Mitt Romney: Let Detroit Go Bankrupt
That’s what the would-be president says in Wednesday’s New York Times. He says a bailout would guarantee the demise of the auto industry.
Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course – the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.
Romney, whose father once ran American Motors, says retiree benefits must be reduced and other labor agreements changed because of the $2,000 per car those agreements cost, which make American cars unable to compete with those made overseas. And current management has to go, too. and management salaries need to be cut.
A managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs. The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk.
In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check.
Ok. Well, what are your thoughts about it? I’m not sure myself.
November 19th, 2008 at 11:38 am
Alan…Love your radio show, enjoy you everynight on H&C (it should be C&H, and Liberaland is great. I do believe, however, George Romney was the head of AMERICAN Motors.
November 19th, 2008 at 11:42 am
According to Wikipedia, you’re correct, Larry.
November 19th, 2008 at 11:58 am
This will be it for the republican party.
Way of a payback to the UAW for it’s unflagging support to the Democrats.
There were a lot of closet conservatives in motown area.
No more.
Republicans are sealing their own fate by stonewalling help to bluecollar, but pouring money on the whitecollar banker types! I will never selectively vote again. I will pull one lever only, DEMOCRAT!
November 19th, 2008 at 12:12 pm
Yes, that’s right. It’s all labor’s fault. Never mind that the workers on the line had nothing to do with management’s decision to continually manufacture a product that doesn’t sell…never mind that blue collar men and women had nothing to do with management’s failure to invest in and bring to production forward thinking, innovative R&D.
Do not allow free market extremists like Mitt Romney turn this crisis into a union busting opportunity. Remember, 23% of the nations wealth is still held by top 1%ers like Romney. Yes, the UAW has a great contract..they have a good deal, but Romney and those like him have a better one. The workers of this country deserve a fair share of the pie. The average CEO makes 300 times the average earnings of the people they empoly. THREE HUNDRED TIMES!! So that means, if the average UAW makes 27$/hour, management makes $8100 per hour.. wait a minute that can’t be right. Guess what it is.
…But the labor debate, though important, is a distraction to the debate over the bailout..
Think about it logically..
If we(the taxpayers)allow the big three to go bankrupt without assistance, we have no control in preventing the same sort of mismanagement in the future. The first thing they’ll do is bust the unions and save $2000 per car.. Romney would have you believe that they’ll use that savings to improve the gas efficiency and quality of their automobiles and invest in alternative fueling. Who’s to say that will actually happen. I thinks it’s more likely they’ll go back to business as usual…and we’ll be in the same boat a year from today. Maybe I’m wrong, but If we offer assistance, we can attach strings to make sure they do the right thing and move forward responsibly, if we let them go belly up, we have no say.
November 19th, 2008 at 12:18 pm
The airlines did fine with Bankruptcy.
No reason the losers of the Big 3 can’t do the same…
November 19th, 2008 at 12:48 pm
Romney makes sense. I agree with him.
Unions are still relevant, but GM’s worker pay outmaxes that of workers of the more competitive (read, “usually foreign”) automakers.
I’m glad, mostly, that Romney included management in that observation. Because here’s the deal:
Overpaid union workers will most likely spend their money and keep the economy chugging. Overpaid (by FAR, compared to the foreign automakers’) management is more likely to sock away their money.
The entire industry needs an overhaul, however. My husband and I are still fuming over “Who Killed the Electric Car.” (Answer: Oil and GM, in addition to other automakers).
November 19th, 2008 at 12:58 pm
I think Romney makes sense, but I think it needs to apply to AIG and whatnot as well.
I’m really not all that keen on what’s been happening with the bailout money. AIG execs don’t give a crap about the company, as long as they can maintain their lifestyle, which they will.
November 19th, 2008 at 1:38 pm
“The federal government should provide guarantees…and assure car buyers that their warranties are not at risk.”
But senior citizens get their retirement benefits slashed. And the working man gets it in the neck once again.
The reason the big three automakers are going the way of the dinosaur is they built garbage. People got so used to Detroit products falling apart that they may as well have been programed to think that once you’ve owned a car for three years it’s ready for the wrecking yard.
Then Toyota came on the scene and people discovered that if you change the engine oil on a Toyo the damn thing’ll run forever.
I drove one for 17 years. It never needed a major engine job and not once did it come close to failing the state emissions test.
November 19th, 2008 at 2:26 pm
The CEO’s of the big 3 flew to DC in Corp. private jets to beg for money. If they get a hand out I’m with many who feel there should be strings attached, like CEO pay be limited to $400K /yr. just like the President of the USA. No plants outside the US, etc. I’m sure that we could add many more restrictions and belt-tighting measures that tax payers would agree to.
These big shots drove the industry into the ground, so how good can the be? Let’m all take a hike.
