November 19, 2008
Returns from Middle East jobs mission to help make case in D.C.
LANSING - Governor Jennifer M. Granholm today joined several of her fellow governors in calling on congressional leaders to approve loans for the domestic automobile industry. The governor said approval of the loans is critical to the country's economy, energy independence, and national security.
The governor also announced that she returned early from her jobs mission to the Middle East early so she can be in Washington, D.C. on Thursday to help argue the need for quick action.
"Because a bankruptcy in the auto industry during these troubling economic times would be crippling in efforts to immediately grow the economy, and because U.S. auto makers will be a critical component in developing an alternative energy industry in America, we urge Congress to pass this legislation immediately," the governors wrote. "We believe an agreement that makes loans available to the auto industry should protect the taxpayers - recipients should repay loans in a timely manner, craft a plan for long-term financial viability, and meet appropriate standards for executive compensation and governance. Passing this legislation now will protect millions of jobs - in a myriad of industries - across the country."
The governors emphasized that the auto industry intends to restructure to build the next generation of energy efficient and low-carbon vehicles but needs bridge loans in the immediate future to survive. Once the industry's immediate financial needs are met, the companies can then return to building the cars that will help the United States achieve energy independence. They noted that we must build fuel-efficient vehicles in the United States to achieve energy independence, which will directly affect national security.
Granholm has argued that beyond the massive job loss - in the United States, the U.S. automakers directly employ almost 240,000 people while another 730,000 are employed by component parts suppliers - Congress and the Bush administration need to provide immediate assistance to the auto industry, because America's energy independence is dependent upon it.
The governor explained that currently, most batteries come from Asia and most oil comes from the Middle East. Refusing to help the U.S. automakers compete in this critical race to develop new battery technology means the nation will forever be dependent on other countries to meet our energy needs. Abandoning efforts to create energy independence puts our national security at risk as well. The Department of Defense (DOD) Science Board Task Force has determined that reducing military fuel demand is a national defense priority.
According to the DOD, the military's dependence on foreign oil increases risks, degrades operational capability, and compromises mission success. "Made in America" advanced battery technology and electric military vehicles would reduce fuel demand and cost, afford tactical flexibility, and decrease operational risks.
"It is a national-security, energy-security imperative to produce advanced batteries and next-generation biofuels here at home," Granholm said. "Supporting the automotive industry through the current crisis and steering a clear transition to a low-carbon future will create millions of middle-class jobs that are vital to a strong economy while reinvigorating American technological superiority."
Some estimates indicate that nearly 1 in 10 American jobs depend, in some way, on the auto industry. A total of two million employees, retirees, and dependents rely on automakers for health care benefits. The Center for Automotive Research recently reported that if one of the Detroit Three automakers ceased operations in 2009, nearly 2.5 million jobs would be lost in the first year alone. In addition, the first year of a bankruptcy would result in a loss of $125 billion in personal income, $17 billion in Social Security receipts, and $20 billion in personal income taxes.
The governor's departure from the Middle East came at the end of a day when she had an audience with His Majesty King Abdullah II, where they discussed ways Jordan and Michigan can work together to advance alternative energy and water reuse technologies, and a meeting with executives from Millennium Energy Industries, a global solar solutions company operating in the Middle East and North Africa.
Members of Michigan's economic development team will continue their scheduled meeting with companies considering investment in Michigan.
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