Republican Senators Intercept Hail Mary Pass to Detroit

Republican Senators Intercept Hail Mary Pass to Detroit

Can Train Innovation Like Tubular Rail Ride to the Rescue?

Transportation Infrastructure Key to Jolt Economy

OhioNewsBureau

with John Michael Spinelli

Columbus, Ohio: The news late Thursday that a handful of southern Republican senators, whose political motivation was nothing less than busting the United Auto Workers Union, were able to quash a meager $14 billion bridge loan to Detroit's Big Three automakers Democrats and a lame duck White House were able to arrive at despite President Bush's reluctance to help the industry from driving off a financial cliff is bad news for middle class families.

The inability of General Motors, Chrysler and Ford to receive even bare basic funding begs the question of can America invent a new industry, equal to planes and cars, that can revive a nation now that domestic car makers may be soon asking for their last rights.

As Director of Ohio Operations for Tubular Rail Inc., the "trackless train technology" company from Houston, Texas, the news that Senate Republicans successfully stiff armed Detroit, while disheartening to states like Ohio and Michigan because it means more workers, families and the communities they live in will be further harmed, is the latest sign that new industries offering new jobs must be found to keep the very fabric of our society together.

This report, therefore, continues my exercise in advocacy journalism. The the rising tide of interest by federal and state officials to jolt our cardiac arrest economy to life, through large and immediate investments in transportation infrastructure, amplifies my arguments advanced in previous posts like "Time Right to Shake Up Detroit," "Living La Vida Local" and "Columbus to Paris: Attitude Not Miles Key," a trio of essays that advocate for smarter, affordable alternatives to our car-centric transportation system.

Cars haunt and hinder us as we look to upgrade or build from scratch effective, energy efficient mass transportation systems that don't abandon past technology but don't overlook, discount or block future technology either. Previous civilizations constructed huge, massively impressive and functional infrastructure. For China it was the Great Wall. For Rome it was networks of aqueducts. We must do the same. But what will be our great infrastructure achievement be? Energy or transportation? Or both?

The weekly announcements of hundreds of thousands of Americans are loosing their jobs is as painful to the body politic as passing a kidney stone is to an individual. Claims for unemployment benefits surged to their highest in 26 years, according to the US Labor Department, which reported that jobless benefits in the week ending Dec. 6 rose to a seasonally adjusted 573,000 from an upwardly revised figure of 515,000 in the previous week. This figure is 48,000 in excess of what Wall Street economists expected. With total job losses in 2008 nearing the 2-million mark, President-elect BarackObama's plan to create 2.5 million during his first term, principally through massive investments in infrastructure - roads, bridges, water and drainage systems - is both bold and necessary.

As recently as yesterday, Gov. Ted Strickland of Ohio, where about 250,000 auto-related jobs hang in the balance, gave his residents a bitter pill to swallow, as he explained what cuts he would have to make if the state is confronted with balancing a budget for 2009-10 that could be more than $7 billion, the highest budget gap in state history.

Spending more money at a time when America is broke seems the only remedy to put the nation back to work, echoing what was done by Franklin Delano Roosevelt to lift America from the strangle hold the arms of the Great Depression had on it. But unlike FDR, Obama won't have a world war riding to his rescue. But that's a good thing. The war we must fight now that will create for us the number of jobs that World War II created for the nation then is a war on foreign energy sources that can only be won when we develop our own sources of renewable energy and a means to distribute and use that power in new, innovative ways.

President-elect Obama's appointment Thursday of Stephen Chu to lead the US Department of Energy is good news. Chu is director of the Lawrence Berkeley National Laboratory and shared the 1997 Nobel Prize in physics. Reuters reported that he was an early advocate for scientific solutions to climate change. Having a winner of the Nobel Prize in Physics running the national department of energy is a revolutionary selection, when compared to picking from a pool of energy lobbyists or former politicians as President Bush liked to do. And Obama could have selected a well-seasoned administrator, as he's done with his other teams like foreign relations or economics. The turnaround of picking a working scientist likeChu is exactly the kind of change Obama said he would bring to Washington. Leadership is most cost-efficient when it comes from the top. Upward leadership from the ranks is important too, but that takes time; and time is a precious commodity these days. When a leader likeChu , whose groundbreaking is all about converting sunlight to electricity, then to chemical power that could then be used to fuel America, not only points the way forward but is inclusive enough to fund inventive, innovative independents to join in, its a breath of fresh air and inspiration and should not go unnoticed by transportation officials, who should consider using technology that may not be conventional, especially when it comes to trains. The train that left the station last century may not be the same train that pulls into the 21st Century station.