Whew, I feel a little better now.
November 19th, 2008 at 2:35 pm
Remember how we were told what a genius Romney was on the economy. Yeah right. He holds the straight down the line Republican view that the auto workers don’t matter and the bailout money is the birthright of privileged AIG execs to squander on “golfing spa weekends”. I wonder how much of the money for these high flying welfare CEOs ended up in the hands of escort services.
The Republicans only have a few weeks left but they are stabbing their enemies – the American people – in the back as they leave office disgracefully.
November 19th, 2008 at 3:19 pm
Jim from Jersey, I totally agree. Here’s another thing Romney said in his op-ed piece, which speaks to the way almost ALL American businesses seem to be run:
“Investments must be made for the future. No more focus on quarterly earnings or the kind of short-term stock appreciation that means quick riches for executives with options. Manage with an eye on cash flow, balance sheets and long-term appreciation. Invest in truly competitive products and innovative technologies — especially fuel-saving designs — that may not arrive for years. Starving research and development is like eating the seed corn.”
It’s an unfortunate source for a lesson, admittedly, but I remember reading an article quoting a terrorist, post-9/11, who said something like, “We will win: The Americans think only in terms of days and years, but we think in terms of decades and centuries.” Chilling. Because he was correct.
IBM became what it did because it didn’t have a 1-, 5-, or 10-year plan, it had a 40-year plan.
November 19th, 2008 at 4:03 pm
Ya know….Mitt couldn’t buy a primary win…..so, about your investment judgment, there Mitt?
His mouth is bigger than his circle of support.
November 19th, 2008 at 5:19 pm
Mitt’s thesis to save Detroit is to first throw the Detroit retirees over the side of the lifeboat and let the sharks have them for supper.
Compassionate conservatism. I suspect Mitt wouldn’t have treated his own parents that way though. Once people get wise, I hope this finally drives a wooden stake through the “heart” of the Republican Party.
Yes, conservatives are coming out of the woodwork supporting the bankruptcy of Detroit. The mother of all union busting opportunities has been presented to them on a silver plate and time is short to git-r-dun.
I tried to find this the other night but I couldn’t find it all in one place. CNBC came through today though.
Which Senators Have Auto Plants in Their Districts?
Alabama – Jeff Sessions (R), Richard C. Shelby (R)
- Montgomery – Hyundai
- Tuscaloosa – Mercedes Benz
- Lincoln – Honda
- Huntsville – Toyota
Delaware – Joe Biden (D) Thomas Carper (D)
- Wilmington – GM
Georgia – Saxby Chambliss (R), Johnny Isakson (R)
- Doraville – GM
Illinois – Richard Durbin (D)
- Chicago – Ford, Lincoln, Mercury
- Belvedere – Chrysler
Indiana – Evan Bayh (D), Richard Lugar (R)
- Roanoke – Chevy/GMC
- Indianapolis – GM, powertrain, metal
- Bedford – GM, powertrain
- Marion – GM, metal
- Princeton – Toyota
Kansas – Sam Brownback (R), Pat Roberts (R)
- Fairfax – GM
Kentucky – Jim Bunning (R), Mitch McConnell (R)
- Louisville – Ford Mercury
- Bowling Green – Chevy/Cadillac
- Georgetown – Toyota
Louisiana – Mary Landrieu (D), David Vitter (R)
- Shreveport – GM
Maryland – Benjamin Cardin (D), Barbara Mikulski (D)
- White Marsh – GM, powertrain
Michigan – Carl Levin (D), Debbie Stabenow (D)
- Sterling Heights – Ford, axels
- Woodhaven – Ford
- Dearborn – Ford
- Wayne – Ford
- Romeo – Ford, engine
- Detroit – Buick/Cadillac
- Flint – GM
- Bay City – GM, engine parts
- Livonia – GM, powertrain
- Pontiac- Chevy/GMC
- Orion – Pontiac
- Lansing – Cadillac, GMC/Saturn
- Warren – Chrysler
Minnesota – Norm Coleman (R), Amy Klobuchar (D)
- St. Paul – Ford, Mazda
Mississippi – Thad Cochran (R), Roger Wicker (R)
- Blue Spring – Toyota (opens 2010)
- Canton – Nissan
Missouri – Christopher Bond (R), Claire McCaskill (D)
- Kansas City, – Ford, Mazda, Mercury
- Wentzville – GM
- Fenton – Chrysler
Nevada – John Ensign (R), Harry Reid (D)
- Las Vegas – Shelby
New York – Hillary Clinton (D), Charles Schumer (D)
- Massena – GM, powertrain
- Tonawanda – GM, powertrain
Ohio – Sherrod Brown (D), George Voinovich (R)
- Brook Park – Ford, engines
- Avon Lake – Ford
- Marysville – Honda
- Toledo – GM Powertrain
- Lordstown – Chevy/Pontiac
- Mansfield – GM metal
- Moraine – GM
- Parma – GM metal
- Anna – Honda, engines
- East Liberty – Honda
- Russells Point – Honda, transmissions
- Twinsburg – Chrylser
Pennsylvania – Robert Casey (D), Arlen Specter (R)
- Pittsburgh – GM metal
South Carolina – Jim DeMint (R), Graham Lindsey (R)
- Spartanburg – BMW
Tennessee – Lamar Alexander (R), Bob Corker (R)
- Smyrna – Nissan
- Spring Hill – Saturn
- Decherd – Nissan
Texas – John Cornyn (R), Kay Bailey Hutchinson (R)
- Arlington – GM
- San Antonio – Toyota
Virginia – John Warner (R), Jim Webb (D)
- Fredericksburg – GM, powertrain
Wisconsin – Russell Feingold (D), Herb Kohl (D)
- Janesville – GM
- Kenosha – Chrysler
Shelby of Alabama is one of the more vocal boosters of letting Detroit swing from a tree. It should now be clear what his motives are.
