Bonzer Wolf™ (bonzerwolf) wrote,
Bonzer Wolf™

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Let Detroit Go Bankrupt

Those seems like harsh words but in fact this is the only way to save the auto industry and the millions of related jobs in the U.S.  Mitt Romney, former governor of Massachusetts and candidate for the 2008 Republican presidential nomination agrees.  "Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check."

Romney was born in Detroit, the son of an auto chief executive. In 1954, his dad, George Romney, was tapped to run American Motors when the president suddenly died. The company itself was on life support — banks were threatening to deal it a death blow. The stock collapsed. His dad turned the company around. From the lessons of that turnaround Romney offers solutions and you can read his entire Op-Ed contribution here

"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. The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk."

The only reason the Democrats want to bail out the automakers anyway is to save the auto unions who, with declining national enrollment, can hardly afford to lose labor contracts with Detroit’s big three.  Representative Barney Frank has made it very clear that bankruptcy would cripple the unions, which is not acceptable to his party.

Tags: economy, libertarian, politics, recession

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