June 10, 2014 at 1:00 am

Daniel Howes

Detroit automakers' DIA gift expected to light fire under others

Executives, from left, Mark Reuss from GM and Joe Hinrichs of Ford join the DIA's Graham Beal and EM Kevyn Orr for the announcement. (Daniel Mears / The Detroit News)

The combined $26 million pledge by Detroit’s three automakers to the DIA’s “grand bargain” campaign is expected to unleash a flood of smaller but significant contributions from the city’s corporate players, including auto suppliers watching signals sent by their largest customers.

“We are going to be there with a meaningful contribution, and it will be public within the next couple of weeks,” Gerry Anderson, chairman of DTE Energy Co., said in an interview Monday. They won’t be alone, as pressure builds on would-be donors to show city retirees the money before balloting on the city’s Plan of Adjustment ends July 11.

The Detroit Institute of Arts’ $100 million campaign, the final phase in the grand bargain orchestrated by Chief U.S. District Judge Gerald Rosen, represents a rare rallying point for corporate players who understand clearly the importance of securing the deal because of what it says about the community, its values and avoiding worse alternatives in Chapter 9 bankruptcy.

DTE’s contribution is likely to be roughly $5 million. Dan Gilbert and his Quicken Loans Inc. family of companies are mulling a similar-sized contribution, according to a ranking source familiar with the situation. Industrialist Roger Penske is likely to join the campaign, as well as Blue Cross Blue Shield of Michigan, which recently consolidated its workforce in its downtown headquarters.

In announcing the auto pledges — $10 million from Ford Motor Co.’s Ford Fund, $5 million from General Motors Co., $5 million from the GM Foundation, and $6 million from Chrysler Group LLC — DIA Chairman Eugene Gargaro said the campaign already has secured commitments totaling $70 million.

That’s an astonishing achievement in the painstaking, often slow, business of fundraising. It comes just a few months after the DIA leadership agreed, under pressure from Gov. Rick Snyder, to ask donors large and small for help assembling pledges that otherwise would likely have been used to grow the museum’s endowment.

More, the campaign also illustrates the unprecedented nature of the grand bargain. It is an audacious effort to buy the DIA’s freedom from city ownership by bolstering underfunded city pensions with $660 million in cash raised from a dozen foundations, DIA donors, the state Legislature and a business community that understands how pitiless bankruptcy could be without a bargain to cushion the landing for retirees.

It’s hard to overstate just how historic the effort is. Foundations are stretching their philanthropic missions well beyond their traditional bounds; a Republican-controlled Legislature and a Republican governor are engineering a state-funded rescue of a Democratic stronghold; corporations and well-heeled donors are responding quickly to appeals otherwise likely to have been made in a long-running endowment campaign; even a union is joining the fundraising.

The bargain also is an attempt to secure an insurance policy against a far uglier outcome: namely, a creditor free-for-all in which financial heavyweights schooled in the bruising bankruptcy process get a second chance to press their advantage over pensioners and unions armed with finite resources and a comparatively unsophisticated understanding of the game and how it is played.

With apologies to the Occupy Wall Street types, most successful business people aren’t stupid when it comes to assessing risk. They know the optics of DIA art being liquidated to pay creditors, or the spectacle of U.S. Bankruptcy Judge Steven Rhodes ordering a cramdown on city pensioners, would reinforce all the worst perceptions of Detroit, its leadership and its values.

That culture doesn’t matter. That pensions for its public retirees are expendable. That the only thing that matters is the money, despite the fact that Chapter 9 is designed in part to prevent the kind of wholesale liquidation that would further impoverish a city and its quality of life.

“This is enlightened self-interest,” said a source close to the process. “You either pay now or you pay later. Let’s face it: this will go down in the annals of philanthropy.”

And more. A cynical view of Judge Rosen’s grand bargain mistakenly holds that southeast Michigan’s big money is coalescing to save the DIA’s collection from the auction block, essentially robbing pensioners of value that otherwise would accrue to their benefit.

Wrong. The bargain is using the promise of the art’s rescue to leverage cash from community sources to create a fund designed to benefit pensioners and those who someday will be. Rejecting the deal would be an epic mistake, a chance for financial creditors to plunder the city one last time and leave pensioners the remains.

daniel.howes@detroitnews.com
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