As the automobile industry struggles to survive, is there hope for the states recession-wracked economy?
By Mark Hornbeck Michigan’s long-standing state budget crisis is inextricably linked to the domestic auto industry’s freefall and, in some ways, one mirrors the other. The Midwest state and its once-mighty car giants are in protracted down cycles, unprecedented in their length and severity. Both the state and the automakers have done some restructuring and downsizing, with labor wage concessions and retirement cost reductions among the austerity measures. As 2009 opened, the Detroit-centered Big Three and the state of Michigan were depending heavily on the promise of federal bailouts. The automakers are hoping a $17.5 billion loan package will help them hold on while the state awaits agreement in Washington on a multi-billion-dollar federal stimulus plan from the new president. (State Legislatures went to press before final action on the economic recovery plan.) “What’s happened to the state budget is all about the deterioration of the American auto industry,” says Mitchell Bean, direc
