Michigan Governor Jennifer Granholm Describes How Her State Is Weathering The Rough Economy
Friday, October 17, 2008SUZANNE PRATT: The housing recession has put tremendous pressure on the state of Michigan, which has already lost thousands of manufacturing jobs as the auto industry continues to struggle. Earlier today, I spoke with Michigan Governor Jennifer Granholm about the state's economy. I began by asking her how Michigan's economy compares to the rest of the U.S.
GOV. JENNIFER GRANHOLM, (D) MICHIGAN: We're sort of a leading indicator, I would say, Suzanne, because we've been experienced seeing contraction in our economy since frankly, about the year 2000, because of the disproportionate manufacturing sector that has an impact on our economy. In fact, since the year 2000, we've lost about 400,000 jobs, which has been extremely devastating to our -- to our entire state. That's housing, that's consumer confidence, obviously. That means a lot to every day citizens. So we're certainly watching and I know are going to participate in great numbers with this presidential race because it means a lot to people on the ground here.
PRATT: Uh-huh. What about the effects of the credit markets? Have you seen that conditions in the economy in Michigan have gotten worse, significantly worse in the last few weeks?
GRANHOLM: Well, it clearly, because one of the biggest purchases that citizens can make is a vehicle and we're the automotive capital of the world. When citizens across the country or in Michigan can't purchase because they don't have access to credit, that hurts us, frankly, disproportionately. Obviously loosening up credit across-the-board, whether it's consumer goods or mortgage industry will be beneficial to the economy as a whole. But we sure as heck have seen it. The foreclosure rate here is unbelievably high. You know, this -- this current economy, both short term and long term, we are the poster child of why we need change, frankly.
PRATT: Clearly, as you mentioned, much of Michigan's economic woes are tied to the fate of the auto industry. What about a merger, what would a merger do to the state, do you think?
GRANHOLM: Well, as you know, mergers usually represent job loss. And since both of these headquarters of these two storied, proud companies are in Michigan, we are fearful that a merger would mean more job loss. And that is the last thing we need. Now a merger could mean opportunity too, if it means consolidations, especially if consolidations occur from somewhere else in to Michigan. But the reality is, a merger does not necessarily bode well for the level of employment in Michigan. And that's really what most of us here are most concerned about.
PRATT: Do you think a bankruptcy of GM or Chrysler would be a better option, actually?
GRANHOLM: No, no, no, absolutely not and clearly we don't want to see bankruptcies either. And I don't -- that's not going to happen. I feel very confident that the leadership, both Bob Nardelli and Rick Wagoner, the head of Chrysler and GM are both taking the steps that they need to take to make sure that they have liquidity, to make sure that they have access to capital. Clearly the effect of the loan guarantee for the first tranche (ph) of that $25 billion that was approved by Congress two weeks ago is very important for these auto makers to be able to convert to make the vehicles that will be much more fuel efficient in the future. That's all very important. But we need a big injection of consumer confidence. And frankly, I encourage people to buy stock right now for GM and Chrysler and other American made products so that we can get this economy back on track. That's obviously not the only thing that needs to what. But I think we do need some significant increase in consumer confidence.
PRATT: Governor, I know that you have launched a number of initiatives to attract new businesses to Michigan and to generate jobs because you have the highest jobless rate in the country. How are those initiatives going?
GRANHOLM: Our whole focus has been on creating jobs and our motto is I'm going to go anywhere and do anything to bring jobs to Michigan, but really about diversification of our economy given our disproportionate focus on manufacturing which we love. But we have securitized our tobacco settlement money to create a $2 billion tenure initiative to invest in companies who are willing to come and grow jobs in Michigan. We have focused on an energy sector. I just signed a big energy bill into law. We've added the most robust film credits in the nation to add a film sector. We've invested more than we ever have before in marketing Michigan for tourism because we have this phenomenal story to tell, these great natural resources. We especially are focused though at the moment on energy because of the synergy between fuel efficient vehicles, materials, the battery technology, renewable energy and what we've got here in Michigan as a natural asset which is our wind, our water, the forests that we have in Michigan.
PRATT: I think we have to leave it there. Thank you so much for joining us.
GRANHOLM: You bet, thank you.
PRATT: My guest, Michigan Governor Jennifer Granholm.
