President Obama exits following his address on Monday.

Many of you have been going through tough times for longer than you care to remember.  And I won’t pretend that the tough times are over.  I can’t promise you there isn’t more difficulty to come.  But what I can promise you is this:  I will fight for you.  You’re the reason I’m here today.  I got my start fighting for working families in the shadows of a shuttered steel plant.  I wake up every single day asking myself what can I do to give you and working people all across this country a fair shot at the American Dream. (March 30, 2009)

preface.

“Good, but not good enough.” President Obama emphasized this particular point in yesterday’s address that focused on the administration’s recommendations for the struggling U.S. auto industry. Recall in February, GM and Chrysler both offered to restructure their companies and provide the government with comprehensive plans to stay afloat. After thorough evaluation, Obama’s Auto Task Force decided that the the plans don’t go far enough in attacking the problems plaguing the auto companies and put a date on company restructuring.

The reactions to the administration’s  have varied from agreement to resigned dissent. Unsurprisingly, the Michigan delegation, though voicing support for the plan, is deeply concerned with the possible repercussions of the recommendations on an already struggling state. Rep. John Dingell (D-MI) wrote only today, “I urge the Obama administration to review carefully the progress made by Chrysler and GM in 30 and 60 days, respectively, and give strong consideration to allowing more time for restructuring. The fate of these corporations and their cumulative impact on the national economy are too important to be subjected to an arbitrary deadline” (USA Today).

Is the deadline “arbitrary” and unjustified? There’s obviously multiple perspectives. Take a look at the actual plan and then make your own decision.

content, the bare bones.

A blank slate and working capital for sixty days: this is what Obama offered General Motors on Monday. To clarify, GM leadership has been wiped clean — Rick Wagoner, with the government’s encouragement, is stepping down from Chairman and CEO of GM. Kent Kresa will serve as interim Chairman and current President Fritz Henderson as CEO. The Auto Task Force believes that this fresh slate will help General Motors pursue “aggressive restructuring.” Edward Montgomery, former Deputy Secretary of Labor and Dean of U. Maryland, was also tapped as the Director of Recovery for Auto Communities and Workers (wow, such a long title!). This DRACW — yes, I did just make it acronym, that’s what U of M does to you! — position will be key in getting all parties working together in revitalizing some of the worst hit communities in Michigan and Ohio.

Chrysler, the Auto Task Force determined, is not viable on its own and merger with the Italian car company Fiat would be beneficial in the long run. The government will provide Chrysler thirty days of working capital and will consider loaning up to $6 billion more to assist in the plan’s success, if necessary.  Also, the Obama Administration said all warranties will be honored and a government program will be launched to provided government-funded protection.

For a much more detailed overview:
+ GM Viability Assessment (via whitehouse.gov)
+ Chrysler Viability Assessment (via whitehouse.gov)

thoughts.

I agree with Zach’s (“Et tu, Obama?”)  point on unfairness in standards for the auto industry and Wall Street; many others in the blogosphere have echoed this point as well. It is ridiculously unfair to place such stringent standards on the auto industry while we let Wall Street slip through our fingers. On the same note, maybe the administration realizes this and as a consequence changed its strategy– I really don’t know. Still, it’s very much a double standard (and our dear Governor, Jenny G, agrees). Also, like the Governor mentions in the article, there ought to be incentives that help the Michigan economy heal. We can’t do it by ourselves though. This “restructuring,” while perhaps good for the auto companies in the long run if they work out, is at the cost of many jobs… though I do like the idea of a “blank slate.”

There are only so many band-aids we can put on the Michigan economy before we have to take it to the hospital. These solutions are not just in retraining programs, but also in the diversification in the Michigan economy.  Seriously, there isn’t any point in retraining the soon-to-be unemployed if there aren’t many other strong, viable fields for them to work in. Also, there’s no reason for young college students like us to stay in Michigan after graduation, even though I feel the state government has been trying.

Put on your seatbelt; this could be a long ride.

watch & discuss.

I recommend watching the actual address — too often people jump to conclusions on the basis of secondary source documents and our president really does speak well. If anything, it would be kind of cool if everyone used this thread to discuss and share opinions.

read & discuss.

+ Fact Sheet on the New Path to Viability for GM & Chrysler (via whitehouse.gov)
+ Warrantee Commitment Program Explanation (via whitehouse.gov)
+ Incentives needed to buy American, Granholm says
+ Will Wagoner’s Exit Put GM on the Road to Recovery?
+ Wagoner Didn’t Deserve It
+ Why Not Bank CEOs?
+ Fear and Anger in Michigan (includes Granholm’s MSNBC video)
+ BusinessWeek’s Auto Industry Bailout Special Edition!!!