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GM bankruptcy is the start of something new

By Rick Pluta, Michigan Public Radio Network


(Lansing, MI) – Lansing, MI (MPRN) - Governor Granholm says the General Motors bankruptcy is a tragedy for the company that once represented the nation's industrial might. She says it's also a tragedy for the workers who relied on it for a living. But the governor and the other political leaders also hope it represents progress toward some good news for the state with the most-challenged economy in the nation.

General Motors' bankruptcy was not a surprise. It's been expected for weeks. There wasn't a lot new to say about it, but when you're the governor, and your state's largest employer formalizes a deal that will put thousands more people on unemployment lines, you have to say something.

"We are not going to throw in the towel," says Gov. Jennifer Granholm. "These are tough times, but we're pretty tough ourselves."

Governor Granholm says the GM bankruptcy is the end of something that Michigan has known and loved, and the start of something new.

"We know now that we are hitting bottom," Granholm says. "We can see the light at the end of the tunnel. We can see the emergence, and that we will have a viable Ford, General Motors, and Chrysler."

But not before GM closes five plants, idles two more, and lays off more than 8,600 workers in Michigan.

The governor and state lawmakers are trying to make the best of the situation. One of their hopes is that as auto companies and suppliers consolidate, they will move operations into Michigan.

Republican state senator Jason Allen chairs the Senate Commerce Committee.

"We know the consolidation will be taking place, so what are the things that we can help to consolidate that industry in the Midwest, and specifically in Michigan," Allen says.

Allen says that could include tax breaks, help with relocating and training, and helping auto suppliers find the capital they need to retool and compete in new industries.

About 900 people, many of them union members, rallied in front of the state Capitol to demand more help for workers.

(It's) not as mighty as it once was. An estimated 8,600 GM workers will lose their jobs, and the unions have agreed to many concessions - including the right to strike.

Rebecca Reinbold is a United Steel Workers member from Bay City. She says she's here out of a sense of solidarity with the United Auto workers. And she's here to call on the legislature to extend unemployment benefits and spend more on job training.
"There's going to be a lot of families without work, and they're going to need help," Reinbold says.

"This is such a wrenching transition that we're not quite at the bottom of it," says Charles Ballard.

Ballard is a Michigan State University economist and the author of the book, "Michigan's Economic Future." He says there will be more job losses this year and next. And he says the state will be hard pressed to keep up with the demand for unemployment benefits and human services.

"There's no way to look at it without saying that 2009 is going to be a very, very ugly year and it probably won't be until 2011, even in the best case scenario, that we really start to add employment," Ballard says.

It's expected that by then, Michigan will have lost almost a million jobs since the year 2000, most of them automotive jobs. And it's expected that Michigan's economic landscape will be dramatically altered without the monolithic presence of its car companies.

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