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Romney: Let Detroit Go Bust

Bankruptcy, not bailout, will save the American motor industry

By Jason Farago,  Newser Staff

Posted Nov 19, 2008 7:26 AM CST
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(Newser) – If you want to maintain an automotive industry in the US, writes Mitt Romney, giving the Big Three a bailout is the last thing you should do. In an op-ed for the New York Times, the former Massachusetts governor (and Michigan native) says that GM, Chrysler, and Ford need a managed bankruptcy followed by radical restructuring. A bailout will only encourage the industry's worst excesses, and in a few years "you can kiss the American automotive industry goodbye."

Detroit needs big changes, writes Romney, whose father ran American Motors before becoming Michigan governor. To survive, the industry needs to get its costs to Japanese and European levels; management needs to be booted, replaced by smarter executives from unrelated industries; and investment in cleaner, cheaper technologies needs to start now. As for the shareholders who'll lose out in bankruptcy proceedings, don't pity them too much: "They bet on management and they lost."

Protestor Medea Benjamin, left, is escorted out by a police officer as she waves a banner during a hearing on the automotive industry bailout on Capitol Hill in Washington, Tuesday, Nov. 18, 2008.
Protestor Medea Benjamin, left, is escorted out by a police officer as she waves a banner during a hearing on the automotive industry bailout on Capitol Hill in Washington, Tuesday, Nov. 18, 2008.   (AP Photo/Manuel Balce Ceneta)
Ford assemblymen mesh the engine to the drive shaft on the 2009 Ford F150 truck at the Dearborn Truck Assembly in Dearborn, Mich., Thursday, Oct. 30, 2008.
Ford assemblymen mesh the engine to the drive shaft on the 2009 Ford F150 truck at the Dearborn Truck Assembly in Dearborn, Mich., Thursday, Oct. 30, 2008.   (AP Photo/Carlos Osorio)
In this Sept. 12, 2008 file photo, Yolanda Germany checks the door molding on Chrysler's new 2009 Dodge Ram pickup being assembled at the Warren Truck Plant in Warren, Mich., Friday, Sept. 12, 2008.
In this Sept. 12, 2008 file photo, Yolanda Germany checks the door molding on Chrysler's new 2009 Dodge Ram pickup being assembled at the Warren Truck Plant in Warren, Mich., Friday, Sept. 12, 2008.   (AP Photo/Carlos Osorio, file)
Chrysler and Dodge vehicles are lined up at a Chrysler dealership in Portland, Ore.
Chrysler and Dodge vehicles are lined up at a Chrysler dealership in Portland, Ore.   (AP Photo/Rick Bowmer, file)
GM CEO Rick Wagoner, from right, Chrysler CEO Robert Nardelli, and Ford CEO Alan Mulally, testify at a Senate hearing on the auto industry bailout on Capitol Hill, Tuesday, Nov. 18, 2008.
GM CEO Rick Wagoner, from right, Chrysler CEO Robert Nardelli, and Ford CEO Alan Mulally, testify at a Senate hearing on the auto industry bailout on Capitol Hill, Tuesday, Nov. 18, 2008.   (AP Photo/Manuel Balce Ceneta)
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COMMENTS
Showing 3 of 3 comments
Guest
Nov 22, 2008 2:18 AM CST
Peagravel ,I agree with you.
Guest
Nov 18, 2008 11:13 PM CST
The Auto Company’s CEO’s have been overpaying themselves millions of dollars for years. In addition to their high salaries they have also deemed themselves worthy of multi-millions in bonuses and benefits. (A good deal of this money was derived by lowering employee benefits) They have given themselves all this for running the companies into the ground by developing the wrong (low quality) vehicles. So they figure the best thing to do now is blame it on the unions and request bail out money. They will then give themselves additional bonuses for pulling off obtaining the bailout monies.
Guest
Nov 18, 2008 7:43 PM CST
I just resent a bailout due to the United States people will still be feeding the unions. When people in the South do simular work for not much over minimum wage and all these years have been expected to pay for cars being produced by people making 7 to 8 times they earn and now we are told we have to bail them out. Something doesn't make sense. Management at every level is lost in this country and I don't think there is a fix. Nancy Kitchin
Money • US

 
Mitt Romney • Chrysler • bankruptcy • General Motors • Detroit • Ford • auto industry • bailout

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