Jack Lessenberry Essays and Interviews

Essay: Now for the Hard Part

This morning, President Bush announced that he's offering $17.4 billion in loans to the domestic auto industry. Michigan Radio’s Jack Lessenberry would have liked to be at the studio today to share his thoughts. However, he’s snowed in. Nevertheless, we were able to get Jack over the phone…

When Winston Churchill heard that the Japanese had bombed Pearl Harbor, he was overcome with emotion -- but not the emotion Americans felt. Churchill knew it meant his nation had been saved. He knew the United States would be drawn into the entire war, and that it meant Great Britain would not be conquered after all. “I went to bed and slept the sleep of the saved and thankful,” he later wrote.

But he also added that he knew there would be many grim days to come, and “many disasters and innumerable cost lay ahead,” and that things would get worse before they got better. The executives of the auto companies have to be feeling very much the same today.

Yes, they are now not going to go out of business and have to declare bankruptcy at the end of this month. Millions of new jobless workers aren’t going to swell the unemployment rolls in the first few months of next year. But unless Chrysler and General Motors can get their acts together, and soon, the $13 billion to $17 billion in new loans authorized today will just delay the inevitable.

That, in fact, is what Senator Richard Shelby of Alabama, the man Detroit loves to hate has been arguing all along.

Let’s give President George W. Bush credit. Today, for the second time in his presidency, and the first time since his televised address a few days after 9-11, he sounded like a statesman.

What he did today went against his political and ideological beliefs. But he recognized that sometimes the welfare of the nation means a president has to do necessary, if unpleasant things.

What we in Michigan have to realize is that everyone in the automotive universe is going to have hard choices to make as well.

And they are going to have to make them very soon. To quote the president: “Automakers must meet conditions that experts agree are necessary for long-term viability, including putting their retirement plans on a sustainable footing, persuading bond holders to convert their debt into capital that companies need to address immediate financial shortfalls, and making their compensation competitive with foreign automakers who have major operations in the United States.”

This is going to be hard stuff. Whatever happens, many autoworkers are still going to lose their jobs this year.

Others may be working harder for less. Winston Churchill said something else soon after America had gotten in the war that applies to our situation today. “This is not the end. This is not even the beginning of the end. But it is, perhaps, the end of the beginning.“

Detroit’s automakers got a chance for a new beginning this morning. They face perhaps the toughest three months in their history, as they race to come up with a successful plan by the end of March. There will be a lot of blood, tears, toil and sweat ahead.

But the nation gave them a chance to show what they can do. Today, all Michigan has to hope that they can make the most of it.

Hear Audio Story   

Essay: Shutting Down - 12/18/2008

Dana Perino, the woman who is serving as President Bush’s press secretary, said something yesterday that sounded ominous.

Speaking about the auto industry, she said “We are aware of their financial situation and are considering possible policy options to provide assistance.” That’s fine, except that’s what she’s been saying for a week or so now. But then she added, “As we’ve said, a disorderly collapse of the auto industry should be avoided.”

Maybe it’s just me, but ... is there any such thing as an orderly collapse of a major industry? There’s certain to be dust and broken glass all over the place, no matter how orderly it is made to seem.

Now maybe she didn’t mean anything by adding that word, disorderly. But I would prefer that she had just said that they wanted to avoid altogether a collapse of the auto industry.

This sort of reminds me of when I was writing about end-of-life issues. A doctor told me everyone’s goal should be to have a “good death.” Based on my observations, I wasn’t too sure that most of the people I had met who were facing death had any thought of adding the adjective “good,” no matter how peaceful.

What I am sure about is that when you find yourself on a hot stove, you shouldn’t need a lot of urging to get moving.

On any number of occasions since this financial crisis began, President-elect Obama has echoed, word-for-word, something Franklin D. Roosevelt said in his first inaugural address.

“This nation needs action, and action now.” President Bush seems to have had a more laid-back approach to the auto industry crisis. Not that laid-back is necessarily always bad, even when it comes to decision-making. There are problems that, given time, solve themselves. However, when it is a matter of life and death within weeks for a major manufacturing sector of the economy, you might think that a little more alacrity would be in order here.

