Huffington Post Detroit
by Matt Sledge
DETROIT – In this city of relics, one rises above the rest: the Ambassador Bridge, the sole route for almost all freight traffic traveling from here to Canada, and its two 386-foot tall towers. Open since 1929, the bridge is an iconic sight to Detroiters. But even icons have their flaws.
The Big Three automakers so critical to Michigan’s economy say they are dangerously reliant on the narrow, 82-year-old bridge’s continued good condition. An effort to build a replacement, called the New International Trade Crossing, failed a key vote in Michigan’s state Senate last month. Lawmakers balked, even though the state’s $550 million contribution required to bring in federal funding would have been paid for by the Canadian government.
A quarter of the United States’ freight traffic with Canada crosses over the Ambassador Bridge. Were severe weather or structural deficiencies to close the bridge — even just briefly — the “just-in-time” inventory system that the automakers increasingly rely upon could be severely disrupted. Factories on both sides of the river could close within hours: Chrysler, for example, says that engines from Trenton, Mich., cross over for assembly in Canada every day.
“You have a significant bottleneck, the worst bottleneck in the North American freeway system,” said Michigan Lt. Gov. Brian Calley, who along with a fellow Republican, Gov. Rick Snyder, has aligned himself with labor and the Big Three in favor of a second bridge over the Detroit River.
Efforts to replace or complement the bridge, however, have hit a bottleneck of their own. In a fluke of history, the Ambassador is controlled by a single, privately owned company — one that traces its lineage back to the original franchise created by Congress to build the bridge in the 1920s.
“I believe it’s the only international border crossing that is privately owned,” said Robert Puentes, senior fellow at the Brookings Institution’s Metropolitan Policy Program. (The Ambassador is the only major privately owned U.S. international crossing; the Fort Frances-International Falls Bridge is also privately owned.)
In 1921, Congress gave a private company backed by prominent Detroiters a franchise to build a bridge to Canada. The move followed years of schemes to build a tunnel or a bridge, spurred by complaints from private business that crossing the river by ferry, treacherous in winter, was denying them access to markets.
When the bridge-makers began their struggles, there was “no way to know if this is going to work,” according to Robert Sedler, a law professor who consults for the company that owns the bridge.
“It’s a daunting engineering feat to get a suspension bridge over the Detroit River between Detroit and Windsor,” he added. “Also, can you make a financial go of it? Will there be enough traffic over the years to make a financial go of it? So the government of the United States, and the Government of Great Britain, which then had what we call the Dominion of Canada, said, ‘let’s make a deal.'”
The deal made was for the untested bridge to be built with private money. Shares in the bridge company eventually passed into the control of Manuel “Matty” Moroun, who was born two years before the bridge itself opened in 1929. For decades, in courts and in the halls of power, Moroun has fought a series of battles to keep his hold on the bridge’s highly lucrative tolls. Detroit’s river crossing options are frozen in time — and, just as they were during the early 20th century, agricultural and manufacturing interests aren’t happy about their current options. Moroun’s company, the Detroit International Bridge Company, declined to comment for this article.
Since Moroun bought out control of the bridge from Warren Buffett in 1979, his control of the span has rested on a long series of lawsuits, many of which he has lost, but which have nonetheless come at great cost to his opponents. All the while he has been taking in the tolls. In 2004, Forbes estimated Moroun earned $60 million a year from the bridge. As of September, his family’s net worth was estimated at $1.5 billion, according to Forbes.
More recently, Moroun has claimed that he would like to build his own complement for the Ambassador by “twinning” the span. Critics say he’s simply blowing hot air to make a competing bridge look unnecessary — but he’s used his twin span idea as grist for yet another lawsuit, this time against both the United States and Canadian governments.
Outside of court, Moroun has spent vast sums waging a ferocious battle to lobby the Michigan state legislature.
“The Morouns spent over 5 million dollars on a statewide, actually nationwide, ad campaign that really distorted a lot of the information and contained frankly outright lies in so many instances,” said Lt. Gov. Calley, who has taken the lead on Michigan’s effort to build a new bridge.
The bridge company controlled by Moroun has said the new span would violate the original congressional franchise, which it says has given the company the exclusive right to bridge the Detroit River in the city. Calley dismisses that agrument as “just them throwing garbage up against the walls,” but the bridge company has hired Sedler, the law professor, to make their case.
“Why is it that this one, this private company owns the Ambassador Bridge and has a monopoly?” asked Sedler, who teaches at Wayne State University in Detroit. “Simple answer: because Congress has so provided.”
Sedler said the original 1921 act that created the bridge company’s authority to start construction over international borders still governs who can build a bridge across the river — and it excludes competitors, at least until Congress passes another law specifically approving a new one.
Proponents of the new bridge, however, have noted that another law passed in 1972 gave states the authority to negotiate with foreign countries over new bridges. They also point to competing routes to Canada, like the Blue Water Bridge and the Detroit-Windsor Tunnel, which is too small to handle big tractor trailers, as evidence that the Ambassador’s franchise from Congress is far from exclusive.
“Without any explicit non-compete clauses in any authorizing act or agreement, it seems to us nonsense to claim the Ambassador Bridge company has any exclusive rights or legal protection from competition,” said Peter Samuel, a writer who maintains the TollRoadsNews, a private online newsletter covering the industry.
Sedler’s arguments were dismissed out of hand by the new bridge’s proponents, and they have played only a very minor role in state Senate hearings over the bridge. Nevertheless, they demonstrate just how important the simple fact that the bridge was built privately, and remains privately maintained, has remained. A committee in Michigan’s state Senate seems to have been swayed by the argument that a new bridge, even though it would be built under a so-called “public-private partnership,” represents an assault on private enterprise. At no other international crossing in the country could a similar argument arise.
For now, Moroun has successfully painted his highly lucrative bridge, which has received extensive government subsidies in the form of $230 million in improved highway connections, as an underdog. He has had the help of Americans for Prosperity, the Koch brothers-backed organization. Annie Patnaude, deputy state director for AFP, said her group opposed a new bridge because it was “government sponsored.”
“We’re definitely pro-business,” she said. “We look at the Ambassador Bridge as a privately-owned bridge that seems to be working fairly well.”
Proponents of the new bridge argue that the fortunes of many more people than Moroun and his family are on the line.
“We have way too much at stake for us to put protection of a monopoly against literally hundreds of thousands of jobs,” argued Calley, “so their claim that somehow this is about them is strange, because it’s only about the employers in the state of Michigan.”
So far, the inertia of decades, and a billionaire’s campaign dollars, are winning in Michigan. Gov. Rick Snyder has said he will come back to the legislature within months, after a “cooling off period,” to once again press forward with a new bridge. But Bridge Company critics admit that after so many years spent defending his bridge, Moroun may have a few more tricks up his sleeve.
“Prolonging the status quo for as long as they possibly can would seem to be in their interests,” said Roy Norton, Canada’s consul in Detroit. “And they’re quite prepared, it would seem, to put their interests ahead of those of the people of not just the state of Michigan, but frankly the entire industrial heartland of Canada and of the United States.”
Read more on how the battle over building a new bridge has affected the surrounding communities on Friday.