Michigan Governor on GM CEO Resigning Under Pressure From White House

This is a rush transcript from "Your World With Neil Cavuto," March 30, 2009. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: All right, well, Wagoner, as you know, gets shown the wagon. The president says the GM chief is out because we’re paying for the wagon, and it’s a lousy wagon.

Now the governor of Michigan here to say Rick Wagoner might have just gotten a lousy rap. Governor Jennifer Granholm is now on the unprecedented government shakedown at the biggest government shakeup.

So, Governor, always good to have you.

Are you saying that Rick Wagoner got a raw deal, or what?

GOV. JENNIFER GRANHOLM (D), MICHIGAN: No. I mean, I think Rick Wagoner, he is a good man and he has been with the company for 31 years.

And I think he would be the first to say that it is not about him, that it is really about the viability of the auto industry. Everybody understands that we want a fresh start. The administration wants a fresh start.

But, ultimately, this is about a viable manufacturing sector in this country and a viable auto industry. So, behalf of the home team, I think, you know, Rick Wagoner took one.

CAVUTO: Still, his successor, Fred Henderson, was apparently telling employees and dealers today, Governor, that if the company does not significantly accelerate these restructuring efforts it’s going to end up in bankruptcy.

GRANHOLM: Yes, I think...

CAVUTO: Couldn’t we have avoided this whole mess if — if that were bandied about in the very beginning, because that’s where we might be going anyway?

GRANHOLM: You don’t think that it has been bandied about?

(LAUGHTER)

GRANHOLM: I do that think that everybody has been talking about this question of bankruptcy for a long time. I know that I have been one of the strongest voices opposing it.

And what I heard the president say today is that bankruptcy remains an option. We have given 60 days to General Motors to try to reorganize and to make sure that it gets the haircut it needs from its — its creditors and bondholders.

But, if it does not achieve that, then, if they have to go through bankruptcy on the backside of that, it is not a liquidation. It’s not an elimination of jobs.

What I heard him say is that he is committed to a viable auto industry. And if that is what it’s going to take to make that — those haircuts that are necessary, then he’s going to support that.

But, ultimately, that is a last resort. The best thing would be for the — them to achieve the reorganization necessary without having to go to bankruptcy.

CAVUTO: But part of that tough medicine might be really redoing these legacy contracts with unions that unions so far seem loathe to do. They have addressed a lot of present salary, benefit, related cost. They do not go back in time to some of these legacy costs that are particularly onerous, Governor.

GRANHOLM: Well, they have given an awful lot going forward. You are right. Their starting pay is half of what it used to be.

(CROSSTALK)

CAVUTO: But should they do more about the past stuff?

GRANHOLM: Well, I mean, but here’s the question. I mean, you have — they have off-loaded all of their health care to the Voluntary Employee Benefits Association.

So, the real question is, do you go back and do you break promises to people who you have made promises to? That’s why you have got a guarantee on the federal level of pension benefits.

CAVUTO: But a lot of people have had promises broken, right?

GRANHOLM: Yes, absolutely.

And here’s — I mean, that is really the — the ultimate — one of the ultimate questions. It is true with the other stakeholders as well.

CAVUTO: Yes.

GRANHOLM: It’s true for the bondholders. It’s true for the creditors. How much do you put the burden on one creditor or another?

Ultimately, though, Neil, this is really — it is about this particular question, but it is much more...

CAVUTO: OK.

GRANHOLM: ... about our communities in this country, the communities that are affected by the auto industry, and the workers who are affected by the auto industry...

CAVUTO: OK.

GRANHOLM: ... and supporting them, as well as the industry.

CAVUTO: Understood. Governor, great having you.

GRANHOLM: Yes. You bet.

CAVUTO: Thank you very much.

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