THE AUTOEXTREMIST

November 19, 2008

New Detroit vs. Old Detroit in Washington.

By Peter M. De Lorenzo

Detroit. In the last week I have done several live and taped radio interviews across the country and with the BBC in London, a spirited interview with Diane Tucker appearing in The Huffington Post entitled, “Journalist to GOP: You're 100 Percent Wrong About U.S. Automakers,” and I have several national and international TV appearances slated for the next few days too. The subject? The looming implosion of Detroit, of course. People want to know the who, what, when, where, why of this whole thing, and they want to know about the cost, both in terms of taxpayer money needed and the real cost to the economy if the Detroit automakers don’t receive these bridge loans.

The din out there in the media right now is so anti-Detroit, anti-“bailout” that I welcome the opportunity to present the other side of the debate, even if it appears with each passing day that Detroit is running out of time and unable to break through the negative media clutter that envelopes the industry at every turn. And after that death march of a hearing before the Senate Banking Committee yesterday, I’m even more pessimistic.

When Alan Mulally, Rick Wagoner, Bob Nardelli and Ron Gettelfinger sat down in front of the microphones, I knew it wasn’t going to be good, especially when Peter Morici – the relentlessly self-promoting economics professor from the University of Maryland – sat down next to them (more on him in “On The Table” this week – ed). Which Senator was responsible for inviting him is anyone’s guess, but it was clear that this was a setup from the get go.

We then had to watch as each of these U.S. Senators spewed their particular brand of inaccuracies and flat-out misconceptions about the automobile industry in their opening statements. A very few were actually worth listening to – and I mean like two - while most of the others were so blatantly self-serving and out of touch with reality that it was painful to watch. And then some acted like they were just hatched yesterday and were so resolute in their lack of awareness about what was going on and why they had to be there in the first place that it was simply appalling .

I can’t help but think that when enlightened Americans watched these people in action – the people who were actually elected by us to be in office – that they recoiled in horror at the absolutely stunning lack of knowledge, awareness, sense of place, sense of well, anything that was displayed by these Senators yesterday. Is this really the best we can do? I certainly hope not.

At any rate, the message in that hearing room was clear: Detroit put itself in the shape it finds itself in by building bad, low-tech cars that nobody wants. That they were regurgitating the now-obligatory woeful misperception of Detroit that has spread across the country - a Detroit that hasn’t existed for the better part of a decade, by the way - was obvious. The fact that these Senators weren’t aware of the kind of ultra-competitive products that these companies have out now was predictable. And the fact that they weren’t aware of the kind of leading edge technological development that Detroit is actively engaged in was predictable too.

Being clueless in Washington isn’t all that uncommon, unfortunately, but when misconceptions, half-truths and flat-out lies get hoisted up the flagpole as Fact, then it’s no wonder that the leaders of these Detroit car companies were on the defensive and unable to score points with the judges.

Proof of that was on display yesterday when the senators in that hearing room kept talking about restructuring, as if it was a new-fangled idea that these Detroit CEOs weren’t aware of. And they had to be reminded over and over again that Detroit has been restructuring and revamping since 2000, that Detroit hasn’t been operating in a vacuum, that Detroit does build competitive and class-leading products, that Detroit has pioneered new technologies, that Detroit is a viable, relevant, strategic industry that’s part of the crucial fabric of America’s manufacturing base, that the worst financial crisis in seven decades has wreaked havoc on their ability to do business, and on, and on, and on.

Back when things were booming for the domestic automobile industry, the importance of lobbying in Washington and having a consistent and focused image strategy that presented these companies’ positions and outlined their contributions to the American economy wasn’t a top priority. Now that it is, and the Detroit Three are playing catchup - while taking body blows and backed up against the ropes - the Old Detroit is still slamming the New Detroit to the ground.

The Perception Gap that exists out there for the Detroit automakers isn’t narrowing, it’s actually growing wider. Because when Americans get what minimal news they’re willing to digest – and only because it’s pre-packaged in carefully doled-out sound bites – then the Old Detroit will perennially overshadow the New Detroit, hands down.

Detroit may get help from Washington, but left to their own devices - and timetables - it’s looking like the politicians will come up with something that’s too little and too late to actually make a difference.

And that’s a giant bowl of Not Good.

Thanks for listening.