More than 237,000 Michigan jobs (1 in 8 in Southwest Michigan and 1 in 7 in West Michigan) depend on trade with Canada

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Understanding the bridge controversy

By John Gallagher
Detroit Free Press Staff Writer

History: In the 1920s, the U.S. and Canadian governments authorized private companies to build crossings, including the Ambassador Bridge in Detroit and the Peace Bridge in Buffalo, N.Y. Most of the companies went broke during the Great Depression, and the bridges went into quasi-public hands under local bridge authorities. But the company that built the Ambassador Bridge, which opened in 1929, never lost control, so the bridge remained in private hands, to be acquired by Manuel (Matty) Moroun’s Detroit International Bridge Co. in the late 1970s.

QUESTION: Why do the state and Canada want a new bridge?

ANSWER: The Ambassador Bridge is too narrow for today’s needs. A bridge called the New International Trade Crossing, or NITC, would be six lanes wide, with dedicated lanes for prescreened cargo and travelers. That’s important for auto companies that rely on just-in-time inventory systems to speed manufacturing when they send shipments of parts to assembly plants.

The NITC also would connect directly to expressways, unlike the Ambassador Bridge, which dumps its traffic onto Huron Church Road in Windsor. The Morouns want to build a twin span alongside the bridge but it still would funnel traffic onto Huron Church.

Meanwhile, the customs plazas at the NITC, which would be about 2 miles downstream from the Ambassador Bridge, would be larger and more efficient than plazas at the Ambassador, speeding truck inspections.

Also, backers of the NITC contend that the project offers redundancy in case of a terrorist act or any other problem at either bridge. Losing the trade link would be a devastating blow to the regional economy.

Q: Who supports the NITC?

A: Gov. Rick Snyder and Michigan’s past living governors — two Democrats and two Republicans. The NITC also has widespread support from business and unions, including the endorsement of the Michigan Chamber of Commerce, the Michigan Farm Bureau, the Detroit Regional Chamber, and General Motors and Ford, as well as the Canadian government.

Q: What is the Crossing Agreement?

A: That’s a pact Snyder signed for Michigan and Canada’s Transport Minister Denis Lebel to create the NITC. Under it, Canada will create a Crossing Authority to solicit bids to design, build, finance and operate the new crossing. The agreement guarantees Michigan would pay no bridge costs.

Q: What is Proposal 6?

A: It’s a proposed state constitutional amendment, sponsored by the Moroun family, to require a statewide and a local vote before any new bridges and tunnels could be built between Michigan and Canada.

Q: What would the NITC cost?

A: The bridge, along with connections to nearby highways and the customs plaza, would cost about $2.1 billion.

Q: Who would pay for that?

A: Canada has agreed to front Michigan $550 million to pay its portion, to be repaid through tolls. The Canadians are also picking up part of the cost of the customs plaza on the U.S. side, part of which would be paid for by the U.S. federal government.

The U.S. government has agreed to count Canada’s $550 million as matching funds for U.S. highway funds for Michigan. Since local governments must pay a 20% match for federal highway funds, Canada’s payment would translate into more than $2 billion for state roads.

Q: What about cost overruns?

A: Canada has agreed to pay unexpected costs.

Q: What is the Morouns’ case against the NITC?

A: They say the governor lacked legal authority to sign a deal with Canada without legislative approval. The Morouns also say that, despite protections for Michigan taxpayers in the Crossing Agreement, state residents will get stuck paying for the NITC if tolls don’t cover costs.

Unions back plan for new public bridge

By Brent Snavely, Alisa Priddle and Nathan Bomey
Detroit Free Press Business Writers

Unions on both sides of the border support a new publicly owned international bridge and are surprised that UAW President Bob King might not.

“I am shocked,” said Canadian Auto Workers President Ken Lewenza, who was planning to call King on Friday for clarification. “Until I talk to Bob, I won’t believe it.”

