E-mail a friendGov. Jennifer Granholm
airdate March 12, 2009
Jennifer Granholm was re-elected as governor of Michigan in '06. During her tenure, she's introduced the nation's first bulk-buying pool for prescription drugs, championed universal access to higher education and worked to grow a new alternative energy industry in the state. She began her public service career as a clerk for Judge Damon Keith on the Circuit Court of Appeals and served as Detroit's federal prosecutor and state attorney general. She's an honors graduate of U.C. Berkeley and Harvard Law School.
Michigan governor comments on whether the U.S. auto industry should be bailed out. (1:23)
Full interview. (11:43)
Gov. Jennifer Granholm
Gov. Jennifer Granholm: I'm great, Tavis. Thanks for having me on.
Tavis: How you holding up? You don't look any worse for the wear, but I know it can't be easy being governor of Michigan right now.
Granholm: Well, bless you. (Laughs) It's the - apart from what the president's doing, my fellow governors have joked that this is the toughest job in the country, and it is, because we are ground zero, as you described in the opening piece, of the loss of jobs, particularly with the auto industry.
But frankly, we've lost so many jobs since the year 2000 that any help we can get from Washington or certainly from ourselves is going to be welcome.
Tavis: Speaking to the jokes that your fellow governors have been making with you about the toughest job in America that you have, beyond that of the president, I ask this question. You and I are friends, long-time friends, so there's no aspersion being cast by the asking of this question, but I do want to get your take.
Do you honestly believe that this auto industry can be turned around, or as governor of Michigan, you ain't got no choice but to be making the argument that you're making?
Granholm: No, I honestly believe it, Tavis. This is an industry that sells millions and - overall, an industry that sells millions and millions of a product that people want to buy. And the question is, as a nation, are we going to support an industry that will lead us to the electric vehicle, to fuel-efficient vehicles? Are we going to do what other countries are doing, which is to invest in that industry?
The auto industry is really the victim of this recession. They were in the middle of a transformation when this recession hit. You've got a lot of people who are saying, "Well, General Motors, Ford, et cetera, made bad decisions before." And that's true, maybe 20 years ago. But they have been in this huge transformation.
Last year, General Motors got the "Motor Trend" car of the year, the JD Powers car of the year, the green car of the year. People haven't listened or heard that side of things. So we are - if we insist as a nation in making things and in putting people to work in good, middle class jobs, then we have to, as a nation, commit to having a manufacturing industry, the backbone of which is the United States auto industry.
Tavis: So tell me what's been happening, then, inside of this Obama task force, and then I'll ask you specifically after that about the president and his role. But tell me about what's happening inside the task force, the meetings you guys have been having about what the way out, what the way forward is, Governor.
Granholm: Yeah, the task force came to Michigan earlier this week. They rode in the Volt, which is General Motors' electric vehicle that's set for selling next year. Excuse me, in 2011, it'll be - it's a 2011 model. I also met with them in Washington, D.C. Here's what they're saying.
The president is committed to having a viable American auto industry, and so I believe that there will be support to make that happen. The question is, how do you get from here to there when we are in the middle of this recession and there is no demand out there for any kind of vehicles?
The vehicles are not in demand from any of the international companies, either, and you're seeing other countries that are stepping forward to help their auto industries, too, through this global recession. If people aren't buying and the banks aren't lending, then we need to do something to bridge the gap from here to there, and that's really the question, is what is it that the task force is going to require of the auto industry regarding shedding of both their legacy costs as well as some of their bond holder obligations, their shareholder obligations, the labor agreements?
What are they going to require in order - in exchange for more federal investment. And by the way, Tavis, just very quickly, as you know, there is a commitment that this administration has made to producing electric vehicles and to becoming independent of foreign oil. You're not going to be able to do that as a nation unless you have a domestic auto industry that takes you there, unless you decide that you want to export the R&D associated with that electric vehicle.
So right now, all batteries for those electric cars are made in Asia. If we as a nation decide that we want to become independent of foreign oil, well, you don't want to then just turn around and become dependent on foreign batteries. You want to have that capability here in the U.S., and that's why it's important as a national priority to have a domestic auto industry.
Tavis: But fair to say that the auto industry does understand and is prepared to accept that the task force and the president cannot sell America on giving them more money without significant concessions.
Granholm: Yeah, and believe me, they have been - we are the poster child for those concessions, and here's the frustration, Tavis - if people came to Michigan, you would see. We have shed over 500,000 jobs. By the end of this year, we will be probably more than that. It's due largely to the automotive industry and the suppliers that are here.
So we know that they have been in the middle of massive restructuring - consolidations, shedding of factories, shedding of lines, concessions with the UAW. All of that has been going on.
And so the frustrating part for us who are sitting here who know the quality of these products that are now coming out, the research, the designs, the tremendous opportunities that they provide, and the frustrating thing is that all of this chatter out there is as though we aren't producing good cars, because we are producing good cars in America and certainly in this domestic auto industry. But we're in the middle of a recession, and we need a bridge.
