit's auto makers, said Mr. Ford. Added United Auto Workers chief Ron Gettelfinger: "Gov. Granholm has been extremely helpful. She inherited the crisis in this state and hasn't had any help from Washington."

Nevertheless, Congress failed to pass a rescue package, which forced the auto makers to seek aid from Mr. Bush. Gov. Granholm says that even as she was making last-minute rounds on Capitol Hill last week, she worried that Republicans would have the ultimate say and block the bailout.

Gov. Granholm remains optimistic about the future of the auto companies. She recently bought 100 shares of auto stocks to give to each of her three children for Christmas.

Original Story - Wall Street Journal

Update Story - February 23, 2009

Granholm bristles at N.Y. Times columnist's stance on automakers

Gov. Jennifer Granholm holds up Thomas Friedman's book, “The World is Flat,” during a 2005 Detroit Economic Club luncheon. Granholm took issue today with Friedman's assertion that General Motors and Chrysler should go into bankruptcy.

Michigan Gov. Jennifer Granholm used to be a big fan of New York Times columnist Tom Friedman, citing his 2005 homage to globalization, “The World is Flat,” at every opportunity.

No more. Now she seems more inclined to think Friedman’s just flat wrong.

Especially when he suggests, as he did Sunday, that General Motors has “become a wealth destruction machine” and should be put, along with Chrysler, into bankruptcy.

Granholm jumped CNN host Wolf Blitzer today when he asked about Friedman and the domestic auto companies.

“Would you buy a car from a bankrupt company? Would you spend thousands of dollars? Granholm asked.

“Eighty percent of consumers say that they will not buy a car from a bankrupt company. If you put them into bankruptcy what do you do with all the suppliers. Are we going to have a manufacturing sector? Are we going to support that sector?”

Better for the federal government and taxpayers to support restructuring, she told Blitzer.

“It’s going to be tough …but let’s make sure we have an industry that succeeds.”

Update Story - Detroit Free Press