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Will the real Mitt stand up?



Published: Sun, June 24, 2012 @ 12:00 a.m.

By Bertram de Souza (Contact)


The disturbing aspect of Mitt Romney’s take on the American auto industry is not his brazenness in claiming credit for the miraculous recovery of General Motors and Chrysler — that’s politics, folks — but his lack of faith in arguably the single-most important contributor to this nation’s economic well-being.

And it is this lack of faith, as opposed to his infamous “Let Detroit Go Bankrupt” opinion piece in 2009 in the New York Times, that should prompt auto communities such as the Mahoning Valley to take a questioning look at the presumptive Republican presidential nominee.

The Valley has lived through the good times and the bad of the American auto industry, but through it all most of us have never doubted the commitment of management and labor to the Made in the USA brand.

Not so, Mitt Romney, former governor of Massachusetts and son of the late George Romney, who served as president of the now defunct American Motors and as governor of Michigan.

Managed bankruptcy

When the GOP challenger to President Barack Obama campaigns in America’s auto communities, he makes it a point to claim “a lot of credit” for the recent successes of GM and Chrysler. Indeed, he contends that Democrat Obama followed his lead when he ushered the companies through a managed bankruptcy soon after taking office.

“I pushed the idea of a managed bankruptcy, and finally when that was done, and help was given, the companies got back on their feet,” the Associated Press quoted Romney as telling a Cleveland television station. “So, I’ll take a lot of credit for the fact that this industry has come back.”

But while Romney’s 2009 opinion piece in the Times has attracted attention because he came out against a federal government bailout of the automakers, what hasn’t grabbed the spotlight was his view of the Big Three.

Here are the key paragraphs of his article:

“If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.

“Without that bailout, Detroit will need to drastically restructure itself. With it, the automaker will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technological atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.”

That negative view stands in sharp contrast to President Obama’s attitude about the industry as he pushed for the federal bailout of GM and Chrysler. Ford ultimately decided against taking the federal money.

Romney was dead wrong about the Big Three in 2009; what he wrote certainly did not reflect reality.

Reality in the Valley

Had Romney come to the Mahoning Valley three years ago and visited GM’s Lordstown assembly complex, he would not have used the words “technological atrophy” and “product inferiority.” And, he certainly wouldn’t have found “insurmountable labor and retiree burdens.” To be sure, labor costs were a problem, but to suggest that nothing was being done about them is either to be ignorant about the steps taken in national and local labor contracts, or to turn a blind eye to the changes just to make a political point.

Had Romney come to the Valley in 2009, he could have met with former Republican governors Bob Taft and George V. Voinovich, who were effusive in their praise of labor and management at the Lordstown plant.

The successes of the Chevrolet Cavalier, Cobalt and now the Cruze — all Lordstown products — is the story of the new and improved American automobile industry.

Romney was also wrong in believing that without the federal bailout the automakers would have been able to secure money from the private sector to help them emerge from bankruptcy.

As Dr. David Cole, a nationally recognized expert on the auto industry, put it: “The auto companies would not have made it without government bailout. It was the creditor of last resort.”

So, while the GOP presidential contender portrays himself as the architect of the turnaround, his contention that the “demise” of GM and Chrysler is “virtually guaranteed” because they were bailed out to the tune of $24.9 billion goes to the heart of his credibility on this issue.


Comments

1paulparks(235 comments)posted 2 years ago

What about the massive recall?

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2CompMan(125 comments)posted 2 years ago

The valley in particular is very happy to have Lordstown open and contribute to the economic growth of families and spin off businesses. However, this story is not complete until the US taxpayers are paid back in full. Unfortunately since the IPO price of $35 and todays price under $21 this does not look feasible. Both political parties are at fault for not ensuring GM's debt was not not treated as foreign aid as it currently has turned into. And we can not even levy US tax on the profits made outside of the US. A phrrhic victory for taxpayers.

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3chuck_carney(499 comments)posted 2 years ago

"So what if GM has employees worldwide? What about GE, with its tax free $24billion profits?
"

Let's not just buy US, let employ US.

If 1/4 the GM jobs created overseas were in the manufacturing midwest, including Ohio, we would be in heaven. Even the UAW would be ecstatic.

As to GE, Jeff Immelt is Obama's buddy, and will get preferntial tax treatment during his presidency. Amazing how campaign contributions keep huge GE profits from getting noticed, while Exxon-mobil get villified daily.

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4HAM711(16 comments)posted 2 years ago

THINKER, YOU ARE A JOKE, WHO MOST PROBABLY ARE WAY OUT OF TOUCH WITH THE REALITY. NO MATTER WHAT YOU SAY ABOUT THE BAILOUT, IT HELPED THE USA WITH CONTINUING JOBS, AND IT HELPED THE VALLEY. WHICH YOU MUST NOT CARE ABOUT, AND ANYTHING THAT HELPS THE VALLEY. ITS SAD, BUT PEOPLE LIKE YOU ARE WHATS WRONG WITH THE VALLEY AND THE REASON ITS HARD TO BRING IN NEW BUSINESSES AND JOBS. YOU SHOULD BE CALLED NEGITIVE NOT THINKER!

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5Silence_Dogood(1311 comments)posted 2 years ago

"GM is owned essentially by the US government, the Canadian national government, the government of the Canadian Province of Ontario and the union elements."

Don't forget the Chinese.
Among the banks helping General Motors with its initial public stock offering are two identified by initials only: ICBC and CICC.

Americans uncomfortable with U.S. government ownership of General Motors might want to hear more: One of those banks is the Industrial and Commercial Bank of China, one of China's four big central government banks. The other, China International Capital Corp., is a joint venture run primarily by Central Huijin Investment Ltd., an arm of the state, and Morgan Stanley.

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6300(553 comments)posted 2 years ago

It's called national security. At times this must trump free-market economics. The automobile industry is vital to America not only for the direct/indirect jobs it provides, but in case of any major military operation these companies can be called on to support the machine requirements.

If they had gone through a bankruptcy they would've emerged as shells of their former selves. The idea that through creative destruction everything would be made whole is foolish.

Romney cares about his fortunes, not the country's. His entire election campaign is about his narcissistic desire of power. That's why he's able to say what he does. The government is to look out for the American society, which it did fairly well in this case. The government's case isn't to worry about "who's going to invest". The government needed to worry that it might have ended up losing a vital piece of its national security (the same idea that pertains to the aerospace, and to an extent, the IT sectors.

Thethinker, just out of curiosity, were you Business Administration or Econ?

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7thinkthentalk(258 comments)posted 2 years ago

Crybabys cry just for the sake of crying. Or maybe a full diaper. Does somebody need changed?
I keep seeing these negative GM comments as i linger, but i never see an answer to the question, would you rather have Lordstown closed?

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8thinkthentalk(258 comments)posted 2 years ago

Look, if you are a GM shareholder, and you have a problem with how GM is run, whether its this chinese nonsense or paying off the loan. You have a beef with GM management. The GM CEO, not Obama. Direct your displeasure at the GM management. Tell THEM you want the loan paid off and not build plants in china.

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9isaac45(261 comments)posted 2 years ago

mitt never stands up, that's his calling card....even rupert murdoch called him out on it this weekend

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10doubled(210 comments)posted 2 years ago

paulpars -- you're a miserable fool and exactly the type of person that ruins our community...."how about the massive recall" --- I bet you're just as happy as can be about that one, arent you? Leave -- we don't need you.

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