Compuware CEO reminds Senator of Alabama's aid to foreign automakers

[Phred42]

This CEO get's it!

~~~~~~~~~~~~~~~~~~~~~


Compuware CEO reminds Senator of Alabama's aid to foreign automakers
http://www.uaw.org/auto/11_25_08auto1.cfm

Note: The following letter (pdf 19 KB) was sent on Nov. 17 from Peter Karmanos, Jr., chairman and CEO of Compuware Corporation, to U.S. Sen. Richard Shelby, R-Ala., a critic of bridge loans for American automakers.

Dear Senator Shelby:

On Sunday, Nov. 16, I watched with great interest "Meet the Press," during which you and Sen. Carl Levin debated the merits of (or, concerning your position, the folly) providing financial aid to America's domestic auto industry. I must admit that I was more than a little taken aback by how out of touch you really are about what Detroit's Big Three automakers have been doing for some time and continue to do to transform their businesses to both survive in today's debilitating economic climate and thrive in the future. The steps have been extremely significant and take it from me — someone who lives and works in the Motor City — incredibly painful as well.

Frankly, I could go on for pages in an effort to educate you about these measures, but I think Senator Levin did a good job of providing the high-level facts about these transformation efforts. As the ranking member on the Senate Banking, Housing and Urban Affairs Committee, I can only trust that you will take some time and conduct the proper due diligence before continuing to espouse your inaccuracies. At minimum, I believe the domestic auto industry (and its millions of hardworking, taxpaying employees), which helped make America great, deserve as much.
Don't you?
The intent of this letter, however, is not to take you to task for the inaccuracy of your comments or for the over-simplicity of your views, but rather to point out the hypocrisy of your position as it relates to Alabama's (the state for which you have served as senator since 1987) recent history of providing subsidies to manufacturing. During the segment on "Meet the Press," you stated that:

We don't need government — governmental subsidies for manufacturing in this country. It's the French model, it's the wrong road. We will pay for it. The average American taxpayer is going to pay dearly for this, if I'm not wrong....more

[Idealism]

1. Hypocrisy is a central plank to the GOP

Family values but want to do away with unions and gays
Small government but always the first to increase Defense spending (while somehow not increasing taxes)

[spoony]

2. Fuckin right on!

k and r!

[SammyWinstonJack]

3. K&R!

[jody]

4. AL offers to attract Mercedes, Honda, Hyundai were approved by our Dem legislature and Dem & Rep

governors.

[Idealism]

5. But who now condemns these things in other states? n/t

All of them were Republican Senators that I've seen.

[jody]

6. The people I know in AL's legislature and voters in AL agree that Shelby/Sessions speak for them. nt

[Idealism]

7. You didn't answer the question!

Name the Democratic Senators who spoke out against this bailout, condemning Detroit and calling them a "dinosaur?"

[jody]

9. Find the answer yourself. I spoke only to the situation in Alabama. n/t

[Idealism]

12. Two Republican Senators speak for Alabama

[jody]

13. Please read my post #4 that is the subject of this branch of this OP. n/t

[Idealism]

14. I guess I shouldn't have asked rhetorically who denounces subsidies in Michigan

[jody]

15. OK to ask but demanding an answer in #7 is ludicrous. n/t

[Idealism]

17. Wasn't trying to demand an answer

Just pointing out the only senators speaking against helping Detroit have a vested interest in not helping them.

[jody]

18. That's your view. Mine is Shelby is saying if we bail out GM & Chrysler, then help Mercedes, Honda,

and Hyundai plants in Alabama and foreign plants in other states as well.

In all those cases it's U.S. jobs that are at risk.

In November 2008, Ford sold control of Mazda and Ford is NOT asking for bail out funds but if Ford accepts funds it will probably help Mazda.

I don't see a sharp contrast between helping Ford and through it Mazda versus helping Mercedes. Honda, Hyundai factories in Alabama.

As a side note, :

QUOTE
General Motors (GM) plans to invest $1 billion in Brazil to avoid the kind of problems the U.S. automaker is facing in its home market, said the beleaguered car maker.

According to the president of GM Brazil-Mercosur, Jaime Ardila, the funding will come from the package of financial aid that the manufacturer will receive from the U.S. government and will be used to "complete the renovation of the line of products up to 2012."
