  Lodgedodger Member Username: Lodgedodger Post Number: 926 Registered: 05-2008 |
Compuware chief takes on Detroit Three senate critic BY PETER KARMANOS JR. • November 19, 2008 U.S. Sen. Richard Shelby, R-Alabama, has emerged as the leading Senate critic of the proposed aid package for the Detroit auto industry. It’s pretty clear Shelby has nothing but disdain for Ford, GM, Chrysler and the United Auto Workers, not surprising considering he comes from a state with assembly plants for Mercedes-Benz, Honda and Hyundai. Shelby is in a key position on the Detroit rescue as senior Republican on the Senate Banking Committee. Wednesday, he continued his anti-Detroit rhetoric, saying he didn’t think the U.S.-based industry was going to turn around without a bankruptcy and the ouster of its leadership. “I don’t think they have immediate plans to change their model, which is a model of failure,” Shelby said, dismissing the $25 billion in bridge loans being requested as “life support” for Detroit. “I believe their best option would be some type of Chapter 11 bankruptcy,” Shelby said. “These leaders have been failures and they need to go.” Shelby actually ratcheted up his anti-Detroit campaign on the Sunday morning talk show circuit, which drew an interesting response from Motor City defender Peter Karmanos, chairman and CEO of Compuware Corp., which moved its headquarters into a new downtown building just a few years ago. Here’s part of what Karmanos said in a letter to Shelby: I watched with great interest Meet the Press, during which you and Sen. Carl Levin debated the merits of (or, concerning your position, the folly) providing financial aid to America’s domestic auto industry. I must admit that I was more than a little taken aback by how out of touch you really are about what Detroit’s Big Three automakers have been doing for some time and continue to do to transform their businesses to both survive in today’s debilitating economic climate and thrive in the future. The steps have been extremely significant and take it from me—someone who lives and works in the Motor City—incredibly painful as well. … I can only trust that you will take some time and conduct the proper due diligence before continuing to espouse your inaccuracies. At minimum, I believe the domestic auto industry (and its millions of hardworking, taxpaying employees), which helped make America great, deserve as much. Don’t you? The intent of this letter, however, is not to take you to task for the inaccuracy of your comments or for the over-simplicity of your views, but rather to point out the hypocrisy of your position as it relates to Alabama’s (the state for which you have served as senator since 1987) recent history of providing subsidies to manufacturing. During the segment on Meet the Press, you stated that: “We don’t need government — governmental subsidies — for manufacturing in this country. It’s the French model, it’s the wrong road. We will pay for it. The average American taxpayer is going to pay dearly for this, if I’m not wrong.” I trust it is safe to say that when you refer to “government subsidies,” you are referring to subsidies provided by both federal and state governments. And if this is in fact true, then I am sure you were adamantly against the State of Alabama offering lucrative incentives (in essence, subsidies) to Mercedes Benz in the early 1990s to lure the German automobile manufacturer to the State. As it turned out, Alabama offered a stunning $253 million incentive package to Mercedes. Additionally, the State also offered to train the workers, clear and improve the site, upgrade utilities, and buy 2,500 Mercedes Benz vehicles. All told, it is estimated that the incentive package totaled anywhere from $153,000 to $220,000 per created job. On top of all this, the State gave the foreign automaker a large parcel of land worth between $250 and $300 million, which was coincidentally how much the company expected to invest in building the plant. With all due respect, Senator, where was your outrage when all this was going on? … I certainly don’t recall you going in front of the nation (as you did this past Sunday) to discuss what a big mistake Alabama was making in providing subsidies to Mercedes Benz. If you had, however, you could have talked about how, applying free market principles, Alabama shouldn’t have had to resort to subsidies to land Mercedes Benz. Competitively speaking, if Alabama had been the strongest candidate under consideration (i.e. highest quality infrastructure, workforce, research and development facilities, business climate, etc.), then subsidies shouldn’t have been required. The fact is that Alabama knew that, on a level playing field, it could not compete with the other states under consideration and, thus, to lure the German car builder to the State, it offered the aforementioned unprecedented subsidies. In effect, Alabama — your state — did exactly what you said government should not do: provide subsidies for manufacturing. It’s no great mystery why Alabama politicians went to such dramatic anti-free-market measures to secure Mercedes Benz — they did it for the betterment of their state through job creation and increased tax revenues. And who could blame them? Is that so different than what would occur by providing financial aid to help rescue the domestic auto industry? Such aid would save millions of jobs and millions of dollars in lost tax revenue. Additionally, unlike the giveaways Alabama bestowed upon the foreign automaker in question, United States tax payers would be reimbursed with interest (as they were when Chrysler received government aid in the early 1980s) for their investment in what is clearly a critically important industry for America’s present and future. Peter Karmanos, Jr. is Chairman and CEO Compuware Corporation http://www.freep.com/article/2 0081119/OPINION05/81119080 Very interesting take on the Senator's unwillingness to grant a bailout loan to the Detroit Three. | ||
Bob Member Username: Bob Post Number: 1877 Registered: 11-2003 |
Go Mr. Karmanos!!!! He makes a very interesting point in bringing light to this Alabama Senator's hypocrisy. Unfortunately, I don't think there is any way of changing this Alabama hicks mind. They like being a recipient of Michigan and other manufacturing bases being donor states. Of course with our current job loss, I would imagine sooner of later our status as a donor state might change. But in any case, this is a great, well written response to a Senator who clearly has no clue. | ||
Pffft Member Username: Pffft Post Number: 1814 Registered: 12-2003 |
Right on ... I knew the Republican senators making the most noise were deep in the pockets of the foreign automakers... | ||
Bob Member Username: Bob Post Number: 1878 Registered: 11-2003 |
And we are getting dangerously close to a filibuster proof margin in the Senate for the Dems. 2 more to go and the GOP is in trouble. And if they let the auto industry go down and take the millions of jobs with it, they will not have a chance or getting anything back in 2012. | ||
Crawford Member Username: Crawford Post Number: 434 Registered: 10-2006 |
Um, Karmanos, you're an idiot. How on earth are you able to run Compuware? PLEASE do not embarass yourself and further harm the Big Three. Alabama incentivizing new companies to move into their state is COMPLETELY DIFFERENT than asking the feds to divert billions of taxpayer dollars intended for market liquidity. -States are not the same as countries -Tax breaks are not the same as Treasury dollars -Preventing bankruptcy is not the same as luring new businesses If Karmanos really thinks it's the same situation, then Granholm is more than welcome to incentivize the Big 3 in the same manner as practiced in Alabama. | ||
401don Member Username: 401don Post Number: 865 Registered: 11-2007 |
Did Karmonos send this anywhere besides the freep? I would like to know if the N.Y. Times or Washington Post or Tuscaloosa Yahoo News would have the balls to print it. | ||
Bob Member Username: Bob Post Number: 1882 Registered: 11-2003 |
I'm sure since everyone is against the Big 3, no one will see it. | ||
Pffft Member Username: Pffft Post Number: 1815 Registered: 12-2003 |
And we are getting dangerously close to a filibuster proof margin in the Senate for the Dems. 2 more to go and the GOP is in trouble. And if they let the auto industry go down and take the millions of jobs with it, they will not have a chance or getting anything back in 2012. After what they've been saying about "letting" the foreign automakers take over, they don't deserve a thing in 2012. | ||
Retroit Member Username: Retroit Post Number: 479 Registered: 04-2008 |
Thank you, Karmanos (and Lodgedodger)! I find it funny that a Senator would criticize the Big3 for requesting "life support" when in fact the U.S. government is on life support to the tune of over $10 TRILLION in debt owed to bond holders, half of which is owed to foreign nations! | ||
Novine Member Username: Novine Post Number: 855 Registered: 07-2007 |
"Alabama incentivizing new companies to move into their state is COMPLETELY DIFFERENT than asking the feds to divert billions of taxpayer dollars intended for market liquidity." He didn't say they were the same thing. Did you even read what he wrote? He said that Shelby's riding on this high horse opposing spending government tax dollars to help the auto industry when Alabama poured hundreds of millions of dollars in direct aid and indirect assistance to foreign auto companies. Please tell us how spending the tax dollars of the people of Alabama is not a government subsidy? | ||
Lilpup Member Username: Lilpup Post Number: 5680 Registered: 06-2004 |
It's not even Alabama tax money. They're a huge debtor state! | ||
Thecarl Member Username: Thecarl Post Number: 1448 Registered: 04-2005 |
so, michigan does not provide tax breaks for the american automotives to build, expand, and keep facilities in michigan? i really thought that was the case. you go, karmanos! we've lost the best we had to run detroit when kwame was sent to jail, but you haven't lost your fighting spirit! | ||
Gene Member Username: Gene Post Number: 130 Registered: 10-2006 |
