Pontiac, Mich. looks to candidates for hope following auto industry collapse

Rachel Rose Hartman
The Ticket

PONTIAC, Mich.-- Amid the boarded-up homes, near-empty eating establishments and abandoned auto plants in Pontiac, Mich. a community of residents is in anxious transition, waiting for a path forward to move their economy beyond the collapsed auto industry.

"We're looking to hear that there is hope . . .  and a plan to make this work," Kent Piatt, owner of Pontiac's Liberty Bar, told Yahoo News ahead of Wednesday night's Republican presidential economic debate to be held at nearby Oakland University. "A way we can all work together and make this come about."

Business leaders, politicians and ordinary families trying to pay their bills echo a similar sentiment in the once-robust manufacturing city--and across Michigan--as political and economic leaders continue in the struggle to revive an economy devastated by the auto industry's implosion.

In Pontiac, General Motors once operated three major facilities, which doubled the city's population each day and brought tax revenue to the city each quarter. The city was a landmark for the motor company--as well as the inspiration for GM's Pontiac car brand.

But the last of the GM facilities closed in 2009, leaving the local economy and Pontiac devastated.

"Restaurants are not busy. People are not out at night," Pontiac Mayor Leon Jukowski, who was born and raised in Pontiac 50 year ago, told Yahoo News Tuesday. Unemployment in the city currently hovers around 33 to 35 percent, Jukowski said--three times the statewide jobless rate of 11 percent.

"An inordinately large amount--a shockingly large amount" of lost jobs "came out of towns like Pontiac," Jukowski said. He also noted that Pontiac's plight is far from unique in the state, citing factory closures in onetime auto-industry capitals such as Flint, Benton Harbor, Detroit and Bay City.

Pontiac had pursued efforts to expand the city's retail industry and art community as the auto industry slowed. But those initiatives never really gained traction, as smaller retail enterprises streamed out of the city and into shopping malls. The city also faced chronic budget and administrative challenges, which eventually prompted the state to appoint an emergency financial manager for the city  in 2009. And in a move that seems to dramatize Pontiac's growing economic isolation, a new four-lane highway now surrounds its downtown, effectively cutting off the city's commercial center from surrounding communities.

"The demise of the city occurred when they closed [highway] M-59 and Amtrak . . .  it crossed off our traffic," said Maureen Young, co-owner of local Bo's Smokehouse and secretary of Pontiac's downtown business association.

Many boarded-up homes crop up across Pontiac, as they do throughout Michigan, which has been hit exceptionally hard by the foreclosure crisis. Last week, the city of Highland Park, announced that it would completely remove 1,000 streetlights, since it can no foot its power bills, with the loss of 50 percent of its population over the past two decades. Meanwhile, Detroit's population decreased by 25 percent in the time between the 2000 and 2010 census.

Still supporters of the 2009 auto-industry bailout say things could have been much worse.

"Look at where the auto industry was when [George W.] Bush was leaving, and President Obama was coming in to where it is now," former Democratic Rep. Mark Schauer said Tuesday. "It is a night and day difference that occurred because of intentional policies."

Measures such as the auto bailout will no doubt draw much discussion at Wednesday's debate. The debate will focus principally on economic issues, meaning that all eight Republican candidates--including former Massachusetts Gov. Mitt Romney, who was born and raised in Michigan where his father served as governor-- will face questions about the bailout's legacy, which has faced stiff opposition from the GOP. Candidates will likewise be expected to spell out alternative approaches to reviving the state's flailing economy.

Democrats leading up to the debate attacked Romney on the issue after he reiterated Tuesday a position he took in 2008 that the government should not "write a check" to the auto industry.

"The government wrote those checks, they wasted money," Romney said in an ABC/Yahoo News interview. Romney argued that the industry should have gone through a "managed bankruptcy," which woud have permitted government officials to assess whether automakers needed additional federal funds.

"I was frankly right. They had to go through managed bankruptcy," Romney said. "They finally went through bankruptcy. That was what was necessary in order to get rid of the excess costs and for them to be able to get on their feet."

You can watch the video of Romney's full interview below:

Democrats say that such talk amounts to little more than Romney turning his back on his home state.

