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View Full Version : Romney op-ed: Taxpayers should get GM shares' proceeds



Arroyo_Doble
02-14-2012, 11:06 AM
Romney op-ed: Taxpayers should get GM shares' proceeds (http://www.detroitnews.com/article/20120214/OPINION01/202140336/Romney-op-ed--Taxpayers-should-get-GM-shares%E2%80%99-proceeds)

http://cmsimg.detnews.com/apps/pbcsi.dll/bilde?Site=C3&Date=20120214&Category=OPINION01&ArtNo=202140336&Ref=AR&MaxW=640&Border=0&Romney-op-ed-Taxpayers-should-get-GM-shares-proceeds


I am a son of Detroit. I was born in Harper Hospital and lived in the city until my family moved to Oakland County.

I grew up drinking Vernors and watching ballgames at Michigan & Trumbull. Cars got in my bones early. And not just any cars, American cars.

When the president of American Motors died suddenly in 1954, my dad, George Romney, was asked to take his place. I was 7 and got my love of cars and chrome and fins and roaring motors from him. I grew up around the industry and watched it flourish. Years later, I watched with sadness as it floundered.

Three years ago, in the midst of an economic crisis, a newly elected President Barack Obama stepped in with a bailout for the auto industry. The indisputable good news is that Chrysler and General Motors are still in business. The equally indisputable bad news is that all the defects in President Obama's management of the American economy are evident in what he did.

Instead of doing the right thing and standing up to union bosses,Obama rewarded them.

DumbAss Tanker
02-14-2012, 04:04 PM
Kind of an awkward time for him to take that tack, with Michigan's primary coming up. Either he completely overestimates how well he'll do there, or he is willing to burn it to try to get some Populist cred. Doesn't seem like a super-good plan either way.

djones520
02-14-2012, 04:12 PM
Personally I'm getting a bit sick of hearing about "American Cars". Hyundai and Kia, and I believe Honda, are all building factories here in America, while the "American Cars" have been moving to Mexico.

fettpett
02-14-2012, 05:45 PM
Personally I'm getting a bit sick of hearing about "American Cars". Hyundai and Kia, and I believe Honda, are all building factories here in America, while the "American Cars" have been moving to Mexico.

Don't forget Toyota, one of the biggest car manufactures in the US. GM, Ford, and Chrysler all build a majority of the vehicles in Canada or Mexico, but they are "assembled" at some plants in the US.

Odysseus
02-14-2012, 06:17 PM
I suppose that it's an improvement on the stock belonging to the auto unions, but it's still a bad idea. GM should have been allowed to reorganize under Chapter 11, but that would have meant reviewing existing contracts and obligations, something that the unions would not allow.

fettpett
02-14-2012, 06:23 PM
I suppose that it's an improvement on the stock belonging to the auto unions, but it's still a bad idea. GM should have been allowed to reorganize under Chapter 11, but that would have meant reviewing existing contracts and obligations, something that the unions would not allow.

just think, if they had been allowed to do that, Saturn and AM General would still be around

Arroyo_Doble
02-14-2012, 06:29 PM
What Mitt Romney gets wrong about the Detroit automakers’ bailouts (http://autos.yahoo.com/blogs/motoramic/mitt-romney-gets-wrong-detroit-automakers-bailouts-154006392.html)

....


"Three years ago, in the midst of an economic crisis, a newly elected President Barack Obama stepped in with a bailout for the auto industry."

In fact, the bailout began with President George W. Bush, who was forced to lend GM and Chrysler $17.4 billion in December 2008 after Senate Republicans blocked a rescue plan in Congress. Bush told reporters just last week that he was warned by Federal Reserve Chairman Ben Bernanke and Treasury Secretary Hank Paulson that if he didn't act to shore up GM and Chrysler, up to 1 million jobs could vanish. Knowing what we know now, says Bush, "I'd do it again."

"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."

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.

Odysseus
02-17-2012, 01:59 AM
just think, if they had been allowed to do that, Saturn and AM General would still be around

Or not, but the taxpayers wouldn't have been stuck with the tab. As it is, we bought two auto companies for the UAW. Cronyism at its finest... :rolleyes: