Let's start with Romney's big prediction. After all, he's running on his business acumen. Let's see how strong it is.
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.Well, guess what? The auto industry got that rescue, and then some. And not only are we not saying "goodbye" to the American automotive industry, the US auto-maker GM is once again on track to become the world's largest auto-maker in sales numbers, and other US auto-makers also compete globally with increasing success.
What is it Romney said about the US auto industry's course with the "bailout?"
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.Ah yes, restructuring. Detroit did do that, under Barack Obama's uncompromising leadership and the administration's impressive management abilities. Let's go back to March of 2009, when President Obama used the leverage of taxpayer investment to fire GM's CEO and demand that GM change its ways to become more competitive - that it dump its gas guzzlers, lethargic business model and concentrate on becoming a global competitive power house.
In this context, my administration will offer General Motors adequate working capital over the next 60 days. And during this time, my team will be working closely with GM to produce a better business plan. They must ask themselves: Have they consolidated enough unprofitable brands? Have they cleaned up their balance sheets, or are they still saddled with so much debt that they can't make future investments? Above all, have they created a credible model for how not only to survive, but to succeed in this competitive global market?Given that GM is poised to take over the lead as the world's largest automaker for the first time since the Great Recession, I think we can safely say that the President's leadership and the administration's tireless hard work paid off. Mitt Romney's contention was that in order to restructure Detroit and make the American auto industry competitive again, you must let it go bankrupt so its creditors can sell off its pieces. Sort of like burning down a village to "save" it. But hey, what do you expect from Bain Romney?
Let me be clear: The United States government has no interest in running GM. We have no intention of running GM. What we are interested in is giving GM an opportunity to finally make those much-needed changes that will let them emerge from this crisis a stronger and more competitive company.
Not only does Romney has egg on his face on his overall position on the auto industry, every last one of his points were repudiated by reality. Declining market share? Last year, every American auto maker gained global market share.
What was the real problem Mitt Romney and Republicans had with the auto industry rescue, though? That, I submit, had nothing whatsoever to do with a company's "restructuring" through bankruptcy (granted, Romney knows about bankrupting companies). The real problem was described in the following paragraph:
First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.[...]This is exactly what Mitt Romney, as well as the Republican party leadership in general, thinks of workers' ability to bargain collectively for decent wages and benefits - they are getting more and more pay for less and less work. More succinctly, that working people, when given the chance to bargain collectively for a decent standard of living, become lazy.
...as Walter Reuther, the former head of the United Automobile Workers, said to my father, “Getting more and more pay for less and less work is a dead-end street.”
Mitt Romney and his pals on the right wing economic cabal saw the collapse of the American auto industry as an opportunity to break up unions by forcing the companies into bankruptcy. Despite all the crocodile tears the GOP candidates are now shedding crying about jobs, the loss of a million American jobs would have been welcome in their ranks should it have meant the demise of the United Auto Workers.
To be sure, the auto workers did make concessions - much of it willingly - help Detroit survive. What the GOP wanted was the union contracts to be stricken out altogether by a bankruptcy judge in order to cover liability to creditors. That did not happen. One million American auto-worker jobs were saved, and so was the American auto industry. Not only was it saved, it produced an amazing turnaround, outpacing and outcompeting auto makers from Asia and Europe. A moribund American industry was turned around not by trickle down voo doo economics but by the help of the taxpayers and the leadership of a progressive president.
I have no idea if Romney actually believed what he said - that letting the Detroit Three go bankrupt was the only way to turn around the industry because it would be forced by the courts. Somehow I doubt it, because Mitt Romney is not that dumb. But if he did believe it, he was clearly, demonstrably, and remarkably wrong. If he didn't, well, then he was Mitt Romney.
That's the recent history. Mitt Romney is not going to be able to run from his salivation over wanting to fire people. Nor is he going to be able to run from his demand that an American city be allowed to be devastated, an American industry allowed to go extinct and a million American jobs allowed to be eliminated in the middle of a fierce recession. You can bet the President's campaign will be reminding voters of the man born with a silver spoon in his mouth who would have loved for Detroit to go bankrupt.