Mitt: Tough love for Detroit
Salt Lake Olympic savior Mitt Romney, a Michigan native whose father ran American Motors, says a bailout of the U.S. auto industry is a bankrupt idea:
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.Mitt says in a New York Times op-ed piece that drastic changes are needed in Detroit labor agreements and management for the industry to survive.
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.
5 Comments:
Romney has some good ideas for the auto industry. Maybe one of the "Big Three" should hire him as their CEO?
Loaning money to the Detroit 3 (can't call them the Big 3 any more)
Ooops! I didn't finish.
Loaning money to the Detroit 3 is like putting new wine in old bottles.
I read Romney's piece. His plan is based on the big 3 going into bankruptcy protection and restructuring with new management and renegotiating retirement payments, which are much bigger than foreign makers. The problem with the plan? It's based on the assumption that they will be able to restructure. In the current climate there is no financing available and most likely the big 3 will be simply liquidated to pay past lenders.
Let the government supply the refinancing during bankruptcy. But do not bail them out in their current forms no matter what!
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