Monday, October 24, 2005

Governor asks for federal focus on auto industry

By Kathy Barks Hoffman / Associated Press

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LANSING, Mich. -- Gov. Jennifer Granholm has sent a letter to Michigan's congressional delegation asking for more focus by the federal government on the troubled domestic auto industry and its suppliers.

"I have, in recent days, had conversations with the leadership of the Big Three automakers and the United Auto Workers union, and they share my sense of urgency about the need for federal involvement with the serious problems confronting their industry," Granholm wrote in the letter sent Friday. She plans to hold a late-morning news conference Monday to discuss what the federal government could do to help manufacturers.

Granholm's appeal comes just days after General Motors Corp. and the UAW struck a tentative agreement to have GM retirees represented by the union pay a portion of their health care premiums for the first time ever. Active hourly workers would pay more for their prescription drugs and defer $1 an hour in future pay increases to help pay for retirees' health care.

Officials at Ford Motor Co. and DaimlerChrysler AG's Chrysler Group have said they'll ask the UAW for similar help to cover health care benefits.

U.S. Sen. Hillary Rodham Clinton, D-N.Y., noting that "the crisis facing auto makers and their suppliers is of such significance that it ... demands the attention and focus of our national leaders," urged President Bush on Thursday to convene a national auto industry summit to look at issues such as health care and pension costs, fuel efficiency and foreign competition.

Granholm's letter asked Michigan's congressional delegation to support a bipartisan, cooperative effort "to urge the White House to take action -- both through its executive powers and its ability to work closely with Congress -- to swiftly enact policies that will positively impact the nation's manufacturing sector."

Among other suggestions, she called for the federal government to:

--Relieve U.S. manufacturers of the burden of high health care costs by creating a catastrophic insurance pool, doubling federal spending on preventative care and wellness initiatives and making significant investments in health information technology.

--Make sure companies' pension promises are kept by having changes in federal pension policy support companies trying to maintain their pension plans and encourage companies with underfunded pension plans to recover, not force them to end those pensions.

--Level the playing field for U.S. manufacturers through stronger enforcement of trade laws, appointing a special trade prosecutor, insisting that trading partners end currency manipulation and enforcing and strengthening intellectual property protections.

Granholm noted that many of the state's federal legislators already are working on these issues. U.S. Sen. Debbie Stabenow, for instance, is pushing for the appointment of a special trade prosecutor.

The Democratic governor said she hopes the delegation -- whose two senators, Stabenow and Carl Levin, are Democrats, but whose House delegation has nine Republicans and six Democrats -- could work with her to request a meeting with the Republican president.

"I believe our united action will also stimulate the governors and congressional delegations of other industrial states to call for needed federal actions," she wrote.

GM officials said they plan to work with the UAW to ask the federal government to help reduce health care costs. The company does not back the union's support for a national health care plan.

The health of the domestic auto industry is of critical importance in Michigan, home to the world headquarters of Ford and GM and to a number of domestic auto suppliers currently having their own financial troubles. Delphi Corp. filed for bankruptcy earlier this month, and both Delphi and Ford are expected to announce plant closings as they fight to stay competitive in the global marketplace.

On the Net:

Gov. Jennifer Granholm: http://www.michigan.gov/gov

General Motors Corp.: http://www.gm.com/

Ford Motor Co.: http://www.ford.com/en/default.htm

DaimlerChrysler AG: http://www.daimlerchrysler.com

United Auto Workers: http://www.uaw.org