Why no support for the big three from Mexico, post NAFTA most of the automotive suppliers went south for the low wages and relaxed government regulations. The big three's demise will have a bigger impact there. Place blame with Bill Clinton for this mess. | ||
Detroitplanner Member Username: Detroitplanner Post Number: 2018 Registered: 04-2006 |
Pete gets my Golden Coney award for sticking up for the Motor City! Maybe he would rather have lunch at Scotty Simpson's on me? | ||
Lilpup Member Username: Lilpup Post Number: 5682 Registered: 06-2004 |
Carl, Michigan is not a debtor state - when we give tax breaks it really is Michiganders' money, not from someone else! | ||
Gravitymachine Member Username: Gravitymachine Post Number: 2421 Registered: 05-2005 |
i don't possess near enough middle fingers to accurately express how i feel about the good senator from alabama. (Message edited by gravitymachine on November 19, 2008) | ||
Thecarl Member Username: Thecarl Post Number: 1450 Registered: 04-2005 |
thanks lilpup! (now, i gotta go do my homework, and google debtor state!) | ||
Lilpup Member Username: Lilpup Post Number: 5684 Registered: 06-2004 |
'debtor' states get back more from the Fed level than they pay in, 'donor' states get back less than they pay in http://taxfoundation.org/taxda ta/show/22685.html | ||
Blessyouboys Member Username: Blessyouboys Post Number: 538 Registered: 07-2005 |
Salon.com http://www.salon.com/tech/htww /2008/11/19/shelby_and_the_bai lout/index.html Wednesday, Nov. 19, 2008 08:44 PST Why the South opposes a bailout for Detroit When Michigan Sen. Carl Levin makes statements supporting a bailout for U.S. automakers, he is generally dismissed as a spokesperson for his constituents -- Michigan, of course, is ground zero for the Big Three. No state in the union employs more autoworkers. So how come Richard Shelby, R-Ala., doesn't get the same treatment? In Congress, Shelby is the most outspoken opponent of a bailout, routinely declaring that the Big Three are "dinosaurs." But if there was truth in advertising, every time he opens his mouth there should be a disclaimer: Sen. Shelby represents the interests of his constituents -- non-union employees of foreign-owned automobile manufacturers. Alabama ranks sixth on the list of states with the most autoworkers -- by last count 130,000 jobs directly or indirectly depended on the auto industry. Hyundai, Honda and Mercedes-Benz all have state-of-the-art plants in Alabama, producing, among other things, the kind of low-gas-mileage luxury sport utility vehicles that most U.S. consumers are currently reluctant to buy. Toyota manufactures engines for its Tundra trucks and Sequoia SUVs in Alabama. Scores of other parts suppliers thrive, employing non-union labor in a right-to-work state. Alabama also ranks sixth, nationally, in production of cars and light trucks in the United States. All Honda Odyssey minivans sold in the U.S. are made in Alabama. The Hyundai Santa Fe SUV is made in Alabama. So who do you think would benefit most from a collapse of Ford, GM and Chrysler? How about states such as Alabama and the rest of the South, which have long been busy turning the industrial Midwest into the Rust Belt, well before outsourcing and offshoring and globalization became working-class swear words. Emptywheel, blogging at FireDogLake, was one of the first observers to pounce upon this, in a post last Thursday, "The Ideological Battle Over the Auto Overhaul Heats Up": In other words, Shelby isn't opposed to car companies that are stupidly committing and recommitting to SUVs. Rather, he's just opposed to car companies that make SUVs with union labor. Alabama's emergence as an automobile industry powerhouse has been rapid. Mercedes-Benz opened its first factory in the state in 1993. Today, according to the Alabama Automobile Manufacturers Association, "Motor vehicles were Alabama's top export in 2006 at over $4.9 billion -- equivalent to 35 percent of the state's total exports," and the automotive industry accounted for 13 percent of the state's manufacturing gross domestic product. Alabama's story is part of the larger narrative of the New South's emergence as an industrial playground for foreign manufacturers, eager to exploit non-union labor -- but still paying better wages than most local industries, thus partially insulating them from the threat of union organizers. It's a narrative that is going to come into clear focus during the next four years, if President-elect Barack Obama attempts to carry through on his promises to organized labor. Standing against him will be a phalanx of Southern Republican senators, led by Richard Shelby, opposing him not just on ideological grounds, but motivated also by clear financial incentives. -Andrew Leonard | ||
Scooter2k7 Member Username: Scooter2k7 Post Number: 162 Registered: 10-2007 |
