CNN, March 31, 2009, Tuesday

CNN

March 31, 2009, Tuesday

CNN

Obama taps czar to help autoworkers

Former Clinton official Ed Montgomery will focus on funneling federal funds to people and places hurt by the auto industry meltdown.

NEW YORK (CNNMoney.com) -- More pain is on the way for the people and communities that depend on the automotive industry. That's why President Obama has appointed an autoworker czar to look out for them.

Acknowledging that the sweeping government-led overhaul will likely mean more job losses, Obama Monday named a former deputy labor secretary to help direct federal funds to those hardest hit by the industry's meltdown.

Ed Montgomery, a dean at the University of Maryland who served in the Clinton administration, was appointed director of recovery for auto communities and workers. An economist specializing in job training and local development, Montgomery is charged with making sure displaced employees and struggling towns have access to federal stimulus funds and assistance.

The industry has shed more than 400,000 jobs over the past year, which has devastated company towns throughout Michigan, Ohio, Indiana and elsewhere.

"I will not pretend the tough times are over," Obama said in announcing the restructuring. Montgomery "will direct a comprehensive effort that will help lift up the hardest-hit areas by using the unprecedented levels of funding available in our Recovery Act and throughout our government to create new manufacturing jobs and new businesses where they're needed most -- in your communities."

Exactly what Montgomery can accomplish remains to be seen.

One of his main tasks will be to use the economic development and job retraining funds from the $787 billion federal stimulus package to assist autoworkers and communities that rely on the industry.

Also, Montgomery will collaborate with federal and state officials and lawmakers to develop initiatives to assist areas in revitalizing their economies. And he'll use existing job retraining programs -- such as the Workforce Investment Act, which he helped create -- to support workers.

Marshalling stimulus funds

Under the stimulus program, states will receive billions of dollars to build new roads and other infrastructure projects -- creating millions of jobs -- and to keep vital state services intact.

Michigan, for instance, is expected to receive about $7 billion with the aim of creating 109,000 jobs. The state at the center of the automotive crisis also suffers from the country's highest unemployment rate, which hit 12% in February.

Experts say Montgomery will have plenty to do. While the companies, unions and state officials aid people on the ground, the recovery director will serve as their mouthpiece in the nation's capital.

"This guy could help marshal federal policy in Washington to help workers,"said Andy Levin, deputy director of Michigan's Department of Energy, Labor and Economic Growth. Obama "will have someone at his end making sure the most aggressive measure are taken to help the autoworkers."

Montgomery, who serves on the president's auto task force and taught at Michigan State University in the late 1980s, referred an interview request to the White House, which declined.

Thanks to his past service in the Department of Labor, Montgomery is very familiar with federal funding for job retraining programs, said Bob Simoneau, deputy executive director of the National Association of State Workforce Agencies. These initiatives are also getting a boost from the stimulus program. The Workforce Investment Act, for instance, is receiving $1.25 billion for dislocated worker employment and training, while states can apply for millions of dollars in additional grant money.

The stimulus program also provides hundreds of millions of dollars to communities affected by foreign trade. They can use the funds to develop strategic plans to revamp their economies and to aid community colleges in developing or improving training programs for displaced workers.

Utilizing available resources

Montgomery can help make sure those affected are aware of the resources available to them. Though autoworkers have had access to training programs for decades, few of them take advantage of the opportunity, said Art Wheaton, industry education specialist at Cornell University's School of Industrial and Labor Relations.

Even those who enter the programs don't always stick with them. In the past, workers often would leave school to return to the industry when it revived. That return isn't likely to happen this time so the jobless need to partake in the retraining so they can find new careers, said Donald Grimes, senior research associate at the University of Michigan.

Across the nation, the unemployed are enrolling in retraining programs to find work in industries that are holding up in the recession, such as health care and education.

"People who used to work in the manufacturing plants won't find jobs like that again," Grimes said. "They need to get a new start in a field that's growing."

The stimulus package is also pouring money into creating jobs in new technologies and energy production. Montgomery's tasks include attracting defense, research and green industries to the Rust Belt, according to the White House.

In naming Montgomery, Obama is also sending a message to those who have been -- and will be -- affected by the reinvention of the American auto industry that he is concerned about more than just the companies' survival, experts said.

"It's a symbol more than anything else that he cares about the people being displaced," said Robert Scott, senior international economist at the Economic Policy Institute.