Is Auto Recovery Here To Stay?

President Obama on Friday wants to call attention to the successes of the bailed-out companies by visiting automakers in Michigan. Micheline Maynard, who has covered the industry for more than two decades, discusses whether or not the good news in Detroit will last.

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DON GONYEA, host:

Micheline Maynard joins us now. She has been covering the auto industry for two decades, most recently for The New York Times. She is now the senior editor of Changing Gears, a new public radio project looking at reinventing the Rust Belt.

Mickey, welcome.

Ms. MICHELINE MAYNARD (Senior Editor, Changing Gears): Thank you, Don.

GONYEA: So these plants the president visits today, you know them, I have been in each of these plants. And I recall going to events there going back 15, 20 years, where these two factories were held up as the leading edge of a bright future for both of these companies. Where are we today? Is this yet another of those kinds of moments?

Ms. MAYNARD: I don't know that these particular plants are the leading edge of anything. I think that it's a good thing that they've both survived, but so much is happening with the rest of the industry that's not involved with Detroit. You have a whole new American auto industry that's made up of companies from outside the United States that have been able to open dozens of new factories, literally, in the last 20 years. And my sense is, in manufacturing, that they're probably setting the pace.

GONYEA: So, we're a year after the bailout that really brought General Motors and Chrysler back from the brink. They are much leaner, they have been restructured, but are they where they had hoped to be, where they need to be?

Ms. MAYNARD: Well, they're on the path to where they need to be. And I believe there was an impression until even recently that eventually, the auto industry in Detroit would get back to dominating the American auto industry. I don't think that's possible anymore. For the last couple of years, foreign name plates have been more than 50 percent of sales in the United States. And I think what Detroit is getting used to is the idea that it's part of the American auto industry, but it isn't all of the American auto industry. And the biggest thing that Detroit needs to come roaring back is a strong economy.

But, you know, Don, something else has happened in the meantime. We've seen people's environmental consciousness raised over the past few years, and people are rethinking how they use automobiles. Do they need three cars? Can they get by with two? Can they take public transportation, ride their bikes? But you've had sort of social change go along with economic change, and I think that that is having very big ramifications for the auto industry.

GONYEA: So, it cuts two ways. You do have maybe increased demand for hybrids and more highly fuel-efficient cars. But people may be saying do I ever need that second car?

Ms. MAYNARD: That exactly the case. And you can see just in this past week with the Chevrolet Volt and the Nissan Leaf - we found out that both those vehicles are going to be on the market in the next few months. Now, the Volt is going to cost about $41,000 and the Leaf is not exactly a bargain at $32,000.

The difference is that, you know, Don, you and I have been going to press conferences, literally, all our adult lives where people were promising us that vehicles like these were coming. I think the difference now is they're actually here. And even if it's just a small amount of car sales, they are available.

GONYEA: GM, after the bailout, ceased to be a publicly traded company. Now, perhaps, as early as next month, it will file an initial public offering. How significant is that?

Ms. MAYNARD: It's important politically for both the Obama administration and for General Motors. First of all, the administration, when the initial public offering - which is the right to sell stock to the public - is filed, can very legitimately say our bailout worked. We took a very sick company. We overhauled it. Now it's a publicly traded company again. For General Motors, it needs both sort of that feeling that they are standing on their own two feet again, and they very much need to get rid of the government motors stigma.

Because as long as Canada and the United States own two-thirds of General Motors, then they can't get away from the very true perception that they are in business because of a government bailout. The IPO will be a very important moment for both Mr. Obama and for General Motors.

GONYEA: Micheline Maynard is senior editor of Changing Gears, a new public radio project, looking at reinventing the Rust Belt. Mickey, thanks.

Ms. MAYNARD: My pleasure, Don.

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