The resurgence of talk about reviving train traffic in America is starting to work its way into the minds of the mainstream media. A case in point was today's Washington Post editorial "Invest in Mass Transit" whose subtitled "Far sighted way to jolt the economy" reflected the reality that voters, expressing their will on Election Day by approving most transportation issues, are ready to pay for mass transit.

"Nationwide, voters approved over 70 percent of major transportation-funding measures, according to the Center for Transportation Excellence. That's double the rate at which ballot initiatives are generally approved, and it is even more impressive because gas prices were already declining." [Washington Post ]

Citing significant rises in public mass transit over a half year, it argues that politicians should make infrastructure improvements a key component of any economic stimulus bill. In September the House passed a bill on mass transit that was "haphazardly crafted," according toWaPo , which said would "jump-start ready-to-go transit projects that cash-strapped states had shelved." Continuing, it said these approved but idle projects "would not reward the best projects, only the ones that were ready to begin." The editorial wisely cautioned lawmakers to "give priority to projects that are environmentally friendly and that encourage smart growth."

Everyone at Tubular Rail Inc, where the technology developed and patented by inventor and company founder Robert Pulliam is featured in the Discovery Channel's forward-looking NextWord episode called "Future Train," believes "trackless train technology," which reforms the relationship between wheel and track, can contribute to achieving both energy and transportation goals. TRI has been seeking its "Kitty Hawk" moment to show, through a working "proof of concept" model in Ohio or Texas, that conventional railroads, grade-level steel on steel technology is not only costly but difficult to build and environmentally unfriendly. As well known as traditional trains are and as powerful as their lobby is, the question is, is it smart or affordable to pursue them, especially as public coffers drain dry? Instead, if an affordable, energy efficient, job-producing system whose capital costs could be 60 percent less that conventional train technology, shouldn't it be given its turn at bat in the sweepstakes of public-private funding?

And as America braces for hundreds of thousands or maybe millions more in job losses if a federal bridge loan to Detroit's Big Three automakers fails, as was announced Friday because a handful of Republican senators from southern states with foreign car manufacturers located in them effectively killed the helping hand, what will the next generation of jobs these laid off workers can apply for?

New train technology today is as revolutionary as the untested technology two brothers from Dayton worked on in their bicycle shop at the turn of the 20th century. Orville and Wilbur Wright, the bicycle brothers who birthed controlled, sustained flight in 1903, were hard working inventors of their day whose persistence and perseverance eventually took off despite little interest by the press and no financial assistance from government. They two bachelors winged their way into history at a windy, secluded beach at Kitty Hawk, North Carolina, where they turned their glider into a self-powered airplane and made history in the process.

We can only wonder if the fanciful invention Orville and Wilbur worked on at their own expense over several years would turn the heads of state development directors, who in a state like Ohio, where jobs are leaving with few taking their place, seem only to be interested in innovations that are in the "late stages of commercialization" and that can leverage state dollars by a factor of two or three. If Orville and Wilbur showed up today with their invention in Ohio -- whose license plate slogan "The Birthplace of Aviation" memorializes their work -- they wouldn't fair well, as government officials are averse to risk. And lifting a heavier then air machine off the ground for sustained periods was indeed risky.

Tubular Rail's "trackless train technology" is a perfect example of a transportation technology that Obama's infrastructure spending program could make real.

But risk is in the eye of the inventor. The Wrights were not wrong about their own research. Pulliam of Tubular Rail has nurtured his "trackless train technology" along much as the Wright's did in their time, only Pulliam wants to invite the world to his coming out party in contrast to the Wrights, who were far more circumspect about public scrutiny than isPulliam . But Ohio may loose out to Texas in landing a new industry of future trains. Texas may get the jump on jobs Ohio sorely needs if Buckeye officials, both public and private, don't get on board a new train for a new century.

