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Auto aid woes
Cardinal stresses need for quick action on loans
by Robert Delaney of The Michigan Catholic
Published December 19, 2008
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Rebecca Cook | CNS
General Motors auto workers leave the GM powertrain plant in Warren, Mich., Nov. 11. The auto industry has faced huge losses this year and GM in particular has gone through a dramatic reduction of its factory workforce with buyouts and early retirement offers. (CNS photo/Rebecca Cook, Reuters) (Nov. 17, 2008) See ONLINE-ADVICE Nov. 17, 2008. |
Detroit — Cardinal Adam Maida emphasized the need Tuesday for urgent government action to allocate at least enough money to help Detroit’s automakers stay afloat until a more comprehensive assistance package can be worked out in the new year.
“People in households throughout southeast Michigan and all across the country are counting on our lawmakers and leaders to help stabilize the domestic auto industry,” the cardinal said.
There was widespread anticipation President Bush would announce a financial assistance package along the lines of the $14 billion proposal that failed to win Senate approval the previous week. No announcement had been made by The Michigan Catholic’s deadline late Tuesday afternoon, however.
Such a package was expected to reallocate funds previously approved by Congress as part of the Troubled Assets Relief Program, designed to bail out banking and financial firms, or from funds previously authorized to assist the automakers switch to more environmentally friendly production.
Conditions expected to be attached to the loans included mandatory restructuring and acceptance of a “car czar” to oversee fulfillment of the requirements.
Cardinal Maida acknowledged that changes lay ahead for the automakers, but urged they be decided through a collaborative process.
“Whatever restructuring is done within the auto companies, their suppliers, and the ancillary businesses, it needs to involve all the stakeholders. The situation is urgent and the process needs to provide reasonable, negotiated timelines for all of the parties involved,” he said.
The cardinal expressed confidence business and labor leaders in metro Detroit could be counted on “to uphold their part of the bargain and to do the right thing.”
“All others involved in these complicated negotiations, especially those in Washington, D.C., should follow suit for the sake of our community, our country, and beyond,” he added.
Cardinal Maida had joined with other local religious leaders – Christian, Jewish and Muslim – Dec. 4 in urging the federal government to extend a financial aid package to the domestic automakers.
“This is a time to stand in solidarity with all who are suffering loss of jobs or homes, and all those who are anxious about what will happen in the future to the automobile industry in metro Detroit,” he said at the time.
The square-mile General Motors Tech Center is within the boundaries of St. Sylvester Parish in Warren, and parishioners include many current and former employees there and at other nearby plants and offices.
Its pastor, Fr. Gary Schulte, said “fear and confusion” were widespread among his parishioners.
“Many have lost their jobs, and those who are employed are fearful they may lose their jobs,” he said.
He noted that bankruptcy had not been ruled out if the financial aid package somehow fails to come through, and added, “But even if the loans do go through, they wonder whether they will have a job, because it has been acknowledged that more plant closures will be needed.”
Fr. Schulte is a member of Warren’s Church, Police, City Committee, which brings religious leaders, police and city officials together to address issues arising from the economic and financial crisis.
“If bankruptcy were to happen, you’re looking at $10 million to $15 million right out of this year’s city budget,” he said.
Msgr. Anthony Tocco, pastor of St. Hugo of the Hills Parish in Bloomfield Hills, said prayers for the unemployed and underemployed had become a regular part of the Prayers of the People at Mass in recent weeks.
Many high-level auto executives have been members of St. Hugo during the 23 years he has been pastor, including former Chrysler head Lee Iacocca, and former General Motors chiefs Thomas A. Murphy and Richard Gerstenberg. And although none of the current “Big Three” CEOs are members, many parishioners are – or were – employed by the automakers, their suppliers or dealers.
“We’re praying a whole lot, and – along with prayer – we’re adjusting our budget. Our collection is down substantially, and we’re trying to cut by 20 to 30 percent,” he said.
Some parishioners have lost their jobs, and a number of families – especially some of the younger ones who had children in the parish school – have moved out of state to find work, Msgr. Tocco continued.
But other parishioners who own restaurants or other businesses are also experiencing the fallout from the auto industry’s downtown, he added.
Richard Genthe, president of Dick Genthe Chevrolet in Southgate, said the auto industry has already been restructuring, and expressed confidence the automakers would use the “bridge loan” to continue the progress made over the past three years and to accelerate the further changes that had already been planned for the coming three years. Genthe, a member of St. Mary Student Parish in Ann Arbor and chair of the development committee for Sacred Heart Major Seminary, acknowledged feeling “a bit of righteous anger” over the way the auto CEOs were treated when they appeared before congressional hearings on the assistance package.
“I found it absolutely appalling,” he said, adding that the legislators exhibited “a very outdated view” of how far the automakers have come in recent decades and how much their working relationship with the United Auto Workers union has improved.
Genthe said the automakers and their dealers have been adjusting to the change in the mix of vehicles demanded by consumers, such as the change in the balance between cars and trucks.
And he said the difficulty in finding financing for buyers that made headlines in October had eased, primarily because credit unions have stepped in to fill the gap created when many banks restricted their lending.
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