Debunking The Obama Spin On Auto Bailouts

Governor Mitt Romney
October 16, 2012

President Obama Adopted Mitt Romney's Idea Of Managed Bankruptcy For American Carmakers — But His Mishandling Of The Process Has Proved Costly

Mitt Romney Will Help Our Auto Industry Become Stronger And More Competitive:

As a Michigan native and the son of a car guy, Mitt Romney has always believed that a strong auto industry is an essential component of the nation's economy. He has a plan that will help the auto industry move forward into a new era of innovation and dominance.

   Domestic Energy Production That Aids Manufacturing: We are on the cusp of a manufacturing renaissance in the United States, and it will be made possible by an abundant supply of cheap, reliable energy within our borders. Mitt Romney will have a true all-of-the-above strategy that includes coal, natural gas, oil and other resources.

   Trade That Works For Our Auto Industry: Our workers make the best cars in the world. We must develop markets abroad where our cars can be sold. Mitt Romney will open new markets to American automakers far more aggressively than this President has.

   Stand Up To China And Level The Playing Field: Mitt Romney will stand up to countries like China that don't play by the rules. Starting on day one, Mitt Romney will make clear to China that they must respect the intellectual property of American manufacturers and open their markets to American products.

   Lower Our Corporate Tax Rate To Boost Competitiveness: Mitt Romney will reduce the corporate tax rate, so that our carmakers can compete on a level playing field both at home and around the world, and can afford to invest more in breakthrough products. He will also stop the foolish practice of imposing an extra tax on our automakers when they sell cars overseas so they can reinvest the profits here at home.

   Get Government Out Of The Car Business: President Obama has told Detroit what kind of cars to build, implemented extraordinarily onerous regulations that will drive up the cost of each car by thousands of dollars, and to this day owns more than one quarter of General Motors. Mitt Romney will get the federal government out of the auto industry and eliminate regulations that distort the market and drive up costs.

A Reminder — Mitt Romney Supported A Managed Bankruptcy Process For Our Automakers, Which Is What President Obama Ultimately Agreed To Support:

Months After Taking Office, President Obama Finally Arrived At The Conclusion That Managed Bankruptcy Was Preferable To His Initial Strategy. "The Obama's administration's leading plan to fix General Motors Corp. and Chrysler LLC would use bankruptcy filings to purge the ailing companies of their biggest problems, including bondholder debt and retiree health-care costs, according to people familiar with the matter. ... President Barack Obama's task force has told both companies that the administration prefers this route ... rather than the prolonged out-of-court process that has thus far frustrated administration officials." (The Wall Street Journal, 3/30/09)

The Obama Administration Ultimately Found Bankruptcy To Be The Only Way Forward. "The administration says a 'surgical' structured bankruptcy may be the only way forward for GM and Chrysler, and President Obama held out that prospect Monday. 'I know that when people even hear the word 'bankruptcy,' it can be a bit unsettling, so let me explain what I mean,' he said." (The Wall Street Journal, 3/30/09)

Romney: "In A Managed Bankruptcy, The Federal Government Would Propel Newly Competitive And Viable Automakers, Rather Than Seal Their Fate With A Bailout Check." MITT ROMNEY: "The American auto industry is vital to our national interest as an employer and as a hub for manufacturing. A managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs." (Mitt Romney, "Let Detroit Go Bankrupt," Op-Ed, The New York Times, 11/19/08)

Romney: "The Federal Government Should Provide Guarantees For Post-Bankruptcy Financing..." "The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk. In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check." (Mitt Romney, "Let Detroit Go Bankrupt," Op-Ed, The New York Times, 11/19/08)

What Did Governor Romney NOT Support? Labor Union Handouts, Giving American Companies To Foreign Owners, Ill-Considered Dealership Closings, And Keeping Government In The Car Business:

President Obama's Handling Of The Bailout Gave The United Auto Workers Union A Majority Ownership Stake In Chrysler. "The Obama administration's decision to bail out Chrysler gave the union trust what was initially a majority ownership position of 55 percent of its shares." (Reuters, 6/3/11)

The Obama Administration Handed Over Control Of Chrysler To Fiat, An Italian Automaker. "Chrysler LLC, for years America's third-biggest automaker, survived perhaps the most dire of its periodic near-death experiences in 2008 and 2009, when the federal government forced it into bankruptcy, pumped in $10 billion in taxpayer funds and put it under the control of the Italian automaker Fiat, with the auto workers union as the company's biggest shareholder." (The New York Times, 7/30/12)

President Obama's Auto Task Force Pressed GM And Chrysler To "Close Scores Of Dealerships Without Adequately Considering The Jobs That Would Be Lost." "President Obama's auto task force pressed General Motors and Chrysler to close scores of dealerships without adequately considering the jobs that would be lost or having a firm idea of the cost savings that would be achieved, an audit of the process has concluded." (The New York Times, 7/18/10)

   The Obama Administration "Contributed To The Accelerated Shuttering Of Thousands Of Small Businesses" And Potentially Added "Tens Of Thousands Of Workers" To The Unemployment Lines. (CNN Money, 7/19/10)

General Motors Now Wants The Government To Sell Its Stake In The Company, But The Obama Administration Is Resisting. "The Treasury Department is resisting a push by General Motors Co. to sell the government's entire stake in the auto maker — the latest source of tension between two unlikely partners thrust together at the depths of the financial crisis. U.S. taxpayers kept the nation's largest auto maker by sales afloat with a $50 billion bailout in 2009 and now own 26.5% of the Detroit company. But GM executives have grown increasingly frustrated with that ownership and the stigma of being known as 'Government Motors.'" (The Wall Street Journal, 9/17/12)

Taxpayers Are Taxpayers Are Currently Projected To Lose More Than $25 Billion On The Bailouts Of Auto Industry. (U.S. Treasury Department, 8/12)