Tavis: Two healthcare issues I want to cover relative to this industry; one having happened earlier today, the other a long-standing issue in the auto industry. I read this stat the other day and every time I see it - I've read it a few times - every time I see it, it just grabs me. There is a $1,500 gap between the price of an American car versus the price of a Japanese car - we're not even talking about the quality of the car, just the price of the car - a $1,500 gap between the average American car and the average Japanese car based solely on what the U.S. auto industry pays out in healthcare costs.
A $1,500 gap in the price of the car, generated by healthcare issues. Talk to me about healthcare and what's going to happen, because that's what's - isn't that, in part, what's tanking these companies?
Granholm: Absolutely. The cost that we put in America on businesses who now have to compete globally - it was different, I think, a couple of decades ago when we weren't competing globally so much and we were really selling products that we made internally. But now, when you're competing against countries who provide healthcare to their companies and you've got to have a level playing field, globally - so yeah, our car industry, but you could say the same thing for any other product.
Our car industry has a $1,500 disadvantage because we require in America our businesses to bear the freight. This is why this issue of healthcare is such an important issue tied into our economy. People have been complaining that the Obama administration is trying to do too much at once, that he should focus solely on the economy.
Believe me - we know that the economy and healthcare are inextricably linked. Here's the statistics, Tavis, that I think illustrates it better than anything else. There are more cars today built in Ontario, Canada, than there are in Michigan. That was never the case before. And the automakers will tell you that they're not going there because of taxes or regulation or anything like that.
They're going there because of healthcare. Canada provides that; we do not. We put the whole burden on industry. It's not fair, it's not competitive. So that is an issue for the economy, and that's one of the things that we talked about today.
Tavis: And never mind the conversation that happened today, and I want to hear more about it, about what this healthcare summit meeting was, the first one outside the White House. We all recall that last week the president convened the first meeting of the health summit inside the White House. This one, the first one, outside, in the Midwest.
Tell me about that more in just a second. But it seems to me that to your point, this has to be one of the driving reasons behind getting health insurance for all Americans, and yet you have to admit, this summit meeting notwithstanding earlier today, this may very well be the most difficult issue Mr. Obama has tackled.
He won't be the first president to try to do something about healthcare. This is not going to be easy.
Granholm: I don't think it is going to be easy, but here's the difference, I think, is that the stars are aligning a bit. When this was tried under the Clinton administration, you had the chamber of commerce and others opposing it, and now they are realizing that they can't compete globally unless they have a uniquely American solution to the cost of healthcare.
In the United States, Tavis, an average family who is insured pays almost $1,000 a year to subsidize those who are not insured. It's not as though people aren't getting cared for. It's not as though people aren't getting sick and needing coverage. The question is, can we shake the blanket and do this rationally and have everybody bear a bit of the responsibility - business, government, and the individual.
So this is what we talked about today in our healthcare forum in the Midwest, and I do think that this link between the economy and healthcare and the need to make sure that we do this in a rational way is going to be one of the reasons why the stars are aligning and we get places like the chamber of commerce, entities like the chamber of commerce, on board.
Tavis: Tell me that you are hopeful that the city of Detroit can survive another stat - I don't usually rely on a bunch of statistics, but actually -
Granholm: Don't hurt my city of Detroit, now.
Tavis: No, believe me, I love Motown, and by the way, this is the 50th anniversary, as you know, of Motown - the music Motown. I love it.
Granholm: I know.
Tavis: But I read this stat and I wrote this down because I wanted to make sure I got the number right, because again, it's shocking. The average price for a single-family home in Detroit in early this year, early 2009 - $6,035. The average price of a single-family home, just over $6,000. One in five homes in Detroit sits vacant.
I love the city, I want it to survive, but how is Detroit, the biggest city in your state, going to pull through this?
Granholm: Well, here's the chance - and we have a mayoral election, as you know, that is under way right now. And so for smart land use planning, we've got a whole initiative, for example, around urban farming, urban gardens, and making sure that we have - Detroit's a city that was built for two million people and we now have less than one million in the city of Detroit.
Lots of space. Lots of that prime commodity, which is land. If you have smart land use planning and you assemble it and you use it for job creation or for creating great quality of life, there's an opportunity. Six thousand dollars or even a little bit - it depends on where you go. You can get some tax-forfeited properties for a lot less than that, and of course there's some beautiful neighborhoods which are a lot more than that.
But if we could attract some of those urban pioneers back into town, those young people who are graduating from University of Michigan or Wayne State University and who can come and help build the next city, that's really what we want to do is to give people a sense of ownership and of coming back in to build a great city with great bones and great people who've just undergone a really rough patch now because of the auto industry, which is what the genesis of Detroit and its success was so much about.
Tavis: Well, I'm always delighted to have you on, and you should know that I'm going to keep you high up on my prayer list. (Laughs)
Granholm: Appreciate it. Appreciate that. Pray for us all, and we'll be all right. Everybody will be all right. We've just got to get through this, and Lord willing, everything will come out okay.
Tavis: I think you're right about that. Again, thanks for your insight. Always glad to have you on. Jennifer Granholm, the Democratic governor of Michigan. Thank you, Governor.
Granholm: Thanks, Tavis, appreciate it.
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