If the Big 3 had their headquarters in New York, Boston, Chicago, or Los Angeles we would not even have this discussion. But since it is Detroit we do. The country is anti-Detroit. From my own personal experiences from traveling all over this country I have encountered a lot of hatred towards Detroit. Perhaps the Senate should read about the Arsenal of Democracy and how Detroit built the tanks, planes, and trucks to help win WWII against the same tanks, planes, and trucks that Mercedes and Toyota built for their countries. | ||
Pffft Member Username: Pffft Post Number: 1817 Registered: 12-2003 |
Absolutely right Scooter. | ||
Lowell Moderator Username: Lowell Post Number: 5159 Registered: 09-2003 |
Touché Pete K. Agree with Scooter too. Detroit is code speak for a lot of animosities - symbols of anti-unionism and racism at the top. What all the pundit don't realize is that battle for the American middle class' existence is being fought [and at this point being lost] right here in Detroit. We are at the center of a war that has been going on here for decades but is finally spreading to the rest of the country. But it has been okay because we 'deserve' it, right? | ||
Alan55 Member Username: Alan55 Post Number: 2414 Registered: 09-2005 |
From Yahoo! News: "U.S. federal aid for the Big Three would remove much of the urgency for tough restructuring decisions, said Representative Michele Bachmann, a Minnesota Republican." You would think that dimwit Bachmann would have learned to keep her mouth shut after nearly talking herself out of her congressional seat when she compared her fellow congressmen to " anti-American, friend-to-the-terrorists" right before the election. Michele, do your constituents and the whole country a favor - shut the fuck up. You can still be recalled. | ||
Bob Member Username: Bob Post Number: 1894 Registered: 11-2003 |
Fortunately, for a lot of these GOP legislators, this is their last couple times to create a stir before being mostly irrelevant when the new Congress and President take over, we just have to make it till then. | ||
Luckycar Member Username: Luckycar Post Number: 121 Registered: 02-2007 |
Screw Alabama.We whipped them at Little Round Top and the Wheatfield,July 1863.Hate them.Yes its a strong word,but I hate them.Next time a hurricane blows thru,go piss in wind but don't ask me for any cash. | ||
Philbert Member Username: Philbert Post Number: 408 Registered: 10-2003 |
Lowell said, "Touché Pete K. Agree with Scooter too. Detroit is code speak for a lot of animosities - symbols of anti-unionism and racism at the top. What all the pundit don't realize is that battle for the American middle class' existence is being fought [and at this point being lost] right here in Detroit. We are at the center of a war that has been going on here for decades but is finally spreading to the rest of the country. But it has been okay because we 'deserve' it, right?" I'm going to give you an opinion from someone that has no ties to the auto industry nor knows no one in the auto industry nor has ever been to Michigan. In my late teens early 20's I financed a new GM car. I needed a car at that time to get at least back and forth from work. I was a service industry worker making around 1/10 in wage and benefits what an auto worker makes. The car was junk. I spend a huge amount of my money keeping it road worthy all the while seeing auto workers threatening strikes over wages and benefits, the auto companies crying right and left to Congress for less regulations, less fuel efficiency standards, for more tariffs on imports. Imports, the cars that worked. I gave GM the benefit of the doubt and financed another new car. Junk again. GM didn't care, would not respond to inquiries. The dealership just told me how much this or that repair was to be. No one cared. I was out tens of thousand or about what a made in a year. Now you want money from me. Ha! So the irony of me getting an email from GM pleading for my support blew me away. You produce cars that the American public does not like all the while trying to force us to buy your cars. No matter how much people here on Detroityes or people in Detroit say the quality is as good as the imports, the rest of America does not feel that way. The consumer decides not the producer. Blaming it on coastal liberals is stupid and only further digs yourself in a hole. The auto industry is not the only industry hurting. One million people have lost their jobs this year in America. But you want us to bail out the auto industry that has exorbitant wages, bloated bureaucracy, and a bad product. No matter what you may feel the product is bad and is not what the consumer wants. I don't understand what you people don't get. The consumer feels you have a bad product. Only the auto industry can change that. Tariffs on good cars is not the answer. You the auto industry try to force us to buy your inferior products, to support your crazy high wages, and then want us to bail you out! The very people who earn less than auto workers are going to bail out the rich, the auto worker, in my eyes. What about all the working people who bought your junk products out of a sense of loyalty to the US and the US industry all to be ripped off decade after decade. And now you want money from us. Thats not a war waged on the middle class. It a war of the auto industry on the worker class and poor who cannot afford to maintain the unreliable cars. The average wage in this country is something like 37,000/year. There are tens of millions of people who make under 25,000 a year. Buying a car is a huge decision. GM/Ford/Chrysler had better have a good product that people want. They don't and didn't and thus blew it. Wanting more money, a bailout, from the very people you have sold bad products to for decades and wanting money from people who earn substantially less than auto workers is arrogance. Argue and debate all you want. The whole country is not Michigan and the people do not like your products. | ||