November 19th, 2008 at 6:21 pm
This is also where the GOP has lost me. They are not willing to support the $25 billion bailout of the three Auto makers. Just let them go bankrupt and 3 million workers lose their jobs. The 25 billion comes right out of the 700 billion dollars that Congress voted for over a month ago. Shelby just makes me sick. Hyundai has an auto plant located outside Birmingham, AL. If Hyundai was threaten to go bankrupt, Shelby would be the one begging the government to bail them out to save jobs in AL! GOP wants to let the auto industry go, because these guys all drive Mercedes anyway. That is un-American!
November 19th, 2008 at 7:06 pm
Ask ROMNEY about AMERICAN MOTORS now? Chrysler took over it. Anonymouse! you are so right. Bust the unions up and the south is anti union. Check my post reguarding that nutty pastor from yesterday. Check out Wikipedia on AMERICAN MOTORS. I lived in LEXINGTON,KY and check out Kentucky.com. that is web page for the HERALD LEADER. In tuesdays paper,it stated in a article on the front page,KY. could have a lost of 50,000 jobs. On page 4 in the same paper was another article saying hunger has risen in this country and where the map show was the states that went with McCAIN hunger has increased. I am quite sure alot of states will have a loss of jobs if big 3 does not get help. My view is,if the big 3 goes bankrupt,this country will too. Right wing radio is pied piper for the states McCAIN won that hunger has went up that has alot of right wing buffoons like that guy from IDAHO and that buffoon mid-western pastor. Seems to me walfare will go up and overseas cars will hit the market and the end of unions. As REAGAN NUTS SAY,TRICKLE DOWN,but this will be trickle down doom.
November 19th, 2008 at 7:25 pm
[...] Should taxpayer dollars go to bail out the “big three” automakers? Or should Congress let Detroit go bankrupt? We’ll debate [...]
November 19th, 2008 at 8:00 pm
Dan, What are you smoking? Did you watch any of the hearings today? Democrats and Republicans alike are tiffed to say the least that these big whigs got off their chartered jet with a tin cup in hand begging for money so they can go back, continue with their broken business plan, only to beg for more money later.
This isn’t a party issue. Let them go bankrupt, restructure under a judge’s order, and quit bowing to the unions who demand too much. It’s broken, it needs to be fixed, and the answer is not throwing money at them.
November 19th, 2008 at 9:05 pm
Alan may have a good point or two but his presentation is child like – perhaps like a 15 year old. Alan runs over guest callers rather than answer their questions. What a PUTZ!
When I listen to Hanity & Comes I am amazyed at Alan’s childish gestures and comments. Make a honest comment Alan and forget trying to play GOT-YA! That’s a dangerous game especially when there are so many clear mistakes Alan makes. Alan, defend the denfendable and cut the crap!
November 19th, 2008 at 10:21 pm
So much for “Mr. Economy”. The way I see it, there is really no choice but to bail them out. It sickens me for them to get away with the crap they did ~ but I think the consequences of not doing it far out way the message that it sends.
November 19th, 2008 at 10:55 pm
http://howobamagotelected.com/
Here you go Left Wingers. Here is just a small sample of the ignorant, blind following that Obama has. I swear, it is like a bunch of zombies chanting…”Obama, Obama”. I also love this “change” we are going to experience. Our new president is appointing a bunch of has been Clintonites. Some change. Next time, make an educated vote instead of voting based on “change” and the color of the man’s skin.
November 19th, 2008 at 11:49 pm
A bit off topic there Jeff. It’s OK, I know some fear mongering conservatives like yourself have trouble reading.
Now to the issue at hand.