John Michael Spinelli is a former Ohio Statehouse government and political reporter and business columnist. To send a tip of comment, email ohionewsbureau@gmail.com

Ho Ho Ho Help

Ho Ho Ho Help

Detroit Big Three, UAW Prepare for Bad Tidings

OhioNewsBureau

with John Michael Spinelli

Columbus, Ohio: Detroit's Big Three automakers and the United Auto Workers union may wake up Christmas morning to find nothing under their tree, if congressional Republicans and their lame duck president stand tough and not throw good money after bad by letting General Motors, Ford and Chrysler fall into bankruptcy, a scenario expert witnesses who also testified Friday said was not in the best interest of the nation.

The leaders of the Big Three car-makers, who this week drove to Washington in their most fuel efficient vehicles instead of flying there by fossil-fueled corporate jets as they did last week, did double duty by repeating their talking points, with hat in hand and a big tin cup, to the Senate and House. The three car stewards from Detroit asked lawmakers for about $34 billion. This amount, nine billion more than the troika said they needed last week, would be enough cash to get them past Christmas and maybe to March, when a new Democratic president and a stronger Democratic congress will do for them what President Bush and many of his party's fiscal conservatives won't do now, namely, keep about three million workers from joining the 1.9 million workers who have already lost their jobs this year.

But by Friday evening Democratic leaders, including Senate Majority Leader Harry Reid of Nevada, House Speaker Nancy Pelosi of San Francisco, Sen. Chris Dodd of Connecticut and Rep. Barney Frank of Massachusetts, agreed that a "rescue loan" to the nation's struggling domestic automakers was essential. Their decision came as The US Bureau of Labor Statistics greeted the nation with employment statistics that assured about 533 thousand workers will not have the same Christmas those with a job will have. The job loss number was powerful. It cast the recession economists now say started nearly a year ago in December as the longest one since the Great Depression. Today's BLS numbers are equivalent to tossing the entire state of Wyoming or the City of Seattle out of work. In November alone, the manufacturing industry lost 85,000 jobs, 82,000 thousand in construction and 91,000 thousand in retail. BLS officials said it was the worst report in three decades.

President Bush said he didn't want to redirect any of the $700 billion congress approved to bail out a sluggish, over-leveraged Wall Street to help the domestic automakers stay out of bankruptcy reorganization known as Chapter 11. The sentiment offered by Mr. Bush and fellow Republicans -- that throwing money at companies that may not survive -- were echoed by Mark Sanford, the governor of South Carolina. He said bankruptcy was the only way to "break certain relationships...like labor contracts" and believes Washington has provided enough stimulus already. He said $ 7 trillion in stimulus already is enough and Washington printing more money can't continue. He defined Detroit's situation as a problem of too much debt, the declining value of the dollar and not working hard enough in a market based economy to get rewarded. But foreign car companies, some in Republican districts, were hurting, too, as seen by a 50 percent downturn in Toyota stock. A fall off in car sales is no doubt linked to Americans who don't have cash or cannot get credit to buy one, or who don't have a job anymore.

One Ohio senator, Sherrod Brown, who sits on the Senate Banking Committee chaired by Chris Dodd, said constituents in his state, where total auto-related employment is about 250,000, are worried they won['t have a job next year. "It's all about manufacturing, making things," she said, adding, "America has a middle class because we make things and export them." Brown, elected senator in 2006, said US trade policies need to be changed, a hope that may come true when his party's new president-elect, Barack Obama, comes to power in January along with a more powerful Democratic caucus in both legislative chambers. Putting people to work is as paramount for Brown, who said no one wants to "play a game of chicken" and political posturing at this time is unnecessary, as it is for Obama, who used his Saturday video to outline a massive infrastructure spending program he'll launch upon being sworn in president.

"I didn't want to vote for money for Wall Street or car makers, but I have to," Brown said, noting that no questions were asked of Wall Street bankers as they are now for Detroit carmakers and workers. "There's a class difference here; people working with their hands...AIG workers make multiples of what autoworkers make," he said in his signature gravely voice. "It's not a pretty sight," Brown said to Rachel Maddow of MSNBC.

