By on June 12, 2009

GM has bowed to political pressure, deciding that it won’t use taxpayer money to import compact vehicles from China. Instead, Aveo II (a.k.a. the Chevy Viva) will be built at one of three existing GM plants. (Hello, DOE retooling loans!) Up for the contract are Michigan’s Orion Township, Tennessee’s Spring Hill and Wisconsin’s Janesville assembly plants, and GM’s Troy Clarke is meeting with workers and unions from the three locales in order to determine the best site for Viva production. Oh, did I say workers and unions? I meant congressional delegations. Because, in the post Barney Frank-gate environment, “(GM’s choice is) going to be based on pure business decision,” according to Rep. Gary Peters (D-MI). Would Rep. Sander Levin (D-MI) like to clarify? “We’ve been in the front line of pain and we very much believe that one of the factors that should be taken into account is the impact of other decisions,” Levin tells the DetN. Gosh, that sounds almost . . . political. Hit the jump to find out which congressional delegation is most likely to build the new generation of GM compacts.

Orion Township—The Michigan Congressional Delegation (3-1)

Similar to “real business,” the political economy rewards those who buy in early. And the Michigan congressional delegation was shuffling political rewards to its home-district auto industry when much of the congress was still funneling student body government contracts towards political contributers. And they’ve got the approach down pat. Rep. Gary Peters (quoted above) indicates that local tax breaks will help GM justify a decision as a “pure business decision,” while Rep. Sander Levin provides the touchy-feely, “feel our pain” rationale. Plus, the Orion Township plant doesn’t shut down production until the Fall. And let’s not forget that the Levin twins are renowned for their spot-welding skills. Orion is by far the front-runner.

Janesville, Wisconsin—The Wisconsin Congressional Delegation (5-1)

Wisconsin Senators Herb Kohl and Russ Feingold and Reps. Tammy Baldwin and Paul Ryan do not have the long record of experience reflexively supporting the auto industry that Michigan’s corps does. On the other hand, Janesville’s plant has 90 years of history, meaning there will be plenty of material for a heart string-tugging PowerPoint presentation. Which makes a difference with these things. Also, as a former truck plant, Janesville could get mucho green kudos for performing the whole truck-to-compact transformation. And we hear that Russ Feingold runs a mean paint shop.

Spring HIll, Tenessee—The Tennessee Congressional Delegation (10-1)

Senator Bob Corker has been a huge fly in the bailout ointment, scuttling the first round of congressional bailout beggary. Ever since, his (and fellow TN senator Lamar Alexander’s) rhetorical commitment to free market principles has been an inconvenient presence that draws legitimacy from the effort to pour billions into GM and Chrysler. Expect this principle to be duly rewarded with a real unwillingness to retool the Spring Hill plant. Oh, wait, it already has been. TN Governor Phil Bredesen has already been told that the only way to make up for his recalcitrant Senators is $200 million. “They don’t care about tax credits and those other kinds of things,” Bredesen tells the Tennessean. “It certainly was a new look for me at how they’re approaching this thing, which is absolutely, ‘Tell me how big of a check you’re going to write.’” Don’t bet that Corker’s efficiency on a stamping press is going to make a difference here.

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31 Comments on “Ask the Best and Brightest: Which Congressional Delegation Will Build the New GM Compact?...”


  • avatar
    psarhjinian

    Before giving GM money, any of these people should have a chat with Dalton McGuinty (or anyone who lives in or around Oshawa, Ontario) about rolling out the red carpet to GM without making job guarantees part of the deal.

    Other than that, I’ll be very interested to see GM build subcompact cars in North America. Considering that no one else does this, it should be fun to witness GM’s cost accountants coping with it.

  • avatar
    long126mike

    Barney Frank-gate

    A Congressman advocating for the interests of the people who elected him (his district) is now considered a “-gate”??

    Hilarious.

  • avatar
    jkross22

    Glad to hear that GM is reviewing plant performance as a key data point for determining which one will be shuttered. Maybe the plant with the least amount of needed retooling?

    Nah, why let common sense or business best practices enter the equation now. After all, we got Barney ‘asking’ GM not to close plants in his district, so let’s just base the spending of millions on the whims of politicians.

    Where does the buck stop with all this? Mr. President?

  • avatar
    CommanderFish

    I’m putting my chips on Orion.

    Tennessee is out for the reasons stated. They’ve been a real thorn in the side to GM this entire time.

