{"id":1026,"date":"2008-11-19T17:39:09","date_gmt":"2008-11-19T22:39:09","guid":{"rendered":"http:\/\/www.jasetaro.com\/blog\/?p=1026"},"modified":"2008-11-19T17:41:24","modified_gmt":"2008-11-19T22:41:24","slug":"mitt-romney-let-detroit-go-bankrupt","status":"publish","type":"post","link":"https:\/\/www.jasetaro.com\/blog\/2008\/11\/19\/mitt-romney-let-detroit-go-bankrupt\/","title":{"rendered":"Mitt Romney: Let Detroit Go Bankrupt"},"content":{"rendered":"

Former Massachusetts Governor Mitt Romney has a must read Op Ed<\/a> on troubles facing Chrysler, Ford and GM in today’s New York Times.<\/p>\n

\n

Let Detroit Go Bankrupt<\/h3>\n

By Mitt Romney, New York Times Op-Ed, Wednesday, November 18, 2008<\/p>\n

Boston<\/p>\n

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\u2019t go overnight, but its demise will be virtually guaranteed.<\/p>\n

Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course \u2014 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.<\/p>\n

I love cars, American cars. I was born in Detroit, the son of an auto chief executive. In 1954, my dad, George Romney, was tapped to run American Motors when its president suddenly died. The company itself was on life support \u2014 banks were threatening to deal it a death blow. The stock collapsed. I watched Dad work to turn the company around \u2014 and years later at business school, they were still talking about it. From the lessons of that turnaround, and from my own experiences, I have several prescriptions for Detroit\u2019s automakers.<\/p>\n

First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.<\/p>\n

That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota\u2019s Avalon. Of course the Avalon feels like a better product \u2014 it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable. Read the rest…<\/a><\/p><\/blockquote>\n

Gov. Romney is right, simply witting Detroit a check will only delay the inevitable. If the Big 3 are going to survive long term they need restructure drastically.<\/p>\n

Allahpundit has commentary and video @ Hot Air<\/a>.<\/p>\n

Counterpoint:<\/strong> General Motors Chairman and CEO Rick Wagoner explains “Why GM Deserves Support<\/a>” in today’s Wall Street Journal.<\/p>\n","protected":false},"excerpt":{"rendered":"