House Banking Committee chairman Barney Frank, a Democratic leader who has called on president-elect Obama to get involved now in advance of his January 20 swearing in ceremonies, said the new deal is to loan Detroit's Big Three $25 billion in already approved energy funds, but reserve the right next year to use Wall Street money. Frank said no questions were asked of the big insurance giant AIG, whose leaders and workers make far more than their peers in Detroit. Frank also said the situation calls even more attention to solving America's health care problem, which places a financial burden on the automakers that in turn makes them less competitive than their foreign car rivals, whose government have universal health care. Lack of universal health coverage underscores the "stupidity of America's health policy" he said, noting that Detroit and other business would be better off in two years, after President Obama and Congress work toward a "rational health care plan." Frank, like other Democrats, said there is a distinct bias between blue collar and white collar jobs. One industry observer said people who "shower before work" are given carte blanch while people who "shower after work" are given the third degree.

News came a day later that the size of the bailout may be half what automakers had asked for.

After the car CEOs left he hearing room, a panel of other economic experts chimed in, saying Detroit could not be allowed to go bankrupt or out of business. Felix Rohatyn, a legendary financier who helped bring New York back from the edge during the 1970s, said lawmakers need to hurry up before it's too late. "From a popular point of view, it's difficult, but from a practical point, its' very doable," he said of the rescue loan.

David Friedman of the Union of Concerned Scientists Clean Vehicles Research Center said the rescue package should be structured as investment, not bailout. He said Detroit's survival depends on it, that taxpayers should get a return on their investment, that carmakers should drop their lawsuits to keep increased mileage standards imposed by California should be dropped and new cars should be made to produce cleaner cars and trucks.

Jeffrey Sachs of the Earth Institute at Columbia University said Detroit should not reorganize in Chapter 11. Sachs told lawmakers that Federal Reserve Chairman Ben Bernanke and Treasury Chairman Henry Paulson should both be more involved than they are. He called on Detroit to be pragmatic, restructure their balance sheets and models. "The double standard with Wall Street is painful and palpable and difficult to understand," he said. Sachs said if Detroit gets no help soon, they could meltdown by Christmas. "Unless they are driven to bankruptcy, ,they will survive and prosper," Sachs said.

But a witness like Edward Altman, a professor of finance at Columbia University, said just the opposite. He said the only hope Detroit has is to go bankrupt, where they can restructure and change their management.

One committee member, Al Green, a Democrat, took a pop quiz of the witnesses. He first asked them if the bailout of Wall Street was in America's best interest. All hands went up. He then asked if it was in America's best interest to help Detroit. Again, all hands went up. Pennsylvania Senator Bob Casey took on critics of auto union workers. He debunked the so-called “mythology” that auto workers make $70-an-hour as “scapegoating” and “garbage." According to the New York Times, the average U.A.W. member costs GM about $74 an hour in a combination of wages, health care and the value of future benefits, like pensions. By contrast Toyota spends the equivalent of about $45 an hour for each of its employees in the United States. Base wages between the Big Three and the foreign companies are roughly comparable, with a veteran U.A.W. member earning $28 an hour at the Big Three compared to about $25 an hour at Toyota’s plant in Georgetown, Ky. (Toyota pays less at its other American factories.)

Senator Dodd is echoing the notion expressed here that Detroit should also manufacture mass transit vehicles, an idea one commenter said others dealt with "respectfully."

Michigan Governor Jennifer Grandholm, whose state unemployment figure is within spitting distance of double digits, said access to credit is what's stopping people from buying cars. She said 1 in ever 10 jobs in the nation are tied in one way or another to car makers, and that for reasons of energy independence and economic security, Detroit must not allowed to fail. Meeting with the nation's governors in Philadelphia, where they asked president-elect Obama to ride to their rescue next year, Grandholm, who said her state was the poster child of the sagging economy, said no one wants people living on a "safety net system." She implored that people be given a chance at dignity, retrained in innovative ways instead of the slash and burn philosophy of Mr. Bush and others, like Alabama Senator Shelby who told the car makers he doesn't want to fund them. She said not giving people a second chance "is not American."

John Michael Spinelli is a former Ohio Statehouse government and political reporter and business columnist. To send a tip of comment, email ohionewsbureau@gmail.com