Mitt Romney is feeling heat for his 2008 Op-Ed that he wrote for the New York Times called, "Let Detroit go Bankrupt." (Click to read Op-Ed). Many voters are abandoning their native son for what appears to be his "heartless" stance for their economic welfare.
I would be willing to bet that many of these voters have never read the Op-Ed and have no idea what Romney advocated in the "Detroit Bankruptcy."
Mitt Romney's Op-Ed shows that he actually offered several prescriptions to save Detroit's automakers.
Namely, he made specific suggestions for 1) Improving cash flow by cutting costs. He gave specific suggestions on how to alleviate the "per auto" financial burden so that the industry can better compete with foreign car makers. 2) Romney suggested ways to improve management and address the expensive relationship with big labor unions. 3) Romney made specific suggestions for improving innovation and creativity in the auto industry.
Never once did Mitt Romney advocate the total collapse of the Detroit's auto industry. In fact, at a closer look, it is clear that Mitt Romney wanted them to succeed and thrive like never before by going through a "managed bankruptcy."
What is a managed bankruptcy?
In a typical "managed bankruptcy" banks or private equity firms loan money to failing companies so that these companies can stay afloat while they restructure, shed unnecessary costs to eventually become stronger. As the New York Times points out, "In 2008 / 2009, Wall Street and private equity firms were in no position to loan that kind of money to GM and Chrysler." (click to read NYT article). So, the federal government stepped in and granted GM & Chrysler $80 billion of tax payer money to "manage" the bankruptcy.
This bailout money did exactly what Mitt Romney proposed. It "managed" the bankruptcy process. It worked. GM and Chrysler survived and are now reporting record profits.
So why does Mitt Romney continue to say that he is against the auto-industry federal bailout?
Romney is against the bailout because it left room for political favors and corruption. Romney argues the government should never have played the role it did. A private equity firm would have done a better job cutting costs--especially in regards to the cost of big unions--relationships which make it difficult for American automakers to truly compete with foreign automakers.
Romney believes the bailout money allowed Obama to bailout his influential big labor union friends. He slams President Obama for the political favors that were granted to big labor unions. Favors paid with tax payer dollars--political favors that could have been eliminated if an independent firm could have managed the bankruptcy with a government backed loan.
(It is important to mention that these big labor unions are now contributing millions of dollars to Obama's re-election campaign).
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Mitt Romney's well-thought out approach to rescue the auto industry--the heart and soul of Michigan--is now misinterpreted as heartless and disingenuous.
People in Michigan are hurt and feel that Mitt Romney turned his back on them in their time of need. But a closer look, shows that Mitt Romney's approach was right.
Michigan--Mitt Romney always had your back.
The irony is that voters are now flocking to Rick Santorum--Santorum who was and continues to be vehemently against an auto-industry bailout of any kind. Where would GM and Chrysler be today if nothing had been done?
Is anyone going to tell Michigan that Rick Santorum has never had their back?
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