Lewenza said the New International Trade Crossing “is the most significant infrastructure project in Canadian history. The CAW supports the bridge.”

Mike Jackson, executive secretary-treasurer of the 14,000-member Michigan Regional Council of Carpenters and Millwrights, said Friday the new bridge “seemed like a no-brainer to us” and would put many of its members back to work.

“We believe it’s a game-changer, we really do,” he said.

King was expected to return from South Korea on Friday. But the UAW provided no updates on its stand as of Friday evening.

Lewenza and Jackson are among those who reacted to media reports Friday that the UAW and Ambassador Bridge owner Manuel (Matty) Moroun have discussed a deal that would have the billionaire donate to the Proposal 2 campaign, a labor-sponsored ballot initiative, in exchange for the UAW’s support for Proposal 6, which is designed to scuttle Gov. Rick Snyder’s plans for a new bridge between Detroit and Windsor.

Proposal 6 would require a statewide vote for Michigan to spend money on international crossings. And Proposal 2 would enshrine collective bargaining rights in the state constitution.

The People Should Decide, the Moroun-backed group pushing Proposal 6, said reports of an alliance were nothing but “rumors and speculation.” The statement from Mickey Blashfield, Moroun’s director of governmental affairs, did not deny the reports.

The UAW has not taken an official position on Proposal 6.

It’s unclear how much money would go into backing the UAW effort, how it would be spent or how effective UAW higher-ups could be in delivering votes for Moroun’s Proposal 6, if a deal was consummated.

Many key labor groups on both sides of the border support the proposed new public bridge because it could create up to 10,000 construction jobs.

The bridge’s labor supporters include the Michigan State AFL-CIO, Michigan Regional Council of Carpenters and Millwrights, Canadian Auto Workers, Utility Workers Union of America Local 223, International Union of Operating Engineers Local 324 and Canadian Teamsters Local 879.

Jackson said Friday he had not spoken to King, but said the possibility of a UAW deal with Moroun was perplexing.

One contentious issue for the labor community has been where workers and materials will come from for the massive international project that would span two countries.

Some union activists have grumbled that Snyder approved a waiver allowing the bridge to be built with steel from Canada and the U.S. But Jackson said the carpenters group supports the measure.

“I think it’s fair,” he said. “I mean, Canada is putting up the initial money. I think it’s a little ridiculous to expect Canada to pay for it but not be able to use any Canadian steel.”

On the Canadian side, the CAW and the Canadian Automotive Partnership Council, a group of automakers, suppliers, unions, academics and politicians, have said the countries should use domestic content, employees and businesses.

Lewenza said bidding for contracts always creates controversy, but the bounty of work should be shared and balanced.

“The two sides should have a shared opportunity to supply steel and labor as part of the stimulus even though the Canadian government is fronting all the money,” Lewenza said. The Detroit Three automakers along with many major Michigan companies, including Meijer and Kellogg, also back the new bridge because it’s expected to make it easier to ship parts across the border.

Chrysler moves more than 1,300 parts shipments, 2,000 cars and trucks and logs more than 1,600 customs entries daily.

Billed as an enabler of future economic growth, the new bridge would offer direct freeway-to-freeway connections on both sides of the border.

That would eliminate massive traffic jams in Windsor along a stretch of many traffic lights between the Ambassador Bridge and Canada’s 401 highway.

Ford’s strong support of a new border crossing is unchanged, said spokesman Todd Nissen. The automaker opposes Proposal 6 and is neutral on Proposal 2.

“GM supports a New International Trade Crossing spanning the Detroit River,” GM spokesman Greg Martin said in a statement. “This initiative is necessary to ensure the region’s ongoing competitiveness and quick, reliable and cost-effective transportation.

Blizzard of cash obscures bridge issues

By Nancy Derringer/Bridge Magazine

The list of supporters for the planned New International Trade Crossing in Detroit reads like a roll call of distinguished Michigan stakeholders. Five governors. Five automakers. Twenty-three chambers of commerce. The state’s largest newspapers, corporations and most influential movers and shakers all have signed on in agreement that the state needs a new, modern link between the United States and Canada.

Why, then, did more than 477,000 residents sign petitions for a ballot proposal that would put its construction up for a popular vote?

Because the organization that stands to lose the most from the new bridge’s construction – the Detroit International Bridge Co. of Manuel Moroun and family, which wholly owns the 82-year-old Ambassador Bridge – has mounted a furious battle to preserve its own stake, bankrolling a campaign it calls “The People Should Decide” and represented by Proposal 6 on the November ballot.

Proposal 6 would require all new international bridges and tunnels built in the state to be pre-approved by voters statewide and in the individual municipalities where they would be erected. Further, it defines “new” retroactively, to those not open for business on Jan. 1, 2012, potentially undoing the international agreement for the new bridge signed by Gov. Rick Snyder and Canadian Prime Minister Stephen Harper in June. In that agreement, the Canadian government agrees to carry Michigan’s $550 million share of the costs.

While much has been made by opponents of the bridge’s $2.2 billion price tag, the NITC project is small potatoes compared to other major public works now under way. California has embarked on a high-speed rail project with an estimated cost nearing $70 billion; New York City is spending $6 billion to drill a new tunnel to bring water to the city.

No other state with an international border that crosses water – Maine, New York, Minnesota and Texas – has a similar law to what Proposal 6 would impose in Michigan, although Texas and Minnesota are like Michigan in having privately owned bridge crossings. (See box below right.)

Proposal 6 also would treat international crossings differently than other public bridges in Michigan, which number more than 10,000, according to a calculation by the Michigan Department of Transportation.

What happens after the vote?

“If it passes, people would realize very quickly that the unintended consequences are way more than they bargained for,” said Brad Williams, vice president for government relations for the Detroit Regional Chamber of Commerce, who added that he didn’t think it would necessarily stop the NITC from being built, even with its retroactive clause.

“(The crossing agreement between the U.S. and Canada) is a contract, and you can’t break a contract with an election,” he said.

Not all see it that way.

At an October news conference to announce the findings of an analysis commissioned and paid for by The People Should Decide, financial consultant Patrick O’Keefe said his company had found that the NITC project was unnecessary, not economically feasible and would end up costing the state $325 million in lost revenue from existing border crossings, including the Ambassador and Blue Water bridges and the Detroit-Windsor tunnel, as well as other costs involved with maintenance of stateside infrastructure

“The NITC is being built prematurely in advance of demand,” O’Keefe said.

Proponents say building demand is the whole point of the NITC.

“If Michigan is going to be competitive going forward, we need a bridge that moves at the speed of the global economy, and that means an expressway-to-expressway connection,” said Mike Johnston, vice president of government affairs for the Michigan Manufacturers Association. One of the criticisms of the Ambassador Bridge is that it doesn’t connect to Ontario’s 401 highway, and trucks arriving in Canada must go through more than a dozen stoplights to get there. The NITC would connect to I-75 on the U.S. side, and to the 401 across the river.

A duel with numbers

The Center for Automotive Research, in an analysis of the new bridge’s potential impact released in June, estimated the project will create thousands of jobs, both short- and long-term, in construction and new private investment. As many as 6,800 permanent jobs could be created, the report said, increasing Michigan’s gross state product by $630 million per year, with personal income and related revenues rising accordingly.

The automotive industry has been a particularly vocal supporter of the NITC. Bill Ford, executive chairman of Ford Motor Co., issued a statement at the time of the agreement’s announcement, “strongly supporting” the bridge, “which is projected to bring in new jobs and investment into the state, as well as strengthen its role as a center of international trade.”

Figures kept by the Public Border Operators Association, which gathers data on truck and tunnel crossings between the U.S. and Canada, show traffic has been slowly rising on the Ambassador Bridge since it hit a trough in 2009. PBOA President Robert Horr said traffic is not only dependent on general economic health, but in differences in the exchange rate between the Canadian and U.S. dollar. The two currencies have been almost at par in recent years, which tends to flatten out traffic.

The other side has its own set of numbers.

Many of them were laid out by O’Keefe at the October news conference. They point out to reduced crossing traffic since the start of the recession and estimated cost overruns at the NITC to be at least 10 percent, which they claim puts the Canadian “unrecovered investment” at $8 billion, based on the bridge’s announced $2.1 billion cost.

O’Keefe defended the independence of his analysis, noting his firm insisted on being paid up front. He said its conclusions are defensible because “we were the first to pull together the disparate pieces of information,” and said economic analysis until now has been “conducted in silos.”

“The rhetoric doesn’t support the facts,” O’Keefe said. “Everyone wants to turn Michigan into a transportation hub.” However, “We believe this is being implemented in a way that could do economic damage to existing crossings.”

In December 2011, Bridge Magazine looked at the business case for a second Detroit-Windsor span.

“If freight traffic crossing the Ambassador is lower, and there’s no reliable data on the cost of delays, why is a new bridge (with a price tag of $2.2 billion for the proposed public bridge and $500 million for the Moroun bridge) needed?,” the report asked.

Proponents’ answers centered mainly around two ideas: redundancy and capacity. The more of both, the more likely Michigan was to benefit, they argued then – and still argue now.

But if Proposal 6 passes, don’t expect a vote on the NITC anytime soon. Tom Shields, spokesman for  Taxpayers Against Monopolies, an anti-Prop 6 group, says the most likely immediate effect will be more litigation from the Moroun family, as they seek to stop the NITC.

If Prop 6 fails, Shields said, construction won’t begin immediately. That process depends on the issuance of a presidential permit from the U.S. Department of State, and the public-comment period for that only ended recently.

On TV: lots of misinformation

Pro-Prop 6 interests have been advertising heavily, running spots on TV and on the Web, as well as other media. The Michigan Truth Squad has generally found its ads to be misleading. The most recent crop include what appear to be average Michiganians (they’re not identified) making claims that are not supported by facts, including “How can they tell us there’s no money for education and schools, but there’s money for a bridge,” and “Do you know how many police, firefighters, teachers, could we hire with the money they’re going to spend on this bridge?” Truth Squad investigation has found no valid basis for any of those claims, concluding:

“The battle over a second bridge is about money – the Moroun family’s (owners of the Detroit International Bridge Co.) money. The expectation is that a second bridge will reduce traffic on the existing Ambassador, thereby costing the Moroun family money. There is a reason that the family interests have spent millions in campaign contributions, lobbying efforts and TV ads in recent years to stop the NITC project – not to mention what sums have been spent by Moroun interests in legal challenges to the project. Michigan voters may want to ask themselves one question: Why are Moroun family interests spending millions to ‘protect’ the average taxpayer?”

“We’re up against one billionaire who will say or do anything to protect his monopoly,” said Williams. “He has unlimited resources and no obligation to tell the truth.”

Staff Writer Nancy Nall Derringer has been a writer, editor and teacher in Metro Detroit for seven years, and was a co-founder and editor of GrossePointeToday.com, an early experiment in hyperlocal journalism. Before that, she worked for 20 years in Fort Wayne, Indiana, where she won numerous state and national awards for her work as a columnist for The News-Sentinel.

At a glance: Proposal 6

WHAT VOTERS WILL DECIDE: If you vote for Proposal 6, it is effectively a vote to stop – or at least delay – the New International Trade Crossing bridge between Detroit and Windsor. If the measure passes, additional elections may decide whether the project proceeds. If you vote against Proposal 6, effectively you are supporting the New International Trade Crossing and existing state policy on the construction of bridges, international or otherwise.