"Industry experts have been clear: our auto companies would have faced liquidation if Mitt Romney had his way and more than 1 million Americans would have lost their jobs," Obama campaign spokesman Ben LaBolt said in a statement. "Mitt Romney must explain to Michigan voters this week why he would have let Detroit go bankrupt."

The fate of the automakers is an especially charged question for residents of places such as Pontiac. As Young explains, the community has little choice but to hope for a revival of its once-vibrant manufacturing economy.

"People keep talking about how they want to diversify the economy . . . but we hope that these plants will get reactivated again," Young said. "So many of our foreclosures are a result of plants closing . . . there's only so many people that can move in with moms and dads. And at some point, where do you find work?"

However, policy makers across the state realize that a full-blown auto revival is unlikely, and are starting to explore efforts to woo other kinds of industry to the former automaking capital of the world. Since his re-election loss in 2010, Schauer has been pushing to attract alternative energy production--including wind and solar power--to the state. Other groups have begun building up Michigan's agriculture industry, including in urban areas such as Detroit. And state economic leaders are also seeking to branch out into other forms of manufacturing, such as nonautomotive  transportation.

In Pontiac, Jukowski says he's working hard to diversify the local economy; he says he'd like to see  high-tech firms, health-care concerns and education help spur the former manufacturing center into a postindustrial phase of economic growth. Unlike many other residents of Pontiac, he sees little hope for a renaissance in automaking.

"Realistically, despite what the politicians might promise us, Pontiac is not going to be an automotive town again," Jukowski, a Democrat, said.

Economists in the state say that Jukowski is far from alone--many Michigan business leaders and policy makers are moving beyond the auto industry.

"We realized that we have to change," University of Michigan economist Donald Grimes said. "The natural forces were not going to propel us back to where we were."

Still, ordinary voters in Pontiac say they're looking for some sign in tonight's debate that the field of GOP presidential hopefuls can generate some positive economic momentum in the state. Piatt said he wants to hear that candidates are hopeful and have a plan to move forward.

Schauer said state voters want to know that candidates "are not giving up on Michigan."

And this is where Republican political operatives in the state say they have an advantage.

"President Obama has really essentially angered everybody," state Republican chairman Bobby Schostak told Yahoo News. "People are not just upset with the 1 percent," he added, referencing the Occupy Wall Street protesters, "they're upset with the direction of this country."

Schostak said "out of control debt," high unemployment and the president's seeming inability to get things done in Washington-- even before Republicans won control of the House--plays into that dissatisfaction.

"This nation and Michigan voters--Republicans, independents, and Democrats--need to see real change, change that will make a difference," Schostak said.

A Democratic official, speaking anonymously because he hadn't been cleared to offer official comment, said the president still has a leg up in the state, noting that Obama operatives are already building a robust campaign operation. The official noted the opening Sunday of two new offices, in Ann Arbor and Macomb.

Obama won Michigan in 2008 by a strong 16 percent margin--which could make it difficult for the GOP to pick up the state in next November's general election. Still, party officials note that it's gained ground in the state, electing Republican Gov. Rick Snyder in 2010.

The GOP presidential race could also sputter out a bit in Michigan, since Romney--who carried the 2008 Michigan GOP primary--enjoys a favorite-son advantage there.

But Schostak, the state party chairman, warned Tuesday that the proportional allocation of delegates means that, come February, every primary vote will count in his state. Schostak noted that Herman Cain, Michele Bachmann and Newt Gingrich have all campaigned in Michigan, even though its Feb. 28 primary doesn't loom large in the critical early primary balloting.

However, the tougher challenge for both major parties will be to work up much enthusiasm for a political campaign in the recession-battered state. "The people of Michigan have been through a lot--the worst of the worst here," Schauer said. "They don't notice that things are better."

For their part, residents of Pontiac say they're ready to be persuaded. As Young said, "We're all in a hopeful state."

Wednesday's debate, sponsored by CNBC and the state Republican party, will be broadcast live beginning at 8 p.m. ET. Check back with The Ticket for live coverage and analysis from the Yahoo News and ABC News.

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