Former Massachusetts Governor Mitt Romney has a must read Op Ed on troubles facing Chrysler, Ford and GM in today’s New York Times. Let Detroit Go Bankrupt By Mitt Romney, New York Times Op-Ed, Wednesday, November 18, 2008 Boston IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[62,7],"tags":[313,166,331,314,315,323,94,332],"class_list":{"0":"post-1026","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-education","7":"category-politics","8":"tag-auto-industry","9":"tag-bailout","10":"tag-bankruptcy","11":"tag-chrysler","12":"tag-ford","13":"tag-gm","14":"tag-mitt-romney","15":"tag-rick-wagoner","16":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/pfpI7-gy","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":997,"url":"https:\/\/www.jasetaro.com\/blog\/2008\/11\/15\/wall-street-journal-just-say-no-to-detroit\/","url_meta":{"origin":1026,"position":0},"title":"Wall Street Journal: Just Say No to Detroit","author":"Jeff","date":"November 15, 2008","format":false,"excerpt":"There's an interesting essay by New York University finance professor David Yermack in today's Wall Street Journal. Just Say No to Detroit Given the abysmal performance by Detroit's Big Three, it would be better to send each employee a check than to waste it on a bailout, says David Yermack.\u2026","rel":"","context":"In "Economy"","block_context":{"text":"Economy","link":"https:\/\/www.jasetaro.com\/blog\/category\/economy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1088,"url":"https:\/\/www.jasetaro.com\/blog\/2008\/12\/11\/will-the-auto-industry-bailout-work\/","url_meta":{"origin":1026,"position":1},"title":"Will The Auto Industry Bailout Work?","author":"Jeff","date":"December 11, 2008","format":false,"excerpt":"I've been so focused on finishing up the projects I'm working before the holidays I've only been half attention to the news recently. I completely missed Holman W. Jenkins Jr. latest Wall Street Journal column: The Bailout That Won't Would you buy a car from Congress? By Holman W. Jenkins\u2026","rel":"","context":"In "Money & Investing"","block_context":{"text":"Money & Investing","link":"https:\/\/www.jasetaro.com\/blog\/category\/money-and-investing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1539,"url":"https:\/\/www.jasetaro.com\/blog\/2009\/02\/18\/not-just-no-but-hell-no-gm-chrysler-seek-216-billion-in-aid\/","url_meta":{"origin":1026,"position":2},"title":"Not Just No, But Hell No: GM, Chrysler Seek $21.6 Billion in Aid","author":"Jeff","date":"February 18, 2009","format":false,"excerpt":"General Motors and Chrysler have submitted their recovery plans submitted to the U.S. Treasury and are asking for another $21.6 billion in government aid. Not just no, but hell no... No amount of government aid is going to bring them back to profitability so long as the government forces them\u2026","rel":"","context":"In "Economy"","block_context":{"text":"Economy","link":"https:\/\/www.jasetaro.com\/blog\/category\/economy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1015,"url":"https:\/\/www.jasetaro.com\/blog\/2008\/11\/18\/cnsnewscom-union-workers-at-big-three-automakers-average-73-an-hour\/","url_meta":{"origin":1026,"position":3},"title":"CNSNews.com: Union Workers at Big Three Automakers Average $73 an Hour","author":"Jeff","date":"November 18, 2008","format":false,"excerpt":"The headline may be a little misleading but the article is worth reading: Union Workers at Big Three Automakers Average $73 an Hour By Pete Winn, Senior Writer\/Editor, CNSNews.com, Tuesday, November 18, 2008 Economists in Michigan, the long-time home of the auto industry, say they don\u2019t support the proposed multi-billion\u2026","rel":"","context":"In "Economy"","block_context":{"text":"Economy","link":"https:\/\/www.jasetaro.com\/blog\/category\/economy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1104,"url":"https:\/\/www.jasetaro.com\/blog\/2008\/12\/12\/treasury-throws-auto-industry-a-life-line\/","url_meta":{"origin":1026,"position":4},"title":"Treasury Throws Auto Industry a Life Line???","author":"Jeff","date":"December 12, 2008","format":false,"excerpt":"Damn! What is it with the Bush administration? Senate Republicans rightly stopped the auto industry bail last night and today the Bush Administration decides to use TARP funds to throw a life line to GM and Chrysler. From FoxBusiness: Despite the abrupt death last night of bailout legislation in Congress,\u2026","rel":"","context":"In "Money & Investing"","block_context":{"text":"Money & Investing","link":"https:\/\/www.jasetaro.com\/blog\/category\/money-and-investing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1292,"url":"https:\/\/www.jasetaro.com\/blog\/2009\/01\/04\/wsj-let-detroit-build-profitable-cars\/","url_meta":{"origin":1026,"position":5},"title":"WSJ: Let Detroit Build Profitable Cars","author":"Jeff","date":"January 4, 2009","format":false,"excerpt":"I'm doing a little catching up this weekend and trying to read all the two dozen or so articles I bookmarked over the past couple of weeks. One of the items I bookmarked was Holman W. Jenkins Jr. December 31st Op Ed piece in the Wall Street Journal \"Let Detroit\u2026","rel":"","context":"In "Economy"","block_context":{"text":"Economy","link":"https:\/\/www.jasetaro.com\/blog\/category\/economy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/posts\/1026","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/comments?post=1026"}],"version-history":[{"count":0,"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/posts\/1026\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/media?parent=1026"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/categories?post=1026"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/tags?post=1026"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}