WHAT THE ADS SAY: Proponents of Proposal 6 have used ads to argue that the NITC is not economically viable; that politicians are untrustworthy; that the bridge will cost far more than anticipated; that, somehow, Michigan taxpayers will pay for it. Opponents of Proposal 6 have used ads to argue the bridge is a vital economic link; that Canada will bear the cost of the bridge; that the backers of Proposal 6 are motivated by thei personal financial interests.

WHAT THE TRUTH SQUAD SAYS: Reports by the Michigan Truth Squad have found that ads favoring Proposal 6 were inaccurate and misleading. A flurry of fouls, from flagrant to technical to regular, have been called on the pro-Prop 6 side. The pro-Prop 6 campaign appears to be the least accurate ad series in the short history of the Truth Squad. The Truth Squad found that ads opposing Proposal 6 were mostly fair, though warnings were issued on definitive statements about the life expectancy of the Ambassador Bridge and about the nature of international trade traffic.

ON THE BALLOT: PROPOSAL 12-6

A PROPOSAL TO AMEND THE STATE CONSTITUTION REGARDING CONSTRUCTION OF INTERNATIONAL BRIDGES AND TUNNELS

This proposal would:

Require the approval of a majority of voters at a statewide election and in each municipality where “new international bridges or tunnels for motor vehicles” are to be located before the State of Michigan may expend state funds or resources for acquiring land, designing, soliciting bids for, constructing, financing, or promoting new international bridges or tunnels.

Create a definition of “new international bridges or tunnels for motor vehicles” that means, “any bridge or tunnel which is not open to the public and serving traffic as of January 1, 2012.”

Should this proposal be approved?

YES ___

NO ___

Governor Rick Snyder guest-hosts Paul W. Smith Show, discusses auto industry comeback and NITC

Governor Rick Snyder guest-hosted the Paul W. Smith Show yesterday and discussed a wide range of topics including the comeback of the auto industry in Michigan and the importance of the New International Trade Crossing. Click on the links below to listen to the podcasts.

Interview with Bill Ford, Executive Chairman of Ford Motor Company

Interview with Roy Norton, Consul General of Canada

Experts say new international bridge won’t cost Michigan taxpayers

By John Gallagher
Detroit Free Press Business Writer

Claims that have bombarded Michigan voters for months that taxpayers will be stuck with the bill for a multi-billion dollar bridge to Canada are not based in reality, said three independent law professors asked by the Free Press to review an international Crossing Agreement signed in June.

The advertising campaign from the People Should Decide, a group financially backed by Ambassador Bridge owner Manuel (Matty) Moroun and his family, has pushed that consistent message in several rounds of anti-bridge ads that are misleading, said two advertising experts who reviewed a recently released ad, also at the request of the Free Press.

Jennifer Henderson, a law professor at University of Detroit Mercy, John Mogk, a law professor at Wayne State University, and Marcia Valiante of the University of Windsor said the Crossing Agreement between Gov. Rick Snyder and Canadian Transport Minister Denis Lebel is crystal clear that Canada pays for the bridge and then recoups Michigan’s share, about $550 million, from future bridge tolls — not from Michigan taxpayers.

“It very clearly says it’s not funded by Michigan. … And throughout the agreement those words are repeated,” Henderson said.

Even so, the two ad experts say the anti-bridge message might be resonating because it’s working like political attack ads — thumping a single message even if it’s short on context or supportable facts.

The People Should Decide says its analysis of bridge finances is sound and that approval of Snyder’s New International Trade Crossing, and other projects like it, should be put to citizen votes. They say its consultant has determined costs for the bridge will skyrocket and that other “hidden costs” will saddle Michigan taxpayers with unwanted expenses for the next 50 years.

Recent ads claim the new bridge will end up costing $8 billion — nearly four times the official estimate — and force Michigan to lay off police and teachers and even tap senior citizen pensions to cover the cost.

