This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

What If Romney Had Backed Auto Bailouts?

To look back at Romney's New York Times November op-ed piece famously headlined, "Let Detroit Go Bankrupt," is to make Romney-backers wonder what might have been.

Based on the headline, Romney was prescient. When he wrote his piece, many in the auto industry believed bankruptcy would scare off so many buyers that any automaker that filed would destroy itself. Yet within five months after Romney's column appeared, Chrysler filed for bankruptcy, and within seven months, GM filed. These bankruptcies saved both companies,

Not only did Romney correctly advocate for auto industry bankruptcies, but also he expertly summarized the Detroit Three's problems, including: "The suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses." His prescription: "their huge cost disadvantage in costs relative to foreign brands must be eliminated;" "management must go;" "new management must work with labor leaders to see that the enmity between labor and management comes to an end;" and "investments must be made for the future."

All four of these things have, in fact, occurred. At Ford (F - Get Report) , the process began when Alan Mulally arrived as CEO in 2006. At GM and Chrysler, the work also began before the 2009 bankruptcies, which sped things up.

In fact, it seems that the main thing separating Romney from Obama on the bailout is that Obama gave automakers debtor-inpossession financing while they were still in bankruptcy, while Romney said he would have given them the money when they came out of bankruptcy. His concept, he said, was that "the federal government should provide guarantees for post-bankruptcy financing."

Somewhere in the Romney campaign is a person who decided to take this Detroit guy and turn him into an anti-Detroit guy. Too bad they didn't look at the electoral map first.

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
F $13.24 -1.40%
GM $30.68 -1.80%
AAPL $94.20 -1.00%
FB $117.82 0.33%
GOOG $697.00 0.67%


Chart of I:DJI
DOW 17,660.99 -89.92 -0.51%
S&P 500 2,048.93 -14.44 -0.70%
NASDAQ 4,726.4480 -36.7760 -0.77%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs