Detroit's automakers close a blistering year of sales with the prospect of an even hotter New Year, and the president is coming to town to tout his six-year-old auto bailout.
Funny how that happens. Yet when President Obama visits Ford Motor Co.'s Michigan Assembly plant in Wayne Wednesday, closed this week because of slack demand for its fuel-sipping small cars everyone is supposed to want, he'll be doing more than claiming too much credit for the resurgence of a hometown industry too many gave up for dead way too soon.
He'll effectively be hailing a city and its eponymous auto industry reshaped during his presidency. Not by Team Obama, per se, which undeniably doubled-down on the Bush-era bailouts and financed the bankruptcies of General Motors Co. and Chrysler Group LLC.
No, the Detroit of 2015 is the product of a team game, in which the players are mostly local and credit and risk hold equal measure. Making it all work are the levers of government (federal and state), individual leadership (political, business and labor) and capital (public and private).
There are plans vindicated by execution here, not in Washington. There's compromise, cooperation and shared sacrifice, from creditors and shareholders to unions, retirees and taxpayers who helped finance rescues of both Detroit and two of its automakers. There's municipal bankruptcy overseen by the federal court, and a continuing roll up of public corruption prosecuted by federal law enforcement.
The Detroit Obama is visiting this week is dramatically different in feel, even look, from the dispirited industrial hulk edging toward collapse as he took office in January 2009. Then he faced the imminent implosion of two Detroit automakers and collateral damage to suppliers, their communities and the poorest major city in America.
Not anymore. The politically correct response is to argue that none of this — not the turnarounds of GM and Chrysler, not the profitability of the industry generally, not the financial restructuring of the city in bankruptcy — would be possible without the Obama bailouts (begun under Bush) or the unique power of government in times of crisis.
That's partly true. In the midst of a global financial meltdown, the U.S. Treasury emerged as the lender of last (and only) resort to automakers groaning under too much debt and not enough revenue. Treasury conditioned its cash infusions on specific actions, especially at GM, but its auto task force didn't draft the business plans the industry is driving to near-record sales and profits in its home market.
Detroit's financial restructuring used state law, the discipline of federal bankruptcy and the influence of a federal mediation team to push the massive Chapter 9 case to confirmation in less than 16 months. Credit myriad players, including Gov. Rick Snyder and barely a half-dozen federal judges.
Washington? Not so much, save a high-level effort to break bureaucratic logjams and get already allocated federal money flowing back into a cash-strapped Detroit gutting through the largest municipal bankruptcy in American history.
In the age of cynical politics, optics trump substance. The optics of the Obama-led bailouts are that they delivered the resurgence seen in this week's sales numbers, six straight years of market growth and fat profits here at home.
The substance is more complicated. The bailouts were necessary, given the conditions of financial markets at the time. But they were not sufficient without record-low interest rates, pent-up demand, robust product plans and the corporate discipline to get new, compelling metal into showrooms on time and on budget.
Detroit has its second chance, and it must demonstrate repeatedly that neither the city nor its automakers will blow it like a Lions lead in the fourth quarter. Elected officials are back in charge at City Hall. Bankruptcy is complete and expectations are high, realistically or not.
The automakers are well into a recovery marked by the most robust profits at home in years and serious challenges in most key markets around the world. The industry is beginning what is expected to be a seventh consecutive year of annual sales growth, an outlook that buys time and bodes well for both Detroit's automakers and their hometown.
"Sales are on a roll," says Warren Browne, a former GM executive who is president of WP Browne Consulting LLC. "All economic factors are pushing positive, incentives are just icing on the cake. North America is one of the few sales bright spots for the Detroit 3; this does not bode well for overall profit performance."
Maybe not, but it's far better than the alternative this town and its automakers have already lived once. No one this side of insanity wants to go there again.
Daniel Howes' column runs Tuesdays, Thursdays and Fridays and can be found at http://detroitnews.com/staff/27151.