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POLL: Do You Cheer or Jeer Romney's New Blast at 'Bailout for the Auto Industry'?

Republican presidential candidate's tough talk comes two weeks before Michigan's Feb. 28 primary.

Political hot buttons don't get much more inflammatory in Michigan than opposing federal help for automakers. That doesn't stop Republican presidential candidate Mitt Romney from pressing his criticism of lifelines that helped General Motors and Chrysler – "crony capitalism on a grand scale," in his view. 

"Three years ago, in the midst of an economic crisis, a newly elected President Barack Obama stepped in with a bailout for the auto industry," Romney writes today in a Detroit News commentary. "All the defects in President Obama's management of the American economy are evident in what he did."

Romney, born in Detroit and raised in Bloomfield Hills as an auto executive's son, earlier shared that belief in a 2008 New York Times guest column headlined Let Detroit Go Bankrupt.

Now he restates that provocative stance exactly two weeks before Michigan Republicans vote , the first in an industrial Midwestern state.

The candidate, a former Massachusetts governor whose father George was chairman and president of American Motors from 1954-62, expresses gratitude "that Chrysler and General Motors are still in business." But he feels "that without his [Obama's] intervention things there [in Detroit] would be better."

Romney doesn't mention that the Republican Bush administration gave money to the automakers a month before Obama took office.

Romney favors a court-supervised bankruptcy reorganization as the best "way for a troubled company to restructure itself rapidly."   

Chrysler last May finished repayments, with interest, of $12.5 billion in support. The federal government has a 26.5 percent stake in GM as part of that company's $49.5 billion in assistance.

A local Democratic congressman, in a statement today, calls Romney "willfully ignorant of the facts when it comes to the auto rescue."

“The fact is that there was no source of private capital to restructure GM and Chrysler," said U.S. Rep. Gary Peters, whose district includes Chrysler headquarters in Auburn Hills. "Had President Obama not acted, GM and Chrysler would be in the rearview mirror rather than helping to lead our economic recovery."

Daryl Patrishkoff February 27, 2012 at 12:09 PM
Let us get the history straight before the talking points and spin enter the conversation. I ask you to read these posts to understand the whole story, then assess your own interpretation and let’s have an intelligent respectful fact based conversation on the question, What saved the auto industry? The auto industry was in position to fail over many years, when they got into a cash strapped situation the house of cards feel. Ford made the hard decisions early and was able to take the correct steps to avoid this dramatic failure. The auto industry has an unsustainable model of legacy costs they could not carry; the foreign auto company transplants established plants without legacy costs and ate the big 3’s lunch with major cost advantages which continue to this day. GM and Chrysler were not able to get themselves in position fast enough when they finally accepted the fact that the storm was coming. They were facing the "Cliff" and immediately needed more cash to survive; the cash was only going to keep the unsustainable monster going for months. That is when the government stepped in and gave GM and Chrysler some cash, the “bailout”. This was a temporary fix that did not address the long term problem.
Daryl Patrishkoff February 27, 2012 at 12:11 PM
I understand this is a very touchy subject here in our area; I personally have been effected by it due to my long automotive roots. I have had to make personal dramatic changes to survive just like many in our area. I would like to suggest that the automobile industry has not been saved, it has been transformed and if it returns to the old ways it will be unsustainable. I do not like Political Bankruptcy; it changed the rules to help one particular group. With this change the investors are sitting on the sidelines since they now understand that the investments they make under certain contracts can be changed with the political wind. I believe this is why investment and job hiring is low throughout our country, it is called uncertainty. Investors sit on their money if things look uncertain.
Daryl Patrishkoff February 27, 2012 at 12:11 PM
Let's look at Ford, they are the shining example of how a company can avoid disaster and thrive with hard work and tough choices with no government help. They did not get the same union contracts negotiated as GM and Chrysler because they were in better financial position. To this day they have a disadvantage to GM and Chrysler, but they still thrive. GM went through an IPO with much fanfare and priced to ensure the government was to get their full investment back. Well that has not developed yet and even in these boom times the stock is not rising anywhere near the levels to get our investment back. GM is now liquidating assets in the holding company and you can see evidence in the many dealers that now sit empty and the assembly plant in Pontiac now being taken down. These same events happen in both normal and political bankruptcy. Chrysler is now in position to be owned by Fiat, a foreign automobile company. When Fiat makes the final payment they will own over 50% control of the company then becoming a foreign car company. When that fact happens we will no longer have the Big 3 we have been so proud of over the years, we will be the Big 2. Is this saving the auto industry, or giving it away?
Daryl Patrishkoff February 27, 2012 at 12:12 PM
Then a new president entered the picture and he decided to not let GM and Chrysler go under "court bankruptcy" because he said he was going to save the auto industry. His actions after that were to take it under "political bankruptcy" which means he protected a certain group from the normal effects of bankruptcy. GM and Chrysler did go bankrupt and many suppliers also went under and tens of thousands of people lost their jobs. To say they did not go bankrupt is disingenuous. The debate is was political bankruptcy a better path than court bankruptcy. The government then broke contract law, this is the contract that Secured Bondholders had that protect their investment, they paid extra for this status and the president took it away in one swipe. He said he was taking money away from the "Fat Cats" and giving it to the hard working middle class the "Union", these are the president’s words, not mine. Now these "Fat Cats" turned out to be police, fire and school teacher pensions and normal middle class people who lost everything. I know many of these people; they are not what was portrayed. Here is what happened under political bankruptcy. GM and Chrysler closed many plants and tens and thousands of people lost their jobs. They moved all of the bad operations into a holding company for liquidation and many auto suppliers went out of business with many more job losses. This is the same as normal bankruptcy, except for the group getting special treatment.
Erin May 08, 2012 at 12:47 PM
OK, so now the bailout was good, and it's all thanks to Romney?? Sorry, you can't have it both ways. "Mitt Romney taking credit for Auto Industry Success" http://www.theoaklandpress.com/articles/2012/05/08/news/politics/doc4fa8a7151032b098894230.txt?viewmode=2

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