    And, as a resident of Janesville, WI, I can tell you that we’re pretty much screwed. State is out of money. City is out of money. The is plant a century old. There’s no stamping facility attached. It was building body-on-frame GMT900′s, so next to none of the tooling is salvageable. I mean, come on, they decided to close Janesville before Arlington for GMT900 production. Some people I know that worked at Janesville and relocated to Arlington actually said that the tooling in Janesville was newer and more advanced. Why would they close Janesville first unless it really is not an ideal location?

    Well, good thing I’m moving to Milwaukee in a couple of months.

  • avatar
    midelectric

    Political considerations have always been a part of where to site a plant. Do you really think huge corporations don’t use the carrot and the stick to extract concessions from state and local governments? There isn’t much reason to scatter plants all over the country otherwise. It’s a great way to build a broader based political constituency to lean on when things like CAFE limits come up for debate in Congress.

    Here in MD, climate and emissions regulation kept dying in committee as the GM plant always threatened to shut down if anything went forward. Only after it shut down anyway (the Astro was discontinued) did any legislation actually get passed.

  • avatar
    Edward Niedermeyer

    long126mike: Could you be more obtuse? The fact that angling for his constituents is part of Barney’s job is EXACTLY why he shouldn’t be involved in the business. And all you have to add to this discussion is a Grover Norquist-shaped straw man. You really think that “representing the people who got you elected” is going to turn GM around? Because turning GM around is in the taxpayer’s interest. Remember?

  • avatar
    ruckover

    Edward Niedermeyer,
    I believe that, far from being obtuse, all 126 was commenting on was the use of “-gate.” This is a suffix that is associated with illegal governmental activities. While none of the actions in this article seem to be for the benefit of GM’s long term survival, I believe the actions are legal.

    By the way, my favorite use of “obtuse” was in the Shawshank Redemption.

  • avatar

    I thought we already established that it was going to be a Pelosimobile.

  • avatar
    Edward Niedermeyer

    ruckover: Ok. I was under the impression that the “serious crimes” implications of the -gate suffix had long since been cliched to death. Maybe it’s my tender age talking, but -gate has always seemed like code for “political kerfluffle that will be blown out of proportion then forgotten within weeks.” My reaction to 126′s comment was based on an accumulation of his comments…

  • avatar
    oboylepr

    Here in MD, climate and emissions regulation kept dying in committee as the GM plant always threatened to shut down if anything went forward. Only after it shut down anyway (the Astro was discontinued) did any legislation actually get passed.

    So lets see then, not only was (is) the Astro the worst piece of unmitigated crap ever rolled out on 4 wheels but now you tell me it also held up clean air efforts in MD! Why am I not surprised?

  • avatar
    guyincognito

    @ long126mike:

    Perhaps Barney’s actions to support his constituents are part of his job and he’s not doing anything illegal, but it is certainly a conflict of interest to be campaigning for the interests of your district while also controlling the money being used to prop up GM for the good of the Taxpayer population. To quote Homer Simpson, “if there was a law, it would be against it”.

  • avatar
    guyincognito

    Also, psarhjinian +1. I would love to see the business case for building a subcompact in NA.

  • avatar
    ruckover

    Edward,
    since the mirror tells me that my tender years are a distant memory, I am a purist, and I still associate “gate” with Nixon and his crew.

    Ah, “an accumulation of his comments” conundrum. This is a concern, for it often leads us to make hasty conclusions about what is written instead of focusing on what is actually written. I have this problem too often as a reader.

  • avatar
    Redbarchetta

    I would love to see the business case for building a subcompact in NA.

    I think someone like Honda could make that work, and I know GM is far from Honda in efficient vehicle assembly. THe Fit we get here is made in Japan and not in Korea like the Aveo. Japan can’t be that much cheaper than building here, they don’t exactly pay them peanuts. Plus with high enough production number and exporting them to other markets it could make business sense.

    Now for GM the only way they could make that work is with the DOE free loan money to make the upfront costs almost go away. My money is on Janesville if they have any business sense at all. I still don’t think GM is going to make this work in the long run, they always screw the small car formula up, overly optimistic and/or delivering to little. The same people who made the bad decision before are making the decision now with a little political arm twisting to manipulate any good planning.

  • avatar
    AnalogKid

    The people here who are pushing this “GM destroyed by political medddling” meme are not particularly well informed about how the government interacts with industry. Lobbying against base closings and for siting defense plants in Congressional districts is quite common. Having plants compete to build a plane or tank is no different than figuring out which GM plant will build a certain car.

    Even with the political “meddling” our defense industry is the most advanced in the world.