“Will the ad be effective? Probably. Is it legal? Probably. Is it ethical or fair? Probably not,” said Hugh Cannon, a professor of advertising at Wayne State University.

Ballot issue in play

The Free Press asked the local professors for their opinions in light of a Moroun-backed ballot referendum, which, if approved, would create a constitutional requirement that any new international bridge or tunnel get a statewide and local vote before Michigan could spend any money. The referendum language says it would apply retroactively, impacting the NITC, to be built 2 miles downstream from the Ambassador. That issue, however, likely would be decided in court if the referendum passes, legal experts have said.

Mickey Blashfield, director of government relations for the Moroun business network and head of the People Should Decide effort, points out that the Crossing Agreement contains a clause that allows the terms to be changed in the future, which, he says, could mean a reshuffling of financial responsibilities. And a reworking of that agreement, he said, is more likely in the event of construction cost overruns and shortfalls in future toll revenue, according to the recent study paid for by the Moroun-backed group.

“Different experts have tackled this cost issue from different angles, but the one thing they all seem to agree on is the fact that there’s no such thing as a free bridge,” said Blashfield, whose group commissioned O’Keefe & Associates financial consulting firm of Bloomfield Hills to examine the new bridge project’s financial structure. “With so much on the line, the people deserve the right to decide how public money is best spent.”

Major corporations, including Detroit’s three auto companies, Honda, Toyota and various auto suppliers, back the NITC project, plus multiple business groups across the state, including the three largest chamber organizations — Detroit Regional Chamber, Grand Rapids Chamber and Traverse City Area Chamber of Commerce. They call the bridge a boon for Michigan’s economic future, saying traffic across the NITC inevitably will increase as the economy in Michigan and Ontario expands and the advantages of the new modern bridge become apparent to users.

Brad Williams, vice president of government relations for the Detroit chamber, said Detroit needs another international crossing option because drivers who cross the Ambassador Bridge have to contend with 18 stoplights in Windsor.

He said many European goods making their way into the U.S. arrive to Canada at its deepwater port in Halifax, Nova Scotia, but the trucks carrying those goods need a more efficient way to cross the border into the U.S.that doesn’t involve navigating Windsor traffic.

“Detroit is a logical choice. There’s a real opportunity here to build out a transportation, distribution and logistics industry,” Williams said. “The auto industry is completely integrated between Ontario and Michigan.”

Checking the claims

The Michigan Truth Squad, an effort connected with the nonprofit Center for Michigan think tank, issued a “flagrant foul,” its toughest verdict, against the People Should Decide’s claims made in advertisements, mainly that Michigan taxpayers will end up paying for the bridge and that the state’s debt load will increase because of it. The group characterizes a flagrant foul as a “statement that distorts or incorrectly states a fact.”

The group explains its verdict on its website: “These ads repeat claims, or advance new variants of old claims, that do not match available documents. The agreement with Canada puts the financial onus on Michigan’s neighbor, not Michigan, for paying the bills, including interest. Since Michigan is not appropriating construction dollars, no dollars are being diverted away from other public uses. Michigan is not increasing its debt load with the NITC project.”

The group said it is evenhanded in its assessments and looks at political commercials and speeches, issue advertisements, news releases, political websites and white papers. The group examines claims suggested by the public.

There have been several rounds of Moroun-backed ads that all push the idea that the cost of the bridge to be covered by Canada will somehow backfire on Michigan taxpayers. The Moroun-backed group has spent an estimated $10 million so far on the ads.

A recent ad called “Tough Choices,” says the bridge will become so expensive that Michigan would be forced to lose “quality teachers, cops on the beat, firefighters and EMTs,” and to reduce pension payments to seniors.

“Real cuts hurting real people,” the voice-over says. “Now that we know how much this bridge could cost us, shouldn’t the people decide?”

Cannon of WSU said the ad and others like it are dangerous because they are “deliberately using misleading imagery to “push the electorate to a certain decision,” which “undermines the very foundations of our political system.”