Alan55 Member Username: Alan55 Post Number: 2416 Registered: 09-2005 |
Philbert: "I'm going to give you an opinion from someone that has no ties to the auto industry nor knows no one in the auto industry nor has ever been to Michigan." So you bought vehicles decades ago, and that makes you an expert on all 8.5 million cars the Big Three sell every year, and all of the economics involved with making and selling them? Here's an idea - tell us what you do for a living. I am sure that the DY readers can come up with hundreds, maybe thousands, of bad experiences they had decades ago in your particular field that would be wonderful evidence on why we should avoid it in the future. Phil: "I don't understand what you people don't get." Here's what we don't get, Phil - if you have no ties to the auto industry, don't know anyone in the auto industry, and have never been to Michigan, why are you posting on a "DISCUSS DETROIT!" thread? Even more to the point, why are you posting on DETROITYES! at all if you live in Bumfuck Eqypt? | ||
Philbert Member Username: Philbert Post Number: 409 Registered: 10-2003 |
decades ago? No, as recently as a few years ago. It is up to the consumer not the manufacturer if the car is worthy of buying. I'm sure DY readers can come up with thousands of bad experiences in my field. I'm not asking for a bail out. My industry is hurting bad too. My income has been reduced by about 1/3. People are avoiding it. Listen, it is not just me but much of America that feels this way about your products. GM/Ford/Chrysler blew it time and time again. Why am I posting in this thread? Well this bailout is going to cost me money. Why am I posting here on Detroityes? This was the first Internet forum I joined, why I don't remember, and I joined well before what my join date says and I stuck with it. AS you can see I don't post often. I'm from Bumfuck Egypt? Ha, way to get me to support your bailout! | ||
Englishkills Member Username: Englishkills Post Number: 26 Registered: 10-2008 |
I'm afraid I don't agree with you, Lowell. I don't believe the rest of the country looks down on Detroit to the extent you believe. Maybe in some ways that are obvious, due to more noticable blight, poverty, etc, but generally most American's don't think a lot or know a lot about Detroit. That attitude found in many Detroiters seems to come from an inferiority complex that obviously hasn't helped the region move forward any. So what? So get over it and do something new instead of perpetuating the status quo and attitudes like that which have held the region back. Why is it that Boston is not in the same boat as Detroit right now? Boston could have hung onto their shipbuilding and textile industries and focused only on those and chosen not to diversify its economy, right? Then we'd be having the same discussion about Boston. I'm not trying to trash Detroit or Detroiters, I think there are a lot of great things about the town. The region just needs to adapt to the way things are in 2008. It's not the 50s anymore. Scooter said: "Perhaps the Senate should read about the Arsenal of Democracy and how Detroit built the tanks, planes, and trucks to help win WWII against the same tanks, planes, and trucks that Mercedes and Toyota built for their countries." Well, perhaps the people running the American car companies should read about these things as well and build something other than the same thing over and over again that people don't exactly seem to want to buy anymore. Detroit could invest in manufacturing trains and other vehicles for mass transit and all sorts of other things that can help bring the region's economy into the 21st century. The capacity is there with the plants and knowledge and everything else to create all sorts of new jobs in other industries. Why has it taken so long to even discuss let alone start to change things? | ||
Johnlodge Member Username: Johnlodge Post Number: 9217 Registered: 10-2003 |
quote: I don't think THAT many of us on this forum actually make them. We just don't think millions of people suddenly losing their jobs in the middle of a global recession is a great idea. Some of us also have concerned about the national security aspects of having no manufacturing or R&D base left. (The auto companies are the primary spenders on R&D in this country, much of the technology has uses outside the automotive industry) (Message edited by johnlodge on November 20, 2008) |
