One on One with Michigan's Governor, Jennifer Granholm
Monday, July 14, 2008
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SUSIE GHARIB: The turmoil in the financial markets was a hot topic at the annual meeting of the nation's governors this weekend. Michigan's governor, Jennifer Granholm, attended the event in Philadelphia and she joins us now. Governor, welcome to NIGHTLY BUSINESS REPORT.
GOV. JENNIFER GRANHOLM (D), MICHIGAN: Thank you, Susie.
GHARIB: Well, we focused our show so much on the Fannie and Freddie crisis, tell me, what is the trickle down impact of their problem on a state like Michigan?
GRANHOLM: Right, well, all of the states, we have to deal with the implosion in the whole mortgage industry. Obviously Fannie and Freddie hold half of the mortgages. So that affects us. It affects us even though those aren't traditionally the -- there are more traditional loans rather than the subprime loans which many of us are dealing with on the other end. But the bottom line is for the states, we're doing everything we can as governors to be able to negotiate voluntary agreements, to refinance, et cetera. But ultimately we're one, grateful that the Feds have stepped in to make sure that Fannie and Freddie will survive. And two, there is a really important bill that just went through the House and the Senate. And it would allow for additional means for refinancing of these foreclosed homes, additional counselors, at the local level so that people can stay in their homes which ultimately the banks would much prefer them to do if they can refinance in more acceptable terms.
GHARIB: Do you think that that bill and any other efforts will help revive the housing sector in Michigan? Because I know your state has a record number of foreclosures.
GRANHOLM: We do. And we are not alone but certainly the impact when you combine the economy and certainly the restructuring that is happening in the domestic auto industry, and of course General Motors (GM) has another announcement tomorrow, you combine that with the overall efforts to try to clean up some of the subprime lending practices, and the economy, with $4 a gallon gasoline, it is just -- it's a triple-whammy on citizens. And so whatever we can do to allow for people to stay in their homes under more comfortable terms, to freeze the adjustable rate mortgages adjustments, to make sure that people can refinance under terms they can afford is really important to us as governors. And there are a number of governors who have undertaken specific measures to be able to do that. We did in Michigan. It's called "Save the Dream," it is with our Michigan State Housing Development Authority, but we're certainly not alone. Whatever Congress can do to keep people in their homes is something all the governors should be in favor of.
GHARIB: And, Governor, one factor of keeping people in their homes is they have to have the financial wherewithal and jobs to be able to afford it.
GRANHOLM: Right.
GHARIB: What can the state do to keep people in their jobs and from leaving the state, because as you mentioned, the auto industry is really struggling now.
GRANHOLM: Well, sure. We've lost since the year 2000, Michigan alone has lost 400,000 good-paying manufacturing jobs. For me it is all about diversification of this economy. We've had the largest footprint of automotive industry of any state in the country. And we're very proud of that history. But really as they go through this extremely difficult structure change, and have -- are forced to pivot on a dime to respond to $4 gallon gasoline, we've got to bring in jobs that are…
GHARIB: What are you doing…
GRANHOLM: … that enlarge the economy.
GHARIB: What are you doing to get jobs into the state?
GRANHOLM: Well, and so tomorrow, for example, we'll be announcing 14 projects that we are bringing in that add to sectors like alternative energy, which is something that we're really focused on because we believe those workers in the auto industry can be easily trained to do the CNC machining that they are already doing, but to build wind turbines, et cetera, solar, you name it, we are focused on it. In fact, just as a quick response to the $4 a gallon gas, we just announced a cellulosic ethanol plant up in the upper peninsula, Paul, which is going to be taking wood waste and turning into that cellulosic ethanol, creating 700 jobs, but producing fuel at a price that could be as much as half of the price of gas.
GHARIB: All right. Well, it sounds like are you doing the best efforts. We wish you the best of luck, and hope things…
GRANHOLM: Appreciate it.
GHARIB: … turn around for Michigan. Thank you so much for coming on the program.
GRANHOLM: Yes, thank you. You bet.
GHARIB: My guest tonight, Michigan Governor Jennifer Granholm.
