Mitt Romney Defends ‘Managed Bankruptcy’ for Auto Firms in Op-Ed
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(Image Credit: Jewel Samad/AFP/Getty Images)
PHOENIX – Mitt Romney renewed his criticism of President Obama’s auto bailout in an op-ed today, defending his often-criticized stance that “managed bankruptcy” would have been a better way to rescue the failing corporations.
Penning the op-ed in the Detroit News, Romney accuses Obama of engaging in “crony capitalism” as he “rewarded union bosses” when he orchestrated an $85 billion bailout for the auto industry in 2009.
“A labor union that had contributed millions to Democrats and his election campaign was granted an ownership share of Chrysler and a major stake in GM, two flagships of the industry,” Romney writes. “The U.S. Department of Treasury – American taxpayers – was asked to become a majority stockholder of GM. And a politically connected and ethically challenged Obama-campaign contributor, the financier Steven Rattner, was asked to preside over all this as auto czar.
“This was crony capitalism on a grand scale,” Romney writes. “The president tells us that without his intervention things in Detroit would be worse. I believe that without his intervention things there would be better.”
Romney goes on to suggest that the administration should “act now to divest itself of its ownership position in GM.”
“The shares need to be sold in a responsible fashion and the proceeds turned over to the nation’s taxpayers,” Romney says.
Having long argued that letting the auto companies go through a “managed bankruptcy” would have resulted in a faster turnaround, Romney used today’s op-ed to defend his position, which was first born in a 2008 New York Times op-ed titled “Let Detroit Go Bankrupt.”
“Managed bankruptcy may sound like a death knell,” Romney writes today. “But in fact, it is a way for a troubled company to restructure itself rapidly, entering and leaving the courtroom sometimes in weeks or months instead of years, and then returning to profitable operation.
“In the case of Chrysler and GM, that was precisely what the companies needed. Both were saddled with an accumulation of labor, pension, and real estate costs that made them unsustainable,” Romney writes.
But his 2008 op-ed, and his continuing assertion that bankruptcy would have been better for the auto giants, didn’t always play well with Michigan residents, many of whom were relieved to see the industry saved, regardless of the means in which it was done.
Today’s op-ed on the U.S. auto industry bailout, which began under the Bush administration, comes two weeks before the Michigan primary, a contest that some see as a must-win for the former Massachusetts governor. Born in Detroit and raised in the suburb of Bloomfield Hills by father Gov. George Romney, Romney mentions his Michigan roots throughout the piece, dubbing himself a “son of Detroit.”
“The dream of the Motor City is and always has been one of ideas, innovation, enterprise, and opportunity,” Romney writes. “And with a Detroiter in the White House, that dream can be realized once again.”
Romney is scheduled to campaign in Michigan Wednesday and Thursday and will give a speech at Ford Field next week. His wife, Ann Romney, will also campaign in Michigan on her own in the weeks leading up to the Feb. 28 primary.
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Posted by: rippedpockets | February 14, 2012, 10:20 am 10:20 am
More flip flops for the usual suspect, this guy changes opinions every day or whenever it suits him, no wonder no one likes him including the people who vote for him because they want Obama to go down. He has no chance against the president, all they need to do is replay all the stupid comments he made in the past.
Posted by: Don | February 14, 2012, 10:41 am 10:41 am
Bottom line is the U.S. auto industry failed to compete in a growing competitive global market. It’s been coming since the early 70′s. I saw it. The problem I see is if they can continue without more help from the rest of us.
Posted by: newcountryman | February 14, 2012, 10:51 am 10:51 am
Willard is not well liked in Michigan. He’s not considered ‘one of us’ because he isn’t. His dad’s popularity a few decades ago doesn’t help him one bit today. From an online article: “We remember how, back in 2008, Romney came home promising to do all he could to save the auto industry. And we believed him and voted for him and he won the primary here. Then, after he dropped out of the race, he wrote a New York Times op-ed that carried the headline “Let Detroit Go Bankrupt.” The opening sentence: “If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye………..The reason Santorum is gaining votes in Michigan isn’t because he’s so liked here, though his social conservative rhetoric plays well in the western side of the state. But it’s because we’ve been burned by Romney before. He tells the people in front of him what they want to hear. But when he sets his sights on a new shiny object, he changes the script to fit his new needs. We’ve seen him do it with abortion and health care reform. We’ve seen him do it with taxes. When Romney was running for the Senate in 1994, he sent the Log Cabin Republicans of Massachusetts, a gay rights organization, a letter saying “don’t ask, don’t tell” was the first of “a number of steps that will ultimately lead to gays and lesbians being able to serve openly and honestly in our nation’s military.” Then in 2007, when he was running for president, he said he would not change the “don’t ask, don’t tell” policy, and that changing it would amount to a “social experiment.”” —— Romney says anything to anyone. People still don’t trust him because he stands for everything, which really means he stands for nothing. Nothing but himself, and protecting the other one percent of the one percent.
