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Interview with Jennifer Granholm

Interview with Jennifer Granholm

The Situation Room - March 30, 2009

BLITZER: Part of the deal announced today with auto giant GM isn't sitting well with Michigan's governor, even though she's fought very hard for federal help. The governor, Jennifer Granholm, calls her state ground zero for the loss of manufacturing jobs in the United States. She's joining us live.

Governor, thanks very much for coming in.

GOV. JENNIFER GRANHOLM (D), MICHIGAN: You bet. Thanks, Wolf. BLITZER: You called the firing, in effect, of Rick Wagoner a sacrificial lamb. That's what you called him. Do you disagree with the president's decision to get rid of him?

GRANHOLM: Well, I understand the desire to have a fresh start, and I think Rick Wagoner would be the first to say that this really isn't about him. This is all about the industry and making sure we have a viable industry. And frankly, it's about those great automotive workers that you heard from in the plant coming out in Warren today, the people who have been building those cars and hopefully will be building the car of the future.

And Wolf, you know, in the president's remarks today I, and I think a lot of people in Michigan, took great comfort in the fact that he said that the government was going to stand behind the future of the auto industry. And that, for us, is good news.

BLITZER: And the government would also guarantee those warranties. I want to get to that in a moment.

Here is the exchange I had with Rick Wagoner when I interviewed him here in THE SITUATION ROOM on December 4th. And I asked him if he was going to stay put or leave.

Listen to this.

(BEGIN VIDEO CLIP)

RICK WAGONER, CEO, GM: The reason I have my job is because our board thinks we've been talking on very tough issues, and really some of the structural issues that have been around the company for years and years and years. And I don't have a golden parachute, I don't have an employment contract. I serve at their pleasure, and I'll continue to serve at their pleasure.

BLITZER: So you're staying put?

WAGONER: Well, yes, sure. That's my plan. I mean, as long as the board wants me to stay put. If they tell me no, then I'll go.

(END VIDEO CLIP)

BLITZER: It wasn't the board that told him to go away, it was the White House.

GRANHOLM: And you know what, Wolf? Here's what he was trying to say, I think, is that General Motors -- I mean, last year, they got the Motor trend Car of the Year, they got the J.D. Powers Car of the Year, they got the Green Car of the Year. They've been in the middle of this massive restructuring effort.

We are ground zero for the restructuring in the auto industry. This year -- as of right now, we will have lost as a state 600,000 jobs, largely related to automotive manufacturing.

So the point is that they have been undertaking all of these steps, and they will continue to do what is necessary to survive. But for us, we want to look forward at a vibrant automotive industry, a vibrant manufacturing sector in this country where we manufacture cars in this country and not necessarily just overseas.

BLITZER: Did the White House simply inform you that Wagoner was going to be gone, or did they consult with you in advance?

GRANHOLM: No, they didn't consult with me about Rick Wagoner. I've been talking with them and beating the halls of the Treasury and burning up the phone lines about making sure that whatever is done, that there is a response for communities and families and people. And that's what I was pleased to hear, that the president looked us in the eye and said, I will fight for you. I understand how important it is to fight for communities where jobs have left and bring in new sectors, and make sure that there's a safety net for those who want to be retrained to move into those new jobs.

When he appointed Dr. Ed Montgomery (ph), which is what he did today, what he is saying is that there is going to be an advocate for all of these communities inside the White House for making sure that they are able to survive and thrive in the future. So that was very good news for us.

BLITZER: The White House, including the president, clearly leaving open the possibility of some sort of structured, orderly bankruptcy for GM and for Chrysler, if necessary, and they're saying -- they're leaving it open by saying, you know what? The federal government could make sure those warranties, the people buying a GM car or a Chrysler car, that they wouldn't have to worry about the warranties being useful. They're leaving that open for some sort of structured reorganization, if you will.

Are you OK with that?

GRANHOLM: Well, I've never -- I think that bankruptcy is a last resort. And what I did hear him say today, though, Wolf, is that whatever happens, they're not interested in a bankruptcy where they liquidate, where the company goes away and the jobs go away.

What they're committed to is a viable auto industry. And they're giving us -- giving the companies between now and 30 or 60 days from now, the ability to complete the reorganization plans. I think that they've had trouble, the companies, getting all of the stakeholders to the table and having them make the concessions that are necessary.

BLITZER: Because it sounds to me like some sort of bankruptcy would be an opportunity for GM and Chrysler to renegotiate their contracts with the United Autoworkers and start paying some of those men and women on the assembly plants and elsewhere a lot less money.

GRANHOLM: I don't think that that's really what it is. I mean, the UAW has provided significant concessions. Their starting wages now are half what they were before.

They've got this whole voluntary employee benefits association where they've offloaded all of their health care costs, they've eliminated the jobs bank. I think, frankly, many of the concessions have to do with the rest of the creditors that they've got to get to the table, including the bondholders.

But the bottom line is, I think that they are saying that bankruptcy is the last resort, and that's why they're giving them this extra amount of time to complete the job of reorganization, because truly, Wolf, how do you support -- how do you buy cars when a company has gone bankrupt? And that's really the -- that's what they need to wrap this around.

You've got to create demand for the American automobile. And when the president said we're going to guarantee the warrantees, we're going to make sure you can deduct the sales tax from when you purchase a vehicle, and we're going to ask Congress to help out with this cash for clunkers idea, where you can turn in an old vehicle and hopefully get a new, efficient one that's made in the United States, all of that is about job creation here and creating demand here.

BLITZER: We've got to leave it there.

Governor, good luck.

GRANHOLM: Thanks, Wolf.

The Situation Room

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