by Gongwer News Service
November 17, 2008

While the failing auto industry has put Michigan on the national map, as of late the Big Three’s falling stock also has made a national celebrity of Governor Jennifer Granholm, placing her in side-by-side photo opportunities with President-elect Barack Obama and potentially among one of his picks for a post in the next administration’s cabinet.

The press for some $25 billion in federal bridge loans sought by the auto industry had Ms. Granholm popping up on several national broadcasts last week, including CNN’s American Morning and NBC’s Today Show as well as news talk shows on CBS, CNBC and the Larry King show. She has also appeared on the Diane Rehm program on National Public Radio and co-authored an op-ed in USA Today.

The governor, who has obvious intimate knowledge of the auto industry’s importance to the state and country’s economic stability, reiterated time again that the alternative to loans would mean financial ruin for not only the car companies but for nearly every American.

She said she is working with other governors to press the case for federal loans to the auto industry, adding Thursday on CNN that if any company is forced into bankruptcy it would put the companies over the cliff in terms of consumer confidence and risk their survival.

The loans would mean reworking the language in the $700-billion financial rescue package that was approved by Congress in September. Because it is draining cash so rapidly, the industry is pressing for action yet this year.

Ms. Granholm said she is confident the loans would help General Motors, Ford and Chrysler survive until the economy begins to recover and they can sell new kinds of products to consumers.

While some analysts worry about the risks that taxpayers would assume and that the companies could restructure under bankruptcy, the governor said this week, “Once you file you are off the cliff and it’s like an off switch. Consumers will not buy a car from a company that is bankrupt.”

Ms. Granholm said part of her strategy to convince Congress that federal aid in the form of a loan is essential is ensuring that governors of other states with auto and auto-related facilities “are on board and getting it out publicly what it means for the state and the country if they are allowed to fail.”

She said clearly strings would be attached to any federal aid plan, such as in executive compensation, but said similar attempts to rework UAW contracts would be complicated by requirements in labor law. She also noted unions have already agreed to concessions, taken on health care burdens and adopted a two-tier wage structure in recognition that the industry had to change.

She added that two of the Detroit Three also have new executives to try to work their way through the crisis, which she said is a clear sign that the industry recognizes the need for change.

Another point of national speculation surrounding Ms. Granholm, who is a member of Mr. Obama’s Economic Advisory Board, is whether she will leave the top job in Michigan to join the new administration. Speculation heightened after former U.S. Rep. David Bonior of Mount Clemens, also an economic advisory member, took himself out of the running for Labor secretary.

Many different possibilities have been bandied about, but lately a rumor that the president-elect will appoint the governor to a newly created Auto Czar position seems to hold the most water.

While Ms. Granholm said she only heard about the post on Wednesday night from news reports and that she hasn’t been approached directly, she also didn’t rule out the possibility of serving in the Obama administration out. She said on Thursday that she’ll “allow Mr. Obama to decide who he appoints.”

She has also said many times that she looks forward to being governor with a partner in the White House.

If the governor does exit before her term expires in 2010, Lt. Governor John Cherry would take over, leaving his post unoccupied since there is no constitutional provision to replace the lieutenant governor.

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