But the most important thing is that the aid arrive, in time to prevent creating a few million more jobless next year.

By the way, if you know your automotive history, the Chrysler shutdown is actually a healthy sign of learning from past mistakes. Chrysler, in the bad old days before Lee Iacocca and the first bailout, used to keep the assembly lines humming, building mediocre cars even when there were no orders for them. They would then just fill empty lots with them. They called this building cars for their “sales bank.” Sometimes they would sit there for months. Attendants would come by every so often and check the batteries. Eventually, the cars would be sold at deep, sometimes money-losing discounts.

Chrysler ended that practice long ago. These days, the Japanese, “just-in-time” school of manufacturing and inventory control has taken its place. So -- perhaps President Bush has adopted a “just-in-time” philosophy for an emergency bridge loan.

I have no real problem with that, but, once again … does it have to be a case of “barely in the nick of time?”

Hear Audio Story   

Interview: Kristin Dziczek - 12/18/08

Yesterday, Chrysler announced that it would close all of its factories for a month. Meanwhile, General Motors said it is temporarily halting work on a new plant in Flint that would build engines for the new electric Chevy Volt. These announcements come as both companies waited for President Bush to follow through on indications that he would act to save both companies from possible collapse. Kristen Dziczek is with the Center for Automotive Research. Michigan Radio’s Jack Lessenberry spoke with her about the latest auto news.

Hear Audio Story   

Essay: Waiting - 12/17/2008

What has to be utterly baffling to anyone who really thinks about it is the difference between the way Congress treated Wall Street and the way they have treated the automotive industry.

True, Congress voted down the $700 billion bailout the first time they had a chance last fall. But to some extent, that was done so they could go home at election time and tell the home folks that they had stood up to the moneychangers. Well, for a week, anyway.

But when they caved in at last, whipped into submission by dire prophecies of doom, they put no conditions whatsoever on the bailout, as far as I can tell. For all I, or the average poor taxpayer knows, Treasury Secretary Henry Paulson may have given the money to Bernard Madoff. There hasn’t been a lot of scrutiny or really, very much coverage of where that money went.

Yet when the U.S. auto industry asked for bailout loans that amounted to four percent of what we gave Wall Street, the Capitol thundered with righteous indignation.

In the end, that was reduced to a paltry two percent, fifteen billion dollars, and still the Republicans in Congress would not allow that to happen, not unless the unions made impossible concessions.

There is something of an outrageous double standard here, one which the national press has virtually ignored. I have a theory on why this is, based on one of my past lives as a roving reporter.

My newspaper once sent me to South America for two months. My expense account took two days to put together; it involved a vast number of bills in a vast number of currencies. The paper had a semi-retired city editor who would scrutinize expenses with an eagle eye.

Whenever I went to Lansing overnight he would study my report and call me on the carpet if he suspected I had charged the newspaper for an extra five miles. But when I gave him my South American account, he passed it through without a word.

The reason why was simple. He knew he didn’t understand a word of it, and had no desire to get into an argument about something he totally did not understand. That’s what I think happened with Congress and the Wall Street bailout. To your average congressman, the machinations of Wall Street sound like what the first President Bush used to call “voodoo economics.” On the other hand the domestic auto industry is comparatively easy to understand.

Or more accurately, to think we understand. I do not consider myself an auto industry expert, but it was clear to me that some congressmen pontificating on it understand it even less than I do.

What I am certain about is that this economy does not need a million or more jobless overnight, that this country does need a manufacturing sector, and that a man bleeding to death doesn’t care where his life-saving transfusion comes from.

We need to stabilize the patient now, and then work to fix the long-term problem. So President Bush – enough already. Just do it.

Hear Audio Story   

Interview: Thaddeus McCotter

Negotiations over a rescue package for Detroit's automakers have reached into their sixth day as the Bush Administration says they are still evaluating their options. Michigan Radio’s Jack Lessenberry spoke with Congressman Thaddeus McCotter, a Republican from Livonia, about where the loan talks currently stand.