At the same time, Michael Bernacchi, a professor at University of Detroit Mercy, said the ads may be effective simply because they’re so bold and aggressive.

“I wouldn’t like to be combating this from the other side,” he said. “They’re out there first. They’ve been out there for a considerable amount of time with a single message. It’s developed a whole brand — it’s simple: ‘No bridge.’ “

Lt. Gov. Brian Calley, who serves as Snyder’s point man on bridge issues, condemned the “Tough Choices” ad.

“Their claims keep getting more bizarre,” he said. “They’re throwing out numbers. I don’t know what’s next. One hundred billion? A trillion? They don’t seem to be bound by any factual information.”

New anti-NITC ads starting this week follow the same story line as the others, depicting ordinary people worrying about their finances as the expense of a new bridge looms, threatening their futures. Central to the Moroun case is the claim that Michiganders will get stuck paying for the bridge despite contractual assurances to the contrary.

The legal ties

The Free Press asked the three law professors to review the Crossing Agreement language and give their opinions about the strength of protections for Michigan taxpayers in the document.

Valiante of the University of Windsor said, “The basic concept is that Canada will pay for everything up front then will recoup those costs through tolls and other revenues.”

Mogk, an expert at WSU on development issues, said, “I think it’s airtight on that question.”

On the first page of the agreement, it says the project will be built “with funding approved by Canada, but with no funding by the Michigan Parties. The Michigan Parties are not obligated to pay any of the costs of the new International Crossing.”

And on page 30 of the agreement, it says, “The Michigan Parties shall not be required to fund any International Crossing Costs, Michigan Interchange Costs, U.S. Federal Plaza Costs, Crossing Authority Costs or International Authority Costs.”

There are multiple similar references throughout the agreement.

Henderson noted that the agreement does state that the parties could amend the document in the future, which could mean some new payment scheme that might include a cost to Michigan. But she said major changes are only a theoretical possibility and not something likely to happen.

Change of heart?

Blashfield, head of the People Should Decide, contends it’s more than theoretical and a likely scenario as the Canadians find themselves responsible for a bridge that cost too much and with fewer tolls than predicted to cover the tab.

He pointed out that any shortfall in tolls allows Canada to collect its amount due plus interest from future revenues, creating a snowball effect moving forward that will push up the bridge cost to more than $8 billion, according to a study commissioned by the People Should Decide from the O’Keefe & Associates financial consulting firm of Bloomfield Hills.

Patrick O’Keefe, founder and CEO of the firm, told the Free Press the figure assumes a 10% cost overrun on construction costs, a 20% shortfall on toll revenue and a 50-year time frame for the mounting debt and interest to grow.

The analysis doesn’t explain how Michigan taxpayers would become responsible for the financial burden — which, according to the crossing agreement, belongs to Canada — nor does it assess the likelihood of toll revenues falling short.

According to the firm’s website, O’Keefe “is recognized as an expert in the fields of corporate reorganization, debt restructuring, turnaround consulting, refinancing solutions, due diligence support, valuation and litigation support.”

Blashfield said other “hidden costs” of the project also will burden Michigan taxpayers over the years. Among those:

• Tolls on the Blue Water Bridge that now go to Michigan will in part go to Canada in the future as some traffic diverts to the new bridge.

• Homeowners in Detroit’s Delray neighborhood, where the new bridge will land, will no longer pay property taxes once they’ve been moved out.

• Workers employed by the Ambassador Bridge who might lose their jobs to competition from the new bridge will pay less income tax.

Backers of the new bridge respond that new commerce generated by a more modern and efficient bridge will more than make up for any incidental economic losses, including employing its own bridge operators and construction workers. The new bridge will be wider, have more modern plazas on either end and provide seamless connections to expressways on both sides of the border.

The backers, including the governor’s office, point out that Delray is an economically downtrodden area with high unemployment, and most residents there are happy to be bought out so they can move.

Carl Smith, 60, favors construction of a new bridge, even if it means he will be forced to move from the Delray neighborhood where he has lived most of his life.

“It’s going to create jobs. It’s going to create jobs during construction and it’s going to create jobs when it opens,” he said.

Car Makers Report Big August Sales Growth

The Wall Street Journal

By Christina Rogers

Consumers flocked to dealer showrooms last month, throwing off higher gasoline prices and worries about the economy, as Chrysler Group LLC, General Motors Co. and Ford Motor Co. each reported double-digit sales gains in August from a year earlier.

The solid showing by the Detroit Three lifts hope August could be one of strongest sales months of the year, especially since many Japanese auto makers are expected to post big volume gains. A year ago sales of Japanese cars were depressed because of shortages stemming from the March 2011 earthquake that disrupted production.

General Motors’ U.S. auto sales rose 10%, Chrysler’s rose 14%, and Ford’s results improved 13%. Toyota Motor Corp.’s U.S. auto sales climbed 46% and Honda Motor Co. posted a 60% gain, both from year-ago weakness.

GM and Chrysler estimated the industry’s annualized sale pace was 14.6 million cars and light trucks. August new-car sales are expected to rise 20% from a year ago and 12% from July, car-shopping website Edmunds.com said last week.

Buyers seeking to replace aging cars and trucks boosted auto sales last month as did an improving housing market, which contributes to higher pickup truck sales.

“Though we are seeing most of the economic conditions stabilizing and job market not improving as much as we hoped for, I think pent-up demand really is the driving force for retail sales,” said Jenny Lin, a senior economist for Ford.

“We believe that the recovery in the housing sector is continuing to support our full-size pickup truck sales,” she said. Sales of Ford’s F-Series pickups and Chrysler’s Ram trucks each climbed 19% while GM said its Chevrolet Silverado rose 4% from a year earlier.

Pickup truck sales made up 11.2% of the total market, up nearly a percentage point from earlier in the year, Ford said.

GM’s overall August sales rose 10% to 240,520 cars and light trucks, with the increase led by its Buick brand. Sales of Chevrolet vehicles, the company’s largest brand, were up 11% and total Buick sales improved 12%. Total Cadillac sales grew 11%. GMC sales improvement lagged, rising just 3.7%

Ford U.S. sales rose 13% to 196,749 in August. Sales of its Focus compact were up 35% to 19,053 vehicles, the company said.

Chrysler, majority owned by Italy’s Fiat SpA, said its sales rose 14% last month to 148,472 vehicles for its best August sales since 2007. Fiat posted the biggest increase with sales up 34%. Sales of its namesake Chrysler brand were up 25%, reflecting a 10% rise in Chrysler 200 sales and 65% growth for the Chrysler 300.

Honda, which like Toyota was hobbled a year ago by natural disasters, said it sold 131,321 vehicles, up 60% from year earlier sales on strong demand for its Civic and Accord cars.

Nissan Motor Co., which recovered fast from Asia’s natural disasters last year, said its U.S. sales rose 8% in August to 98,515 cars and light trucks, with its namesake brand up 6% and the Infiniti luxury brand rising 24%.

Hyundai Motor Co. said its U.S. sales climbed 4% last month to 61,099 cars. Its affiliate, Kia Motors Corp., reported U.S. sales climbed 21.5% over a year ago to 50,028.

Month-end dealer inventory in the U.S. stood at 687,354 units, up 3.6% from the prior month.

August had 27 sales days, while the year-ago month had 26.

Toyota has bounced back from the impact of last year’s Japanese earthquake and tsunami and reported monthly year-over-year sales gains since November. Last month, Toyota posted its highest quarterly profit in four years and lifted its full-year production forecast to an industry-record 10.05 million vehicles.

Toyota reported it sold 188,520 vehicles in the U.S. last month, up from 129,483 a year earlier and 14% above July’s total of 164,898.