  • avatar
    long126mike

    Perhaps Barney’s actions to support his constituents are part of his job and he’s not doing anything illegal, but it is certainly a conflict of interest to be campaigning for the interests of your district while also controlling the money being used to prop up GM for the good of the Taxpayer population. To quote Homer Simpson, “if there was a law, it would be against it”.

    I think technically the equity stake was purchased with TARP funds, so Obama made that decision.

    As for it being “illegal”? Come on. This is what members of Congress do. House members stand up for their district first, then their state. Senate members stand up for their state first, then their country. The president alone is there to look out for the country’s interest as a whole.

    If we used your logic, then members of Congress could never advocate for their districts in anything that is touched by Federal money which Congress authorized spending, which, directly or indirectly, pretty much everything.

    Trying to make this partisan is absurd. I’ve seen my state’s delegation, across party lines, fight against plant closings all the time. It’s always been like that, and I’m glad it is like that.

  • avatar
    Gregg

    According to LeftLaneNews.com the General told the volunteer state that it would cost them $200 mil in tax incentives and Sen. Corker’s head on a stick to have Spring Hill reopened. I’m paraphrasing.

  • avatar
    geeber

    AnalogKid: Lobbying against base closings and for siting defense plants in Congressional districts is quite common.

    The problem is that keeping a plant or plants open will conflict with the ultimate goal of making GM into profitable enterprise that can stand on its own. Turning it into some sort of government-owned jobs program that happens to make new vehicles isn’t going to help GM compete. If anything, it will hinder its ability to compete.

    AnalogKid: Even with the political “meddling” our defense industry is the most advanced in the world.

    Our defense industry has a captive customer – the federal government – that has a vested interest in making sure the companies supplying the weapons and technology can turn a profit.

    Completely different scenario from the auto industry, which produces a consumer good that a fickle audience may or may not buy. This audience really doesn’t care if the price of a new car is too low for the manufacturer to turn a profit.

    It’s up to the manufacturer to build the vehicles people want and figure out how to turn a profit at the price that the customer wants to pay.

    Now, the federal government certainly wants GM to turn a profit, but it cannot control what customers ultimately buy. Customers are still free to buy Hondas, Toyotas, Fords, Kias, BMWs or Nissans. The defense sector doesn’t face that type of competition.

    long126mike: Trying to make this partisan is absurd. I’ve seen my state’s delegation, across party lines, fight against plant closings all the time. It’s always been like that, and I’m glad it is like that.

    The difference is, because most companies aren’t directly owned by the same government that is protesting a plant closure or job reduction, management is free to listen to the protests, pay them lip service, and then ignore them if they choose to do so. Which is as it should be.

    This is highly unlikely to happen in this case, considering that the federal government owns a hefty chunk of GM.

    You’re right that Rep. Frank (and other representatives) are free to protest this. What concerns me is what happens later…because these protests now carry considerably more weight with GM (and Chrysler).

  • avatar
    Geo. Levecque

    GM has tried a few times before to make a good quality small car and has failed in many ways, one wonders why they even try?
    Also the Governments (us) who are funding these two Companies should make sure that money is spent wisely in both design and function of any small Car, otherwise it will be just money down the Toilet,
    The site chosen should be modern enough to be able to produce any product that GM wants, if small cars don’t out, try something else!

  • avatar
    long126mike

    He’s not making it partisan, but you sure are.

    You’re becoming tedious. It’s part of the half dozen “lib poster children” put through rotation. Frank is doing nothing that any other member of Congress can and will do. But because it’s one of the “chosen few Dems to hate,” we keep hearing about him specifically.

    After June 1, Lamar Alexander came out to lobby for GM plants in his state. How come there was no coverage of that? Did I miss the “Lamar Alexander-gate”?

    No, but I did see a post about him speaking favorably about his “plan” to distribute GM shares to taxpayers.

    Fancy that.

  • avatar
    long126mike

    ZOMG – it’s Kay Bailey Hutchison-gate!

    “May 21, 2009

    Senator Kay Bailey Hutchison is working to give Chrysler dealers who were told to shutdown by the company more time to dump inventory.

    The Dallas Business Journal reports Senator Hutchison introduced an amendment that will buy some time for Chrysler dealerships across the country, including eight in North Texas.”

    http://www.nbcdfw.com/news/business/Hutchison-Works-to-Give-Chrysler-Dealers-More-Time.html

  • avatar
    George B

    Attempting to make GM subcompacts in the US is all about keeping appearances, not actual business, so only Orion makes sense. Due to proximity to other plants, it could be recycled into a larger car or truck plant after the subcompact fails in the marketplace.

    Janesville Plant. Museum or warehouse?

    I could see Spring Hill being sold to Nissan. Fits the Nashville geographic theme and is sufficiently rural and southern to fit the transplant pattern of plant locations.

    At least Sen. Hutchison isn’t trying to overturn the decision to close Chrysler dealerships and she used relatively transparent legislative means in her attempted delay. Her amendment would have given the dealers an extra 60 days to sell off inventory of Chrysler cars and trucks, but they would be closed long before the 2010 models come out. Everything must go by June 9th was a very aggressive shut down schedule.

  • avatar
    jkross22

    @long126mike:

    I’m sorry that I upset you. That wasn’t my intent.

    Let me clarify: This thread maps back to a story containing statements discussing how Barney Frank wants GM to restructure, just so long as it doesn’t impact anything in his home state. As chairman of the committee that has oversight over the bailout program, this smacks of many things that are wrong with gov’t. It is one thing to look out for your constituents, and quite another to do so with the conflict of interest problem Frank has.

    Again, the fact that you cannot recognize this conflict of interest displays the very partisanship you accuse others of having.

    … or maybe that’s just me being detail oriented.

  • avatar
    quasimondo

    So first we criticize GM for planning to build their next compact car outside of the U.S., sacrificing American jobs.

    Now we criticize GM for building their next compact car in the U.S., saving American jobs.

    My clairvoyant muse predicts that we’ll criticize GM next for building a compact car, and if GM decides to cancel the project, we’ll criticize them for doing that too.

    It makes me wonder if there is a point to these criticisms, or if we’re just lashing out at them for the sake of it.

  • avatar
    The Walking Eye

    @quasimondo: Yep, cause ‘murican jobs are better so long they’re not UAW.

    Yep, cause it’s too goddamned expensive to build anything here with the UAW, so why should we even bother.

    Yep, cause they’ve never done it right so why the hell would the get it right this time?

    Yep, cause they need to be competitive in the small car segment or they’ll never be profitable.

    Yep, cause if they listened to us, all their problems would be solved.

    Yep, cause they can’t do a fucking thing right, ever, and we’re never gonna let them forget it.

    Damned if you do, damned if you don’t, it seems.

    Don’t let the nattering nabobs of negativity get you down or angry. Just smile and nod and make them that much more angry. :)

  • avatar
    John Horner

    For all of you who profess to hate politics and politicians, don’t forget that politics is the alternative to anarchy and/or warfare.

  • avatar
    agenthex

    It’s pretty unhealthy to be unable to acknowledge facts, but that’s the jumping off point for the extreme left and right.

    He’s actually presented quite a few relevant facts for deniers. They got ignored pretty quickly. Speaking of dodging points, I don’t think I will get a reply to the absolutely correct assertion that backwards traditionalists are generally known to avoid evidence of new changes to the world.

    -
    Many in discussion above pretty much assumes the decision will be entirely political. Of course it has no actual evidence of this, which is typical of the usual conservative innuendo, like with the whole Herb Moses deal.

    People also seem to assume that corporate decision making is magically free of politics. I can only assume it’s because they’ve completely ignorant of corporate life.

  • avatar
    BlisterInTheSun

    @ agenthex
    “…I don’t think I will get a reply to the absolutely correct assertion that backwards traditionalists are generally known to avoid evidence of new changes to the world.”

    Frank Herbert once wrote that the definition of a conservative was someone who thinks the past is better than any possible future.

    Conversely, Herbert also said that a liberal was simply a closet aristocrat.

    And that’s why I like cars.

  • avatar
    shaker

    BlisterInTheSun : “And that’s why I like cars”

    Saw what you did there! :-)

    I think that the “Watchful Opposition’s” place in this is to make certain that the best decision is made for the nation; that the most modern and flexible plant, requiring the least investment is chosen, giving GM the greatest opportunity to repay its debt to the taxpayers.

    If it doesn’t pan out, well, times are tough.

  • avatar
    Greg Locock

    Edward – don’t ever become a bookie. You are giving money away at those odds! (simple example, put a dollar on each, more complex answer I’ll leave to the real gamblers).

  • avatar
    JohnHowardOxley

    @ John Horner:

    Political life in the Western Hemisphere has become so disgustingly corrupt and base that anarchy or warfare are starting to look somewhat attractive in comparison….

    And imagine what cars anarchists could build!


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