Hear Audio Story   

Essay: Michigan's Future - 12/16/2008

For the last several days, much of our state?s media has been flooded with nasty denunciations of the southern senators who killed the bill to extend emergency loans to the automakers.

I'm not sure we've seen a bigger case of regional hostility since Fort Sumter. What I do know is that last weekend, Kentucky Senator Jim Bunning, once a pitcher for the Detroit Tigers, was supposed to come to a sports memorabilia show south of Detroit to sign autographs. But after Bunning voted no on the bailout, the man who runs the trade center canceled him, saying, "I simply can't support anyone who votes against the economic well-being of our state."

Well, a little bit of righteously indignant Michigan patriotism is understandable, and maybe even healthy. The Bob Corkers and Richard Shelbys of the Senate did seem mean-spirited.

They appeared to be acting out of political vindictiveness and regional narrow-mindedness. Ironically, their biggest victims may eventually be their fellow Republicans in states like Michigan.

But the unpleasant and inconvenient truth is that a lot of their criticisms of the auto industry were not off-base at all.

Voting to cripple the economy and suddenly throw as many as three million people out of work does make no sense. Lifeboat situations demand lifeboat ethics. You save lives first, then find out who was asleep at the wheel. But while the credit crunch accelerated their problems, Ford, General Motors and Chrysler have been losing money for a long time.

The bottom line is that they aren't making profitable vehicles people want to buy.

Nor do they seem to have a coherent, persuasive strategy to get financially healthy, other than to work on their forthcoming electric and hybrid vehicles, like the Chevy Volt, and hope.

Chrysler has no strategy at all, since everyone knows it cannot survive as a stand-alone company. It's only choice is to look for someone to partner or merge with. Their case for help is the weakest of all, except for their 49,000 workers and their dependents.

Today, they are owned by a private equity firm whose books are closed to the public. Cerberus Capitol Management has money, but evidently doesn't want to transfer any to help its own subsidiary.

Instead, they want the taxpayers to do it.

For years, America has resisted any kind of industrial policy. But we need one now. Michael Moore?s idea for the government to take over the auto factories and use them to make mass transit may be too radical. But if we are going to commit taxpayer billions to saving the automakers, we have the right to require sensible policies.

When it comes to the automotive world, Adam Smith's hidden hand is no longer able to shift into gear. But a state-run auto industry doesn't sound appealing either. President Obama needs to get the best financial and engineering minds together as soon as possible to craft an intelligent and coherent policy for this industry and America.

Or we can continue to pour money into a failed system, which will always somehow need just a little bit more.

Hear Audio Story   

Interview: Charles Ballard - 12/16/2008

We don’t know all the details yet, but it looks as though the Bush Administration is warming to the idea of giving the US automakers a bridge loan. But, there are going to be a lot more questions about the economic health of the industry…as well as our state. Charles Ballard is a professor of economics at Michigan State University. Michigan Radio’s Jack Lessenberry spoke with him about how to position our state for the future.

Hear Audio Story   

Essay: Electoral College - 12/15/2008

They are gathering in state capitols across America today, the five hundred and thirty eight members of the Electoral College, an arcane institution the authors of Our Constitution created.

Seventeen men and women are meeting in Lansing today, in a session presided over by Lt. Gov. John Cherry, and cast our votes for President. In Ohio, electors will vote to the accompaniment of a color guard and a musical interlude. In Pennsylvania and New York, there will be long and involved ceremonies. But in Iowa, the seven electors will just troop into a conference room, vote, and go home.

What’s happening today is, in fact, the real presidential election, the one that officially counts. What we the people did in November was to choose 365 electors pledged to Barack Obama and Joe Biden, and 173 pledged to John McCain and Sarah Palin.

We think that‘s what the vote will be today. But there are sometimes surprises. Four years ago, one of John Kerry‘s electors voted for John Edwards instead. In 2000, one elector refused to vote at all. Back in 1976, one of President Ford’s electors voted for Ronald Reagan instead. None of these so-called faithless electors has ever made a difference in the outcome.

