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Michigan Governor Optimistic On Auto Industry

Michigan Gov. Jennifer Granholm (left) and Ed Montgomery, the White House director of recovery for auto communities and workers, spoke to reporters in Lansing, Mich., on Wednesday. Montgomery visited Granholm to discuss President Obama's auto task force initiative.
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Michigan Gov. Jennifer Granholm (left) and Ed Montgomery, the White House director of recovery for auto communities and workers, spoke to reporters in Lansing, Mich., on Wednesday. Montgomery visited Granholm to discuss President Obama's auto task force initiative.

The decline of the U.S. auto industry has hit Michigan with an economic wallop. The state has lost more than 600,000 jobs since 2001. And with more plant closings in the works, another 150,000 jobs are expected to disappear before the end of next year.

President Obama has pledged to save the U.S. auto industry, but that help comes with conditions.

The White House forced out General Motors chief executive Rick Wagoner this week, and it's pressuring Chrysler to partner with foreign automaker Fiat. It's also given both automakers short deadlines to come up with restructuring plans.

Few have more at stake in the fight to save the automakers than Michigan Gov. Jennifer Granholm. But Granholm tells NPR's Michele Norris she's optimistic about what she's heard recently from Obama.

"He was unequivocal," she says. "He's standing behind the auto industry. He wants and thinks it's important for America to have a viable domestic auto industry. He thinks it's important for our national security, for our energy security. But we also need to help the communities and the families that have been affected by the contraction in the auto industry."

On Wednesday, Ed Montgomery, the White House director of recovery for auto communities and workers, visited with Granholm and her economic development team to discuss how to revitalize the auto industry.

Montgomery is "going to work with us to make sure there's an appropriate federal response for those families," Granholm says. She says she told Montgomery that Michigan needs his "help in whatever [he] can do to help add sectors to Michigan's economy that dovetails with the Obama administration plan."

"We put out a whole array of things — both on the economic development side as well as on the side that will help citizens be trained for those new jobs," she says.

Granholm compared the situation in Michigan with that in Louisiana after it was devastated by Hurricane Katrina in 2005.

"There was an inelegant response, but a very significant response, by the federal government when a community is hurting," she says. "Ours is an economic disaster and it has happened over a longer period of time, but it is no less real for the citizens here."

When asked whether she thinks there's a double standard in how the federal government has taken a tougher approach with the auto industry than the financial industry, Granholm says, "Yes."

"I do think there's no way to justify the difference in treatment, except to ratchet up, I think, what the taxpayers would expect of the treatment of Wall Street," she says. "People want to make sure their money is wisely spent. They want to make sure they're not throwing good money after bad, and they want those CEOs to be held accountable. I think that's what should be asked of the auto industry, and what should be asked of the financial industry."

Granholm says the "last thing" she wants to see happen is controlled bankruptcies for General Motors or Chrysler, an idea that has been floated by the government.

"Because ultimately you want people to buy cars," Granholm says. "I haven't been able to figure out how you sell cars at a high volume when you declare bankruptcy. Clearly bankruptcy is a last resort. In the end, the success of this effort around the auto industry should be measured whether there's a viable American auto industry, not whether there's a bankruptcy that you move through. And that, I'm glad to say, the president is very much committed to."

As for whether Granholm thinks it's realistic that all of the Big Three automakers survive, Granholm maintains a level of optimism.

"Yeah, I think it is," she says. "2010 is going to be a great product year for these three automakers, and I think and I hope the American public will support these products. Because when you do, you support your neighbors, you support the millions of people across this country who work in this industry, not just the auto industry itself, but the glass industry and the plastics industry and the steel industry and the rubber industry, and all of those industries that employ our citizens. So I think that it's going to be a good year, 2010, for the auto industry."

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