UNQUOTE

[Idealism]

19. Well considering Shelby himself said

we should let Detroit pay for their mistakes and all that, I don't think he is advocating helping any industry. He was opposed to the Wall Street bailout as well.

That GM story sounds bad but it isn't, the funding given to GM was supposed to be for revamping the product line up with greener cars, although I would like to see it opened in the United States, the legacy and higher labor costs make it cheaper for them to build off shore. Can't really fault a company for trying to cut costs as its teetering on bankruptcy

[jody]

20. I blame congress for letting GM use taxpayer dollars to modernize plants overseas. n/t

[Idealism]

21. I'd blame congress for killing Clinton's health care bill

Universal coverage would've prevented a whole lot of this crap going on, sadly people don't even realize who is really to http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4606050">blame.

[jody]

22. Agree re blame for Clinton's health care bill. I also would like to know how congress will insure

our tax dollars primarily benefit workers in GM plants in the US and not GM's plants overseas.

The following GM brands were being produced in July 2008:

* Buick
* Cadillac
* Chevrolet
* Daewoo
* GMC
* Holden
* Hummer
* Opel
* Pontiac
* Saab
* Saturn
* Vauxhall

ON EDIT ADD:
Of related interest, Cerberus Capital Management, L.P. controls Chrysler.

http://en.wikipedia.org/wiki/Cerberus_Capital_Management
John W. Snow, President George W. Bush's second United States Secretary of the Treasury, is chairman of Cerberus.

Former U.S. Vice President Dan Quayle has been a prominent Cerberus spokesperson and runs one of its international units.

QUOTE
Cerberus owns 80% of now troubled Chrysler Corporation, it has refused to inject cash into Chrysler, as Sen. Bob Corker pointed out at a hearing about the economic needs of the American automobile industry on December 4, 2008. In response to questioning at a hearing before the House committee on December 5, 2008 by Rep. Ginny Brown-Waite, Chrysler President and CEO Robert Nardelli said that Cerebrus' other fiduciary obligations to its other investors and investments prohibited it from injecting capital.
UNQUOTE

[blue_onyx]

8. Great letter Mr. Karmanos

Sen. Shelby is clueless and hypocritical. Nobody should look to him for leadership on this issue.

[starroute]

10. Too late -- Shelby is totally owned

Ever since the Siegelman case erupted, I've been trying to figure out just what really is going on in Alabama. I haven't got it all put together, but I have a number of the pieces.

One is that the military-industrial complex is strongly rooted in northern Alabama around Huntsville, where NASA was originally located and which is still a center of the "missile defense" boondoggle. (This goes back to when many of the "Project Paperclip" Nazi rocket scientists were settled in that area in the 50's.) Shelby, in particular, is *extremely* tightly tied in with the firms in that area and their lobbyists.

But Alabama has also been aggressively courting foreign investment, in some cases even waiving environmental standards to do so. It's not just the $253 incentive to Mercedes in the early 90's, which Karmanos mentions. There was also the recent EADS deal involving Governor Riley, John McCain, and some alleged shady dealings:

http://thehill.com/business--lobby/tanker-deal-may-benefit-mccain-ala.-2006-11-01.html

11/01/06

Sen. John McCain (R-Ariz.) played a major role in ending the notorious Boeing Air Force mid-air refueling tanker deal several years ago. McCain, who will become the chairman of the Armed Services panel next year should the GOP retain its majority in the Senate, is now stepping in again just as Air Force officials have declared the addition of a new tanker program to be their No. 1 priority.

This time, McCain’s reach and influence on the program could not only bring good fortunes to the state of Alabama, but could in some ways benefit his own 2008 presidential bid because Southern support will be essential for the GOP moderate.

Alabama has added appeal for 2008 presidential candidates because earlier this year the state legislature voted to move up the primaries to the spring. And McCain would bolster his candidacy with a strong showing in the early primaries.

Just last week, McCain appeared in Mobile, Ala. with GOP Gov. Bob Riley, who is up for reelection this year, to talk about an open competition in the tanker program. And Riley, along with the Alabama congressional delegation, worked out a deal with EADS, one of the defense giants competing for the contract. The Alabama lawmakers stand to gain from the open competition as they aim to make Mobile a magnet for aerospace business.

