Eco­nomic times shape gov’s legacy

Sny­der’s suc­ces­sor not likely to have it so good for so long

The Detroit News - - News -

If you don’t think a grow­ing na­tional econ­omy and a prof­itable auto sec­tor can make a Michi­gan gov­er­nor look like a hero, ask the last two oc­cu­pants of the job.

Jen­nifer Gran­holm holds the du­bi­ous distinc­tion of pre­sid­ing over the “Lost Decade.” It’s a con­flu­ence of events marked by the state’s au­tomak­ers stum­bling into bank­ruptcy amid the global fi­nan­cial melt­down, deep­en­ing cor­rup­tion at Detroit City Hall, mount­ing unem­ploy­ment and her ide­o­log­i­cally se­lec­tive em­brace of the global econ­omy that en­sured she never set foot in China as gov­er­nor.

Her suc­ces­sor, Rick Sny­der, mar­shaled his CEO cred and a Repub­li­can Leg­is­la­ture to lever­age ad­van­tage from re­struc­tured au­tomak­ers. He ben­e­fited from a fed­eral cor­rup­tion crack­down in Detroit he did not con­trol, pri­vate rein­vest­ment in the city mea­sured in bil­lions, fall­ing unem­ploy­ment, steadily ris­ing eq­uity mar­kets and his busi­ness­minded em­brace of China to po­si­tion Michi­gan as the na­tion’s “Come­back State.”

The next gov­er­nor, set to take of­fice Jan. 1, is not likely to have it so good for so long. Af­ter nearly a decade of vir­tu­ally free money, in­ter­est rates are ris­ing be­cause the econ­omy is grow­ing; ris­ing rates make money more ex­pen­sive; and more ex­pen­sive bor­row­ing im­pacts ev­ery­thing from car loans and mort­gage rates to mu­nic­i­pal bonds, cor­po­rate bor­row­ing and prof­its.

In­vestors will be look­ing to see whether Detroit’s au­tomak­ers and Michi­gan’s new po­lit­i­cal lead­ers can man­age emerg­ing eco­nomic head­winds as well as their pre­de­ces­sor rode the tail­winds. Mean­ing has Sny­der been good, or just lucky — prov­ing yet again that politi­cians don’t pick their times so much as their times pick them.

And times change, al­ways, ir­re­spec­tive of which party con­trols the gov­er­nor’s of­fice and the Leg­is­la­ture. There’s a cred­i­ble ar­gu­ment that Michi­gan and its largest city im­proved markedly over the past decade — more com­pet­i­tive, more at­trac­tive to pri­vate cap­i­tal and mil­len­nial tal­ent — but there is no guar­an­tee it will stay that way.

Over the past few months, shares in Detroit’s three au­tomak­ers have slumped at least 20 per­cent as ev­i­dence builds that the long­est year-over-year sales and profit boom in the past 50 years ap­pears to be com­ing to an end, re­turn­ing to some sem­blance of nor­malcy. The other rea­son: in­vestors look­ing for ev­i­dence the lead­ers of to­day’s au­tomak­ers are more good than lucky aren’t yet per­suaded this time is dif­fer­ent.

Why should they be, any more than skep­tics who ques­tion the stay­ing power of Detroit’s rein­ven­tion? If free money be­comes more ex­pen­sive, if prag­matic lead­er­ship in Lans­ing tracks the Trumpian times to be­come more ide­o­log­i­cal and con­fronta­tional, this place will slide right back to where it started a decade ago.

Who, ex­cept the most will­fully de­luded, would want that? It’d be counter-pro­duc­tive, self-

de­feat­ing, a re­turn to a past that cul­mi­nated in the most ig­no­min­ious set of bank­rupt­cies ever vis­ited on a sin­gle city or its defin­ing in­dus­try.

Detroit’s rep­u­ta­tion as an aban­doned city — as home to once-pow­er­ful au­tomak­ers re­duced to sloppy medi­oc­ri­ties, as epi­cen­ter of racial con­fronta­tion — still weighs heav­ily on its nar­ra­tive of re­ju­ve­na­tion. And un­til its lead­ers in busi­ness, pol­i­tics and the com­mu­nity demon­strate their abil­ity to man­age ad­ver­sity as well as they’ve man­aged re­cent pros­per­ity, doubters are jus­ti­fied in

say­ing, “show us.”

You want to know the sin­gu­lar chal­lenge fac­ing Demo­crat Gretchen Whit­mer and Repub­li­can Bill Schuette? That’s it. Col­lec­tive me­mory ex­pressed by vot­ers can be no­to­ri­ously short and se­lec­tive, which is why the next gov­er­nor should fa­vor the words “never again” over “my way.”

Con­tem­po­rary his­tory will not be kind to the new gov­er­nor who squan­ders Michi­gan’s im­proved eco­nomic po­si­tion to score cheap po­lit­i­cal points; who in­jects par­ti­san­ship into ef­fec­tive work­ing re­la­tion­ships be­tween Detroit and Lans­ing; who makes it harder to do busi­ness around the state in­stead of eas­ier.

In a re­cent in­ter­view with The Detroit News, Ford Mo­tor Co. CEO Jim Hack­ett is­sued a cau­tion that ap­plies as much to the next gov­er­nor as it does the Dear­born au­tomaker: amid the reck­on­ing of 2008-2009, Ford “shrank dra­mat­i­cally in the cri­sis. We had a chance to come back and have scale ad­van­tages, but we let that slip away.”

Michi­gan’s next gov­er­nor, Repub­li­can or Demo­crat, shouldn’t re­peat the same mis­take.


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