It is very interesting to watch Mitt Romney’s position evolve relative to the decision to save GM and Chrylser in 2009 i.e. the auto-bailout. GM just posted the largest profit in it’s 103 year HISTORY. As in EVER. And it isn’t hyperbolic to say that had Mitt Romney (with all of his experience watching companies go bankrupt up close and personal) been in a position to allow the entire American car industry (minus Ford) to go into liquidation overnight…the subsequent effects would have been a bleeding out of millions of jobs from the car manufacturers, to the parts suppliers to the retailers; we could very well still be in a Great Depression instead of a fragile recovery. Now – Mitt Romney’s position is reduced to saying that GM would have done EVEN BETTER than an all time profit under his plan to let Detroit go bankrupt.
GM, which released its earnings Thursday, performed best in its home territory, posting a $7.2 billion pretax profit in North America. The numbers were so good that 47,500 blue-collar workers will get $7,000 profit-sharing checks, the maximum allowable under their new union contract. International Operations, which includes Asia, made $1.9 billion before taxes, but that was down from 2010.GMs cost cuts, and its outlook for this year helped to push up the stock price by almost 9 percent to $27.08.
I think the political director at NBC – Chuck Todd – said it best today:
“The only worse timing for Romney regarding GM’s record profits announcement would be if it were the day before the MI primary.”
Back in Michigan, Romney is launching an expensive advertising campaign to counter any bad feelings about his previous bailout stance. Sharply critical of Obama’s $85 billion bailout plan, Romney insisted that the federal government should have let the private sector handle the crisis in the auto industry.
On November 19th, 2008 – Mitt Romney wrote an op-ed in the NY Times titled “Let Detroit Go Bankrupt”. In that op-ed – Romney wrote:
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.
He couldn’t have been any more specific. If the bailout passes – the American automotive industry’s “demise will be virtually guaranteed”. Upon hearing that GM has now posted the largest profits in it’s history…when he made a conscious decision not to stand with American workers in the largest manufacturing business America has left….what does Mitt Romney say?
“I would have never allowed the auto industry to disappear,” Romney told the <Detroit News Editorial Board>.
Later, speaking to a few hundred people at a Chamber of Commerce luncheon, Romney said he was “delighted” that the industry was once again profitable.
“I love American cars, and long may they rule the world, let me tell you,” he said. “I want them to do well.”
And even the Economist had a change of heart regarding the auto bailout…and holds a mild scathing for Mr. Romney:
Free-marketeers that we are, The Economist agreed with Mr Romney at the time. But we later apologised for that position. “Had the government not stepped in, GM might have restructured under normal bankruptcy procedures, without putting public money at risk”, we said. But “given the panic that gripped private purse-strings…it is more likely that GM would have been liquidated, sending a cascade of destruction through the supply chain on which its rivals, too, depended.”
Even Ford, which avoided bankruptcy, feared the industry would collapse if GM went down. At the time that seemed like a real possibility. The credit markets were bone-dry, making the privately financed bankruptcy that Mr Romney favoured improbable. He conveniently ignores this bit of history in claiming to have been right all along.
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