I actually agree with Romney on this.
Here’s the thing, we bail out AIG and they took the money and ran essentially. The company is still in trouble, and we’re billions of dollars poorer for the effort.
Regulate these loans, all around. Heavily. Money must be used for a specific purpose. Any CEO found abusing monies given for a specific reason goes to jail for grand theft and embezzling. Lets not muck about with them like we’re doing now.
The loss of jobs is unfortunate – but the good news is, IF the Big-3 start to tank, other car companies will rise to fill in the gaps, and those companies are going to have a large market to work with, and that will require skilled workers, preferably ones with experience. They will find employment again, especially the welders and designers.
November 20th, 2008 at 12:05 am
This isn’t a political party decision voting down party lines. It isn’t about who’s to blame UAW or management its about american jobs doesn’t matter if your are Rep. or Dem its the jobs. Every time someone loses their job they are no longer contributing to society that are taking away. Everyone knows what the problems are and instead of playing the blame game come up with solutions. My concern is for the guy or gal working the line or the people in the background helping out the line.
November 20th, 2008 at 1:04 am
So how about a NEW bailout. We take the standard mean wage of all employees, set aside a trust for 3 months worth of those wages, allow the company to reorg through bankruptcy or crumble. Anyone kept through a reorg – nothing happens, business as usual. Anyone laid off or in a crumbled company has 3 months of wages to work on until a new company comes along to take the place of the former car manufacturer, or to bide time until they can find another job.
We already have this idea though, it’s called unemployment. I’m not one to say this lightly, but let’s not blame Bush government for this, let’s call a banana a banana. The car companies REFUSED to update sufficiently to keep competitive and squashed innovation, and it’s time they pay the price. Let’s do te ‘trickle down’ thing with them. Start taking the funds from the CEOs and board members until the debts and creditors are paid off.
November 20th, 2008 at 1:45 am
Alright folks, this message was brought to you by Mitt Romney who made his fortune in leveraged buyout through private security fund — grabbing companies (failed or otherwise) on borrowed money, take them apart, restructured them, which means high layoff and some aggressive nasty corporate take over, then sell them with enormous profit going straight to his pocket while the targeted business and its human capital decimated into shred. Now Mr. Romney is having his eyes on the auto industry for some huge profit by viciously tearing it apart and augment a good hundreds of millions of dollars to his $500+ million wealth. Every single person who says something has an agenda.
November 20th, 2008 at 10:15 am
ELUV,tell that to T.MASON. MITT BUSTED UP AMERICAN MOTORS. He is anti union as well. I haved said in various post. Look where most of the foreign auto makers are at? Mainly in regions where McCAIN won at. It,s a ploy to take over the auto business. Drive down wages and bust up unions. THE GOP has not been a leader when it comes to fair trade. It,s not the big 3,s management. It,s big oil,bad trade deal and not going green in AMERICAN AUTO MARKET. Millions of jobs will be lost if they don,t get a bailout and be froced to re-tool. Else we buy most of the foreign auto and make it AMERICAN. That will not happen. It,s a slap in the face of AMERICAN WORKERS BY THE GOP.
November 20th, 2008 at 10:59 am
The problem isn’t about MITT Romney, although you are trying to make the failure everyone’s fault except the parties who are responsible (the management at the auto companies and the unions). He is a politician who expressed his opinion.
This issue isn’t about party lines. The government is here to serve everyone, republican and democrat and to do the will of the people. A majority of Americans are saying NO to this, just as they said no to the first bail out.
You don’t put a tourniquet on a dead man. Throwing money at companies with a broken business plan who continue to refuse to change on their own is not smart business and it does not serve the common good of the majority. Let them go bankrupt just as any other company would have to do.
November 20th, 2008 at 11:05 am
I agree with Jim from Jersey’s approach. Instead of a bail-out, support a restructuring of the system. Have the federal gov’t DEMAND a full accounting of how the automakers will revamp before giving them a dime, and in the meantime, the union workers, assumingly, have unemployment to fall back on (cold comfort, to be sure).
One of the few things I don’t agree with Romney on, is how he says GOV’T should invest more in research and development for the automakers.
This is a queer proposition from a capitalist, and it does NOTHING to hold the companies accountable for maintaining their competitive edge on their own.
We gave the crackheads on Wall Street what we thought would be a year’s supply, and they smoked it all in no-time-flat.
Bummer for the car companies, but they arrived too late to the firesale on our tax money. But then, that seems to be the basic foundation of their current operation: Ponderous, uncreative, dumb and greedy.
November 20th, 2008 at 1:22 pm
Romney is a joke and he has no future in the GOP just like Sarah Palin.Those two will not be rehabilitated by all the effort of Foxy News network.
November 20th, 2008 at 1:25 pm