By the way, this wasn’t how the founding fathers intended for this to work. They were wise, but they were naïve in that they didn’t foresee political parties. They thought we, or more accurately the legislature, would choose the wisest people in our state.

They then would get together, probably over some Madeira, and choose the best man in the country to lead us. If nobody got a nationwide majority, the House of Representatives would then pick the President from the top three candidates.

However, it took about five minutes for political parties to take this over. For many years, the electors have been nominated by the parties, and are expected to vote for that party’s candidates for president and vice-president if they win the popular vote in the state.

Mostly, the electors are relatively unknown party stalwarts, though this year, two of them are Teamsters leader James Hoffa and United Auto Workers’ president Ron Gettelfinger.

There are those who want to do away with the electoral college, and have the president elected by the national popular vote.

But if that were the case, Sterling Heights and Ada and Owosso would never see a candidate for president. Neither would Nevada.

They would spend all their time in TV studios, or in major metropolitan areas. What if we got rid of the electors themselves, the people, and have the awarding of electoral votes be automatic?

I don’t like that either. Some day, if our nation lasts long enough, some winning candidate for president will die, or have to be replaced between the day the people vote and the electoral college meets. When that day comes, the electors that year may have to do the job the founders intended, and pick the best person for the job.

And I think George Washington would like that.

Hear Audio Story   

Interview: John Kelly - 12/15/2008

You may have voted last month, but the real presidential election takes place today. All across America, members of the Electoral College are gathering in their state capitols to officially cast their ballot for President of the United States. Former State Senator John Kelly served as an elector from Michigan in 2000. Michigan Radio’s Jack Lessenberry spoke with him about what it’s like to take part in this official, political act.

Hear Audio Story   

Essay: Grim Future - 12.12.08

What's going on right now with the auto industry and Congress has to do with more than politics. It has to do with the economic survival of this state. And also at stake is whether or not the entire nation enters something like an economic depression.

But there is also a political dimension to all this, and Republicans should be scared to death. Senators from their national party have done everything they can to destroy the auto industry and the United Auto Workers union. Yes, GOP congressmen from Michigan backed the bailout. But the Senate leadership of their party turned on automotive Detroit. Senators who had happily voted to giver Wall Street $700 billion dollars just to cover their losses would not spend $14 billion to save a major manufacturing industry.

And it is not just that they wouldn?t vote themselves to spend it. They would not even ALLOW the full senate to vote on this.

These men, led by Senate Minority Leader Mitch McConnell of Kentucky, Bob Corker of Tennessee and Richard Shelby of Alabama, come from states where the Japanese and other automakers have major plants, factories their states have provided with vast amounts of tax incentives to build there.

Those plants employ thousands of workers, none of whom is a member of the UAW. President-elect Obama won a landslide of nearly ten million votes nationwide, but he lost all of these states overwhelmingly. Their senators don't care what he thinks, and they don?t care about the economy of Michigan or the rest of the nation.

If General Motors and Chrysler go down, millions of jobs will be lost, some in every state of the nation. Saving them, giving them a chance to emerge from the credit crunch, should have been a national priority, on par with rescuing people from a disaster.

But these senators do not have their priorities straight. They were unwilling to let the auto industry be saved because the unions would not agree to reduce their wages to those of non-union labor in the South by the end of next year.

To his credit, President George W. Bush gets it. He pleaded with these senators to change their minds. But they would not.

Some appeared drunk on their newfound power. But saner Republicans have to be worried. The days of their being competitive in much of the nation may be over. As a result of the Great Depression, Republicans lost every presidential election for twenty-four years. If this economic holocaust isn't stopped, it will be one Senate Republicans deliberately tried to cause. I got an e-mail from a lawyer in Sault Ste. Marie. He said: "This is regional economic warfare, pure and simple. Michigan is a great state. It has good people -- hard-working people who make things. The nation has gained from its natural resources and industrial capacity.

And now, we will remember this in the same way that Georgia remembers William Tecumseh Sherman."

Republicans didn't win Georgia for a hundred years after the Civil War. They might want to keep that in mind.

Hear Audio Story