by Gongwer News Service
April 3, 2009

“I’m from the government and I’m here to help,” has been a conservative standard punch line for several decades. Last Monday no one was laughing at the joke.

As gloomy as the first workday tends to be, that Monday took on a melancholic shroud deeper, darker and, frankly, more frightening than the public and business and elected officials had imagined. Leading up to that day there were indications the federal government would voice approval on the plans General Motors and Chrysler developed to restore their fortunes.

Sunday, March 29, the reality began to set it when GM CEO Richard Wagoner was forced to step down. Then at midnight the press embargos came off the federal auto committee’s recommendations for GM and Chrysler. Finally, mid-morning President Barack Obama confirmed the recommendation in an address that some comics likened to a combination car sales ad and colonoscopy prescription. GM had 60 days to come up with a new plan or face bankruptcy. Chrysler had a month to come up with an arrangement with FIAT or face the same.

For weeks up to Monday, Michigan officials, corporate and government, had been touting all the changes the auto industry had made, the concessions labor had taken, the improvements made to domestic product, the critical nature of the business to the entire country (serendipitously, former Health, Education and Welfare Secretary Joseph Califano was on the Michigan State University campus during the week and said CBS revenues (he’s on the board) were being hammered in part because there are so few car ads), how historically it was the auto industry that built the middle class in the U.S., how no matter how salubrious commentators kept assuring the public bankruptcy could be, in fact it would be a death knell to the industry.

The federal government’s answer to all that was, “Tough. Not impressed.”

Mr. Obama did assure the nation he believed in the car industry, that domestic cars were equal to any competitors’ and that the government would back car warranties. Anyone in Michigan hearing the comments could have been forgiven for thinking of the old joke — “government”…“here to help” — and not laughing.

The federal decision was especially shocking to the state’s top Democrats, who had worked for Mr. Obama’s election, who had said they were delighted to have a partner in the White House.

Combine Monday’s devastating pronouncements (and the crushing impact it will surely mean for the state’s economy) with the ongoing news during the week of continuing state revenue declines, the need for more budget cuts, the ever increasing U.S. unemployment rate and what that will mean for Michigan, and it was a measure of fortitude that state officials weren’t mainlining Prozac.

Yet, officials mostly put on a brave face. Almost every day Governor Jennifer Granholm appeared on one national television newscast after another. On Wednesday she told a statewide radio audience that by 2010 the state could have lost some 750,000 jobs from its peak employment in 2000 (still not quite erasing all the gains made in the 1990s).

She expressed again and again gratitude at Mr. Obama’s assurance. That gratitude seemed strained at times, and at one press conference she attempted to deflect any expressions of displeasure.

For the most part, officials followed suit, stating gratitude for the federal government’s confidence in the industry. The angry rebuke of Senate Majority Leader Mike Bishop (R-Rochester) was largely the exception to the restrained optimism.

But almost completely ignored were the comments of Lt. Governor John Cherry. For all the gratitude and confidence other officials expressed, his remarks stripped away the public face to expose the anguish executives struggled to contain. He was stark, brutally frank. He ignored platitudes and puffery for grim, cold honesty. In a time when politicians typically spin mush, the only thing Mr. Cherry spun was a hard truth.

The verdict on the car companies is “still out,” he said. It will “take tough medicine to undo years of economic neglect of the nation’s industrial base.”

More tellingly, Mr. Cherry said he hoped the “preconditions were not designed to force bankruptcy by any name,” which would be one step from bankrupting the nation’s “entire industrial base.”

And for Michigan’s people, the federal announcement was “the economic equivalent of a hurricane warning. It does not matter whose fault all of this is. It does not matter who is putting forth a solution. The bottom line is that thousands of families in Michigan and the Midwest are economically devastated. As this process unfolds, I will be encouraging our federal officials —elected and appointed — to aggressively join us in helping our citizens and businesses to weather this storm and to invest in Michigan’s future economy,” he said.

So to the federal gauntlet on the auto industry, Mr. Cherry laid down the state’s reply. The answers, as always, are yet to come.

For nearly 50 years in Michigan, Gongwer News Service has provided independent, comprehensive, accurate and timely coverage of issues in and around Michigan’s government and political systems. For subscription information, including a free trial, visit Gongwer online.