Wayne Madsen, as usual, has the more tinfoil version -- so take it with a pinch of salt, but I suspect he's at least half right:

http://www.lebanonwire.com/0803MLN/08031013WMR.asp

March 10, 2008

The recent major Air Force award of the KC-45A tanker contract to European Aeronautic defence and Space Co., the parent firm of Europe's Airbus Industries, and Northrop Grumman involves political payoffs and dubious lobbying by top Republican officials, including GOP presumptive presidential nominee John McCain, according to knowledgeable sources who spoke to WMR on the condition of strict anonymity.

Boeing, which proposed its Boeing 777 for the Air Force contract to replace the aging KC-135 Boeing 707 fleet, criticized the award to EADS-Northrop because the 179 A330 aircraft are to be built in France and shipped to a proposed factory in Mobile, Alabama for retrofitting for tanker use.

The background to the awarding of the contract to EADS lies at the very heart of the GOP corruption in Alabama that saw the political prosecution of former Alabama Democratic Governor Don Siegelman. The award of the Air Force contract to EADS-Northrop was the result of high-level collusion between Governor Bob Riley of Alabama, the White House, and John McCain. It also helped that two senior Bush administration officials, Deputy Secretary of defence Paul Wolfowitz and former Vice President Dick Cheney Chief of Staff I. Lewis "Scooter" Libby once served as highly-paid advisers for Northrop Grumman.

And there was also the Thyssen-Krupp deal last year:

http://www.siteselection.com/issues/2007/jul/naReports/

Some claim Alabama's name comes from the Native American expression for "Here we rest." Others say it means "thicket clearers." Both meanings resonated when it came to ThyssenKrupp's decision to invest $3.7 billion and hire 2,700 to man a combined carbon and stainless steel manufacturing complex in Mt. Vernon, Ala., in north Mobile County. The location had passed every test, and both the corporate and economic development project teams had chopped their way toward what the head of Thyssen- Krupp's team called "a brilliant result."

The company was so confident in its business case that its board approved the plan weeks before 79 percent of Alabama voters on June 5 ratified a constitutional amendment that would help fund the deal's incentive package worth some $811 million, including $400 million in incentives approved by the Alabama Legislature in early 2007.


http://www.bayoubuzz.com/News/Louisiana/Government/Alabama_Riley_Was_Faster_Than_Louisiana_Blanco_In_ThyssenKrupp_Decision__3704.asp

When there is a major victory by a state such as ThyssenKrupp’s choice of Alabama over Louisiana, everyone wonders about the reasons states competing for the project wins and loses.

In the aftermath, many point to the personal persuasive powers of the Alabama Governor Riley and his hands on approach to convincing ThyssenKrupp to land its steel plant in Alabama. ...

From news reports, Riley took over the project from his economic development secretary in order to land the plant. Also, according to the Times, Alabama lawmakers came up with benefit package of more than "$810 million in tax exclusions, abatements and capital credit".


http://www.siteselection.com/ssinsider/incentive/ti0706.htm

Company Added Contract Clause to Protect Plant's Power from 'New Taxes'

ThyssenKrupp included a condition of its own in the state subsidy agreement. The stipulation is apparently an attempt to shield the Alabama plant's power costs from any future levies on fuel.

That provision specifies that "in the event that state legislation is introduced that adds a new tax on energy, carbon dioxide, or the use of electricity, natural gas, coal, or industrial gases, the state shall use its best efforts to (1) defeat such legislation or (2) seek an amendment to such legislation providing the company an exemption therefrom." . . .

ThyssenKrupp will pay $5 million less a month for electric power in Alabama than it would've in Louisiana, according to data that the Louisiana Public Service Commission released shortly after the site choice was announced. That very large cost difference traces largely to the sources utilized in power production. Louisiana utility firms for the most part use natural gas to run their generators, while Alabama companies primarily use less expensive coal.

Alabama Power, of course, was lobbying heavily for the deal, from which it stands to profit handsomely. But this post is already way too long and that's getting into a whole other story. (However, those with an interest might check out the Greg Palast expose on Alabama Power's parent company, Southern Company, at http://www.zmag.org/znet/viewArticle/10534.)

[FLAprogressive]

11. And to think that Shelby used to be a Dem. nt

[Freddie Stubbs]

16. Does that mean that it is Michigan's responsibility to bail out GM and Chrysler?