Posted by: A Cynic | February 14, 2012, 11:05 am 11:05 am
GM just surpassed Toyota as the largest auto company in the world in sales. The bailout saved hundreds of thousands of jobs.
Mitt’s managed bankruptcy means selling assets, laying off workers until the company is a shell, then selling it to the highest bidder. This was his modis operendi at Bain
Posted by: tmferretti | February 14, 2012, 12:13 pm 12:13 pm
“Managed Bankruptcy” is something he excelled at. Dump the pension, fire the people, screw the contractors and the rich get richer with “consulting fees’ “parachutes” etc. I think Detroit and most of Michigan is pretty happy with how Obama handled things.
Posted by: pksk531 | February 14, 2012, 12:15 pm 12:15 pm
Is he serious??? Does he have ANY clue at all what we’ve been thru here in Michigan?? While Bush was telling the everyone “The economy is strong!”, all of us here in Michigan were looking at each other thinking, where is he??
If not for that auto industry “bailout”, my husband and I would BOTH be out of work by now. Romney has NO CLUE how much the economy of this state depends on the auto industry, it’s literally been here for a HUNDRED YEARS!
The company my husband works for had it’s worst year in 2009, almost closed down after being in business for 40 years. They are a metal fab shop in Warren whose Customers are auto industry related. In the very first quarter of 2010, they did as much work in that first quarter as they did in ALL of 2009.
The company I work for had a 50% auto industry, 45% military, 5% medical industry Customer base. In 2009 we got by due to the military aspect of our work. In 2010, the military aspect started to drop off, but the auto industry portion to off. By the end of 2011, we were now 20% military, 5% medical and 75% auto industry!
Romney’s NUTS if he thinks this state would have survived without GM and Chrysler. Ford could never have carried us all by itself.
And another thing people don’t realize is that for every UAW worker, there are 9 of us who work for automotive suppliers that are NOT union. I’ve never worked in a union shop in all of my work history, all 32 years of it.
Posted by: Paula | February 14, 2012, 12:25 pm 12:25 pm
Mexican Mitt knows he’s on the ropes.
Posted by: militant marker | February 14, 2012, 12:50 pm 12:50 pm
This stupid idiot still has no clue as to how important the government’s role in helping out the auto industry was. Without it, the auto industry would have been extinct and of you think the trade deficit is bad, what would it have been like if all auto manufacturing in this country went away and all cars/trucks were built in Japan/China/Mexico/Canada?
Posted by: neastsider | February 14, 2012, 1:10 pm 1:10 pm
Its interesting to watch everyone screaming over what is essentially tactics. Bush, Obama and Romney all knew that the auto industry needed help. And help they were going to receive. All this nonsense about letting the industry die is an absolute red herring to scare people into voting a certain way. And you’re all falling for it brilliantly. The difference between these paths to saving the industry comes to one point, “when do you give them the money and how much”. Since Bush was out of office before it got really serious, I can’t give an opinion there but with Obama and Romney it was with different approaches. Obama went in with a blank check at the start. Romney would have gone with with the capital needed once it was seen how much would actually be needed by the managed bankruptcy process. The first has still left the auto industry dealing with the overburden that got it in trouble in the first place while screwing anyone who wasn’t in a union. The second would have found middle ground, enforced real changes and streamlined the company with getting the money they only absolutely needed. Only time will tell who was right in this, Obama or Romney. Yes, they have an upswing because the economy is up-swinging a little bit. Lets see where they are at five years from now or even ten. Are they still vital and functioning or are they being done in AGAIN by the overburden that they are still carrying. Everything I’ve read on this so far says these companies are still plagued by the problems they got in trouble with originally. and now we taxpayers own shares in a company that if we sold today would lose us money. I’m not impressed.
Posted by: Wendilynn | February 14, 2012, 1:34 pm 1:34 pm
WENDILYNN
How much time do you need? GM has become as the largest auto company in the world in sales and hundreds of thousands of auto workers get a pay check. I’d call that a success.
Posted by: tmferretti | February 14, 2012, 1:59 pm 1:59 pm
Wendilynn – Bush KNEW the auto industry needed help. It was drowning while he was in office! This is not about tactics. Nobody’s falling for something brilliantly here, we’re LIVING it here and we have been for a long, long time now.
Remember one thing, if the auto makers had been allowed to claim bankruptcy, that would have put thousands of their suppliers out of business and unemployment would have sky rocketed even further.
Now go put your head back in the sand.
Posted by: Paula | February 14, 2012, 2:11 pm 2:11 pm
Other countries support their national industries so why can’t we do the same? At least that levels the playing field.
Posted by: JIMB | February 15, 2012, 3:54 pm 3:54 pm
Soooooooooooooooooooooooo, I’m all in for Romney. I don’t think the bailout worked, rember back when, oooooooh not to long ago, the auto industries had to discontinue Hummer, Saturn, Pontiac. Hmmmmmmmmmmmm, maybe if they would have done that before the bailout it would have came out just fine. Or, if they would have sold Hummer like they did instead of take a bailout.
Posted by: Kevin | February 28, 2012, 8:10 pm 8:10 pm