This is the week in which Detroit's auto industry is likely to find out its future. Or more precisely, whether it is going to have one. The heads of the Big Three are due back before Congress. They are supposed to come up with a plan that will justify a skeptical Congress giving them a "bailout," or, more likely, something like a bridge loan to enable them to survive for a few more months.
You may remember the Big Three showed up in D.C. a few weeks ago, in what turned out to be an unmitigated PR disaster. In case you happened to be in the salt mines that week, here's what happened: The leaders of the Not-So-Big-Three flew in on their individual corporate jets. They appeared before Congress and failed to explain how they planned to save their companies, or even what they would do with the $25 billion they wanted.
They didn't seem to know, though they did know they were unwilling to give up their corporate jets. Just in case Congress didn't get how arrogant and stupid they were, Ford's Alan Mulally defended his $21 million-a-year compensation package. Take a dollar a year until his company was profitable again, as Lee Iacocca did at Chrysler? No way!
The auto heads were sent packing, presumably because having them shot on the spot was still illegal, even in Washington. The imperial CEOs will try again this week, possibly without being carried into the Capitol on sedan chairs this time. My guess is that they will be helped out somehow, in spite of themselves.
Congress will bail them out, not to reward the Rick Wagoners for decades of bad decisions, but to avoid the millions of jobs lost almost overnight if they do go bankrupt. But this isn't a done deal.
The automakers are going to have to present a concrete and sensible plan that explains how they intend to get prosperous again. If they can do that, our lawmakers may give them, or at least General Motors, enough to make it through a few months, long enough for the new administration to settle in.
Long enough, too, to see if they are living up to their promises, and to see whether there are any glimmers of hope that they may actually be on the path to breathing on their own. What we all have to realize, however, is that even under a best-case scenario, the automakers are going to shrink even more. There will be fewer and fewer auto jobs, and fewer Michigan jobs in general over the next few years.
Newsweek's Keith Naughton thinks the best hope for Detroit would be to merge Chrysler, Ford and GM into a single company. That might work. Might even be necessary, though it would mean losing tens of thousands more jobs. Last week I talked to Stephen Geskey, who is director of Michigan's Unemployment Insurance Agency. Not surprisingly, the fund is broke. They've had to borrow almost half a billion dollars from the feds to pay claims. Employers are going to have to pay more into the fund next year, but claims are expected to continue to grow.
Which gave me an idea: Why not create something like the old New Deal, which put millions to work doing everything from building post offices to writing nature guides. Ours would be more limited, however; we could call it the Michigan Infrastructure Corps. We are going to be paying out billions in unemployment insurance anyway. So, why shouldn't we get something out if it?
We have tons of unemployed skilled workers, including engineers and construction specialists. We have roads that look like they've been shelled by enemy artillery. We have bridges dropping concrete. Parts of Detroit's sewer system date back to the Civil War. We have loads of buildings that need demolishing.
Think of how greatly we could benefit from my Michigan Infrastructure Corps. Yes, it would cost money. But so does unemployment insurance. Having a crumbling public sector costs in other ways. Those hung up on labels may say this would mean bringing "socialism" to our economy.
You could say that. You could also say that about the Army. We could easily structure this so that it doesn't compete with the private sector, which doesn't seem to have any jobs to offer right now. Once the economy rebounded, we could abandon the public works program. If a shot of temporary "socialism" would help the people and the state of Michigan, I say, let's make the most of it.
Our dwindling dailies: Persistent rumors have been circulating that the Detroit Free Press was on the verge of publishing mainly on the Internet. These were spurred by what appeared to be an offer from the paper itself: Subscribers could get the paper on Sundays and Thursdays, and "digital editions" the rest of the time. When retired Free Presser Joel Thurtell reported this on his blog (Joelontheroad.com), he was jumped on by Kwamegate reporter M.L. Elrick, who has become a sort of management bulldog.
"Joel, we've been told that the new plan does not eliminate daily publication of the paper," he proclaimed.
Actually, I hope that Mike Elrick is right, though he probably doesn't know any more than we do. As Thurtell noted, management also assured everyone that the community Free Press editions weren't being eliminated. Then they eliminated them.
These are tough times for newspapers all over. Well, almost all over. There is a wonderful website called Gannett Blog (gannettblog.blogspot.com), which is run by retired Gannettoid Jim Hopkins. He managed to get hold of an internal Gannett report from a year ago that showed that most of the company's newspapers were making enormous profits.
Green Bay, for example, had a 42.5 percent profit margin, something unheard of in almost any other industry. Gannett made good money in most of its papers in Michigan last year too. Port Huron's profit was 17.6 percent; Battle Creek, 13 percent; Lansing 23.2 percent. But the picture was different in Detroit, where the company lost almost 5 percent, on ad sales of $164.8 million.
Undoubtedly the picture is worse this year. Still, the most loyal newspaper readers are older people who do not like reading their paper on the Internet. My sister-in-law, for example, is a loyal Free Press reader in her 60s. "That's my paper!" she told me at Thanksgiving dinner. "But I won't read it on the Internet."
If the Freep does largely disappear into cyberspace, it won't be the first area property to do so. Thirty years ago, the Daily Tribune of Royal Oak was a thick, prosperous small daily with circulation of 55,000. Since then, it has been raped and trashed by a succession of bad owners, the worst of which are the current lot, the financially ill Journal-Register Co., known as JRC.
Last week, it announced the Tribune would publish a print version only four days a week. This may hardly matter; there are only 9,200 subscribers left. Earlier this month, the troubled JRC laid off most of the Tribune's remaining staffers, and moved the rest out of Royal Oak and into their building in Mount Clemens.
Democracy can't survive without reporters scrabbling around, especially on the local level, keeping the movers and shakers honest. We're moving toward a society that has a lot less of that, and we are going to pay for it, more heavily than we can imagine.
But hey! We'll have our consolations. How bout dem Lions!
Jack Lessenberry opines weekly for Metro Times. Contact him at [email protected]
