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Ellen Belcher is the Dayton Daily News opinion pages editor. She writes about state government, education, the environment, higher education and all things Dayton.
Martin Gottlieb is an editorial writer and columnist for the Dayton Daily News opinion pages. He focuses on the political process itself and does such national issues as war, the economy, taxes and Social Security, as well as a hodge-podge of local and state issues.Home > Blogs > A Matter of Opinion > Archives > 2009 > July > 15
Wednesday, July 15, 2009
Editorial: Strickland gamble has big risks here
If you’re excited that casino-style gambling might be coming to Montgomery or Warren counties, you’re jumping the gun.
The only thing to be excited about is that things are happening so quickly that this venture could go badly wrong here, thanks to Gov. Ted Strickland.
Warren County commissioners, who own the property where Lebanon Raceway is, don’t want to allow that track’s owners to bring in video lottery terminals. Now that the state is allowing 2,500 slots at each of Ohio’s seven racetracks, the raceway desperately wants them to prop up its teetering business.
So, in the budget bill, there’s a provision written just for Lebanon that allows the Ohio Racing Commission to transfer the raceway’s license to another site, so long as it’s not more than 50 miles from where it is now; there isn’t a track already in existence in the county it moves to; and that the new site is in a contiguous county.
Montgomery County fits all the fine print.
The only insurance against Montgomery or Warren County becoming the site of a new, but cheesy, glorified bingo hall is that both the county commission and the city commission or city council or township trustees in the relevant jurisdiction have to support a track — with slots — being built.
If those elected officials don’t like what’s being proposed, the state racing commission can’t sign off on the track moving.
Where to begin with the concerns:
— Lebanon’s raceway owns 100-plus acres of property in Warren County along I-75, according to Warren County Commissioner Pat South. That raises the possibility that the raceway owners are shopping for a deal and just using Montgomery County as leverage to get special considerations from Warren County.
— Gov. Ted Strickland ordered the Ohio Lottery Commission, which will oversee the new gambling machines, to require a minimum investment of $80 million over five years at the tracks where any slots are installed.
That money won’t go very far if the goal is to create a first-class entertainment venue. (The casino that was proposed for Wilmington, and that voters rejected last year, was a $600 million complex.)
— One site that’s being mentioned for a new track is the Austin Pike interchange. Plans have been in the works literally for years to make that a vibrant commercial area. Montgomery County has touted the site as its last chance to spur development along I-75 and to capture some of the growth that’s been occurring between Dayton and Cincinnati, but mostly toward Cincinnati.
Consenting to a horse track would be radically changing the vision for that area and could — depending on the quality of the enterprise — complicate attracting businesses.
Austin Pike is prime real estate. There’s no reason to settle for anything sub par.
— What not everybody understands is that the governor’s decision does not allow casinos. Rather, he’s taking the most liberal interpretation of a constitutional amendment that created the lottery and says it allows him to permit video lottery terminals — as if they’re a computerized version of scratch-off tickets.
There is no skill in playing slots, and critics rightly say that the machines too often suck money from people who don’t have it to begin with.
— Because the racetracks aren’t rolling in money and they’ll be required to put up $65 million in the next year — $15 million of it by Sept. 15 — if they want to have slots, some people believe the track owners will have to sell their racing licenses.
The significance of that is: The people Montgomery County officials are meeting with about Lebanon moving might or might not be the people really calling the shots.
In turning to gambling to bail Ohio partially out of its financial problems, Gov. Strickland is making a major public policy decision that gives Ohio’s seven horse racing tracks a monopoly on gambling. He’s hurriedly negotiated a deal that in all probability would look much different — and be better for taxpayers — if it had been vetted in the light of day and had been subject to meaningful public scrutiny.
Now because of his decision, Montgomery County and Warren County are both in the gaming interests’ sights.
They are looking out for themselves, not this region.
Permalink | Comments (17) | Post your comment | Categories: Editorials, Ellen Belcher, Montgomery County, Ohio politics, Suburban Communities
Editorial: IUE retirees getting shaft by court, GM
You might think that the people who run General Motors would have a soft spot in their hearts for the International Union of Electronic Workers. The IUE (now known as the IUE-CWA because of a merger) was the union that accommodated the company’s relatively early efforts to cuts its payroll costs.
Specifically, the IUE accepted tiered pay scales, meaning that new employees earned less and continued to earn less than older employees, the people whose jobs dated to the heyday of the industry.
The IUE took a lot of flak in labor circles just because it was being realistic about the company and its prospects.
Now, however, the IUE is being treated as if GM has something against it, preferring the United Auto Workers.
In GM’s out-of-bankruptcy agreement that was announced last week, health care benefits for IUE retirees weren’t protected.
The UAW retirees came out better, at least so far. They’ve had to make concessions along the way, too. But a UAW benefits fund — or VEBA, for Voluntary Employees Beneficiary Association — owns a large chunk of what’s being called the “new GM.” That company will be doing business unburdened by the old GM’s debts. How well the UAW retirees will do remains to be seen.
The IUE was promised a similar deal. However, the bankruptcy court decided that the new GM shouldn’t be confronting old debts to the IUE, because no sizable number of IUE workers will be working for the new GM.
The Moraine sport utility vehicle assembly plant that was closed in 2008 was the only remaining IUE plant. The number of IUE pensioners and dependents is reportedly about 50,000.
The court wants to do everything possible to give the new GM a fresh start and a good chance at success. Fine.
But the result so far is that IUE retirees are in the hands of what’s being called the “old GM” or “bad GM” — the part of the original company with all the debt and empty factories — which is still in bankruptcy and has no prospects for a happy ending.
GM has put on the table a plan to let IUE pensioners buy health insurance for $240 a month, a tenfold increase over current costs, with a $5,000 deductible. That would be a sudden, wrenching change for people on limited, stagnant income. It’s not good enough.
There must be a way for the government — so crucial to this whole process of reshaping GM — to make sure that IUE pensioners are treated fairly. Promises have to mean something.
A lot of people think that GM was too generous for too long with retirement benefits. But that’s irrelevant. GM workers and retirees made their plans according to what they were promised. They sought certain jobs, did those jobs, and retired at certain times, after calculating what was right for them.
GM does not deny that it made an agreement with the IUE creating a VEBA arrangement like the UAW’s. Meanwhile, the IUE can’t deny that sometimes agreements get abrogated in the bankruptcy process. That, in part, is what bankruptcy is about: giving a beleaguered company protection for doing things it otherwise couldn’t.
Nevertheless, right is right.
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Editorial: GM gets shot at new life surprisingly fast
With all the bad economic news these days, when something important actually goes better than expected, that should be noted.
Not long ago, the idea of an automaker going into bankruptcy seemed unthinkable, because bankruptcy proceedings go on forever, and nobody would buy a car from a company in bankruptcy.
Then Chrysler emerged from its bankruptcy in about a month. Even then, however, when General Motors entered bankruptcy proceedings, warnings were heard that things couldn’t be expected to go so quickly for GM, which was in a more complex situation.
But now, after about a month, GM has emerged in the form of a new company.
The law allows for a bankrupt company to be split into two companies, a good one and a bad one. The good one — the one with all the positive assets — gets a new lease on life. The bad — the one with the empty factories and big debts — heads toward death, as the court presides.
The provision almost sounds as if it was created for the auto companies. But it wasn’t. It was there before.
What’s now being called the new GM — and will officially be called the General Motors Company — looks a lot like what critics have said GM should have looked like all along: fewer models, fewer plants, fewer employees, fewer executives, fewer dealerships and much tougher union contracts. The company will make only Chevrolet, Buick, Cadillac and GMC vehicles.
The company’s design doesn’t assure its survival. It still has to make cars people want. But the top executives are saying that all the changes noted above will be accompanied by changes — and even foster changes — in the company’s culture that will result in such products.
(Toward that end, too, the new GM announced that it is canceling the retirement of Robert A Lutz, 78, who directed development of the electric car, the Volt, due in showrooms next year. Not all GM critics will be happy about that news, though.)
Make no mistake: It’s still a big company. GM will have 34 plants in this country, down from 47 last year. It’ll have 64,000 employees domestically (down from 91,000 last year). The worldwide number is 235,000. It’ll presumably still have a large share of the huge U.S. auto market, if not the 20 percent it had before the recession. (It also has half a million retirees.)
Because of its size, the company’s survival — albeit expensive to American taxpayers, at least pending repayment of $50 billion in loans — is better than the alternative: liquidation.
Bankruptcy Judge Robert E. Gerber rightly said liquidation would be “staggering” to the public. He wrote of the possibility of “grievous damage to all of the communities in which GM operates.”
The news of last week — when the new GM emerged — was certainly not all good, however. Leaders of the International Union of Electronic Workers-Communication Workers of America (IUE-CWA) are up in arms about the health care benefits of their retirees, including many in the Dayton area. That issue hasn’t been dealt with properly. An editorial on the subject will be in this space tomorrow.
Still, after a long, bumpy ride — though not as long as some had feared — a fabled American corporation comes out with a shot at new life. That’s good news for a lot of communities in the Midwest, which still have a lot riding on GM vehicles.
As bad as things are, they could be a lot worse.
Permalink | Comments (3) | Post your comment | Categories: Auto industry, Economy, Editorials, Local Business, Martin Gottlieb
