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The Real Story Behind the U.S. Auto Bailouts

That automotive supply chain, according to Rattner, could have lost an estimated 300,000 jobs if the government had simply shut down the entire Chrysler operation.

Romney first suggested in his 2008 op-ed that the Big Three ( Ford (F - Get Report) was still part of the discussion at this point) negotiate new labor agreements to match pay and benefits of workers who worked for foreign car company plants in the American Sun Belt (non-union workers). He additionally wrote that retirement benefits should be reduced. Romney estimated that the "extra burden" that American automobile companies shoulder means it costs them some $2,000 more than foreign competitors to make a car.

Rattner wrote in his 2009 retrospective that senior Obama official Ron Bloom successfully negotiated UAW concessions on fringe benefits and company obligations with Chrysler.

"We believed that Chrysler's labor costs would finally be competitive with the transplants," Rattner wrote at the time.

The government scaled back labor costs, which provided the groundwork for an eventual comeback. Romney, though in vague terms, did make this suggestion.

Opponents have said that the UAW received preferred treatment against other unsecured creditors, but Stephen J. Lubben, a law professor at Seton Hall University, clarified the situation.

Lubben argued that if the government -- then a major stakeholder in the automotive companies -- simply allowed liquidation, it would have faced possible greater costs: unemployment payments, unpaid environmental cleanup costs and other analogous expenses.

"Indeed, unlike a private lender who can largely ignore these costs since they will be absorbed by the government, the government as lender has a better set of incentives in this instance," Lubben wrote.

Romney then wrote that management must be pushed out the door: "Second, management as is must go."

Rattner wrote a nearly identical statement in his 2009 retrospective on the events: "Management has got to go."

That's what happened.

Rattner booted GM Chief Executive Rick Wagoner and replaced him with GM lifer Fritz Henderson . When Fiat swooped in to help save Chrysler, Fiat CEO Sergio Marchionne took the helm. Marchionne fit the profile of another Romney suggestion: a new face from an unrelated industry.
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