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Daniel Howes: "Presidential circus" misunderstands Detroit, auto industry comeback

Mar 10, 2016

Credit Daniel Howes / Detroit News

In his column for The Detroit News today, Daniel Howes argues that the “presidential circus” is misreading the auto comeback in Michigan.

He begins with a quote from Republican front-runner Donald Trump, claiming he’ll have Michigan’s support because “we’re going to get the auto industry back.”

What does that say about the national narrative and political beliefs about Michigan and the auto industry?

“That they’re not paying attention,” Howes answers flatly.

“It … confounds me to no end to listen to the narrative and the presidential campaign, to listen to the national reporters who follow that cavalcade around the country, who come in here, and you would think that it’s 1979. And they certainly haven’t been paying attention to what’s been happening the last seven years since the auto bailout.”

Howes tells us this is evident not only in the electoral race, but also in the way Wall Street values automakers in Detroit and the way people perceive the industry in Michigan.

"You get kind of this sad sack condescension from people as they come through here, and it's very frustrating."

He runs through a number of ways the industry has improved that the national narrative has largely ignored:

“We’ve got a lot fewer plants and we’re building more product with fewer people than anytime in the history of this industry. The profit margins are in double digits, the return on invested capital is fabulous, and I think that’s only going to continue. I mean, we’re at a point right now where the break-even lines for these companies is so low that you would have to have a savage recession – actually worse than we saw in 2008 and 2009 – for them to start to lose money in North America. That is pretty remarkable.”

“And yet, you get kind of this sad sack condescension from people as they come through here, and it’s very frustrating.”

Howes tells us that the national media narrative has been shaped by an outdated perspective of Detroit.

“We all know that this was a downward spiral that was decades in the making, both in terms of the industry and in terms of the city. And it’s only been in the last six or seven years that we’ve really started to reverse that,” he says, naming the auto bailout, the recovery of the national economy and Detroit’s bankruptcy as contributing factors.

“Without those three things we may not be having this conversation,” Howes says. “That said, at the end of the day, all of those things were executed by people. People working and living in this community.”

He tells us there are instances when companies and institutions in Detroit relied on outside experts, “but a company like General Motors today is really run in large part by people who have been at General Motors for the whole of their careers. And the same thing at Ford Motor Company. These are not accidents.”

“People don’t spend the time to burrow into this stuff, it’s not what they live with. We live with it,” Howes says. “I think now we’re on the other side of this, and the question now is going to become, can we continue to manage this prosperity and the adversity that’s likely to come at some point, we just don’t know when.”