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Romney to Detroit: Drop Dead

November 19, 2008

During the Michigan primary in January, former Massachusetts Governor and son of auto magnate Mitt Romney blasted John McCain for saying he didn't want to raise "false hopes that somehow we can bring back lost jobs." Now as the American auto industry teeters on the brink of collapse, Romney in a New York Times op-ed Wednesday has a much different message for Detroit: drop dead.
In January, Romney was singing a different tune about the need to save Michigan's car economy from its death spiral. Playing up his home state roots and father George's leadership of the old American Motors, Romney delivered a blistering attack against his primary GOP foe, John McCain:

"I want to bring Michigan back. I am not willing to sit back and say 'too bad for Michigan, too bad for the car industry, too bad for the people who lost their jobs, they are gone forever.' I will not rest when I am president of the United States until Michigan is brought back."

Alas, that was then and this is now.
In his screed today titled, "Let Detroit Go Bankrupt," Romney chastises Ford, GM and Chrysler and wishes a plague on all three of their houses. Predictably resorting to stale free-market nostrums, the usual right-wing union bashing and a revisionist hagiography of his own father, Romney insists failure is the only option for an industry which employs up to three million Americans and is vital to U.S. national security.
While he does call management to task, Romney like many of his Republican allies makes unions the principal villain in his free-market passion play. Despite recent UAW concessions which slashed hourly wages for new hires and will shift costs for health care and pension benefits onto the union, Romney pointed the finger of blame squarely at workers:

"First, their [Big Three] 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.
That extra burden is estimated to be more than $2,000 per car...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."

Not once does Romney quantify the impact of his recommendation that "without that bailout, Detroit will need to drastically restructure itself." There is no estimate of the devastating job losses Big Three bankruptcies would produce or the estimated $200 billion impact in unemployment insurance and other government safety net payments which would result from the collapse of GM alone. And Romney is silent on the national security implications as the builders of Abrams battle tanks, Humvees and armored fighting vehicles face halting production during wartime.
One topic, however, where Mitt Romney is not silent is the legend of his father, George Romney. In Romney's telling of the tale, the man who brought Americans such classics as the Rambler, the Marlin, the Pacer, the Gremlin and the Hornet before the ultimate 1987 fire sale of AMC to Chrysler represents the path forward for Detroit:

"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 - banks were threatening to deal it a death blow. The stock collapsed. I watched Dad work to turn the company around - 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's automakers...
...At American Motors, my dad cut his pay and that of his executive team, he bought stock in the company, and he went out to factories to talk to workers directly. Get rid of the planes, the executive dining rooms - all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat."

As for Romney's "own experiences," they include his days as a slash and burn venture capitalist at Bain. Earlier this year, he proclaimed, "I know why jobs come and go." Especially the "go" part, as evidenced by the hundreds of layoffs at SCM, a northern Indiana-based stationery company purchased by Ampad, a firm owned by Romney and a group of investors.
During that bitter Michigan primary struggle with John McCain in January, the "guy from Detroit" Mitt Romney pompously declared:

"This state needs someone who cares about this state more than one day a year."

Truer words were never spoken.

2 comments on “Romney to Detroit: Drop Dead”

  1. "That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota."
    Unions should perhaps agree to this, provided that the big three management also aligns their pay with that of the Japanese companies. Not that it will happen, since nobody will agree to a paycut that drastic (on either side) - they'd rather lose their jobs than their pay.

  2. Mittens is so transparently awful. What will tell people in Michigan the next time he runs for President?


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Jon Perr
Jon Perr is a technology marketing consultant and product strategist who writes about American politics and public policy.

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