It's a winning message...for President ObamaIt's not just Mitt Romney that would have crashed the economy by letting Chrysler and GM fail. Rick Santorum would have, too:
Making his Michigan campaign debut in the home of the auto industry, Republican presidential candidate Rick Santorum said Thursday he would not have supported the government bailout of General Motors and Chrysler.Better? Better than this?
"If we had just stayed out of it completely and let the market work, I believe that the market would have worked," Santorum said in an address to the Detroit Economic Club. "Would the auto industry look different than it does today? Yes it would be. Would it still be alive and well? I think it would be alive and equally as well, if not better."
Just two years after it was rescued and reconstituted through bankruptcy and a government bailout, General Motors Co. cruised through 2011 to post the biggest profit in its history.Or better than this?
The 103-year-old company, leaner and smarter under new management, cut costs by taking advantage of its size around the globe. And its new products boosted sales so much that it has reclaimed the title of world's biggest automaker from Toyota. [...]
But the company's performance in North America and Asia still helped it earn $7.6 billion for the year, beating the record of $6.7 billion set during the truck boom in 1997.
Detroit's Big 3 all turn profits in 2010, pulling out of long skid
US automakers General Motors, Ford Motor Co., and Chrysler LLC each reported a profitable 2010 Tuesday, with combined unit sales of cars and light trucks topping 5.6 million, a 19 percent increase from the previous year.
The results are expected to help push the automotive industry – domestic and foreign manufacturers selling in the US – to its first profitable year since 2005.
Better than that? Really? Damn, Rick Santorum must be a wizard! Especially since there were no banks willing to lend to GM and Chrysler during the time in question.
[Romney:] "The president tells us that without his intervention things in Detroit would be worse. I believe that without his intervention things there would be better."Let's face it, it's not just Mitt Romney. The entire Republican party was ready to crush the unions and letting GM and Chrysler go down (and taking Ford and the entire vehicle manufacturing supply chain with them) was a fantastic way to do that.
The crux of Romney's argument: If Obama had not acted, private companies would have stepped in and run a "managed bankruptcy." What this ignores is that in the fall of 2008, before Obama was even sworn in, no one on Wall Street or anywhere else was willing to lend GM and Chrysler a penny — let alone the $81 billion they and their financial arms eventually needed.
Both companies' bankruptcies required money on a scale not seen in legal history. Unlike airlines, which can keep running with much smaller short-term loans while they restructure, automakers need massive amounts of up-front capital to pay suppliers and workers while they build cars; their finance companies need even more to keep making car loans that can bring in revenues. The potential damage wasn't just layoffs; Chrysler executives testified on the first day of bankruptcy that without immediate cash the company risked destroying hundreds of millions of dollars' worth of equipment.
Even after Obama took office, GM and Chrysler searched frantically for paths to avoid bankruptcy, including a possible merger. Chrysler held a one-week garage sale of its assets in February 2009, inviting anyone with enough money to bid for parts of the company. No one bit.
Meanwhile, with Michigan's Republican primary looming, Michigan Republicans have the choice between two men that would have foresaken two of our largest manufacturers and employers. And they are demonstrating an astonishing level of incompetence when it comes to financial matters.
President Obama, on the other is cashing in. Literally. He raised $29 million in January alone, 98% of which was from donations of $250 or less. In fact, he outraised his GOP opponents in two-thirds of the states.
But, hey, Mitt & Rick, stick with this message. It's music to my ears.
Cross-posted from Eclectablog.