Mitt Romney Defends 'Managed Bankruptcy' for Auto Firms in Op-Ed
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.