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What Romney really said about GM . . .

AdamT said:
Actually, it is a dead-nuts fact. The actual bankruptcies required $80 billion from the government and it would have cost more if it had gone through private bankruptcy which could not have been done as quickly.

PolitiFact | Granholm says Romney's response to auto crisis was 'Let Detroit go bankrupt'
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Thanks for that link. Politifact just became irrelevant.

Our ruling

Granholm accused Romney of saying "Let Detroit go bankrupt." The line, a popular Democratic talking point, suggested that Romney wanted to let the auto companies go out of business.

That was the headline, which he did not write, and he was not suggesting the auto companies should go belly-up. But he did advocate a managed bankruptcy that would produce carmakers with lower labor costs and products that could compete better in the marketplace.

We rate the statement Half True.
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Should I be fair for a minute to please Maggie? :D

Okay, I will.

The truth is that both sides are spinning this issue. Romney did not say that GM and Chrysler should go out of business. He did say that they should go through a structured bankruptcy very much like the one that the Obama administration engineered. He did say that the government should give them support post-bankruptcy. What he did NOT say is that the government should finance the structured bankruptcy, which is a hell of an omission if that's what he had in mind. In point of fact it was an $80 billion omission, which was the cost of the initial outlay. The government has since recovered a lot of that money, but we are still about $23 billion in the hole.

I think it's reasonable to assume that Romney did not intend for the government to finance the bankruptcy, or else he should have mentioned that little detail. If the government had not financed the bankruptcy the companies would have been liquidated. So I think Obama's claim is ultimately true: if Romney had had his way GM and Chrysler would be history. But it is not as clear cut or as simple as Obama suggests.
 
Deuce said:
MaggieD said:
No offense, Adam, but I think that a guy who put companies back together (and took them apart) for a living recognized that GM was never EVER going to be liquidated. You and I are always going to disagree, Adam, because our subjective opinions are soooo different; but I do enjoy seeing your name in the New Posts thread, 'cause I always know you'll get my heart racing. :rofl
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If he failed to see it, he's not as good at putting companies back together as you think he is. That kind of credit wasn't there for anybody.

Obama never claimed Romney said "Let GM fail." You're making a false accusation. So who is really lying?
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What experience and expertise do you have at “putting companies back together”, and how does it compare to Mr. Romney's? He's actually done it, on several occasions, and has clearly demonstrated that he knows how to do so. How many companies have you “put back together”?
 
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AdamT said:
Should I be fair for a minute to please Maggie? :D

Okay, I will.

The truth is that both sides are spinning this issue. Romney did not say that GM and Chrysler should go out of business. He did say that they should go through a structured bankruptcy very much like the one that the Obama administration engineered. He did say that the government should give them support post-bankruptcy. What he did NOT say is that the government should finance the structured bankruptcy, which is a hell of an omission if that's what he had in mind. In point of fact it was an $80 billion omission, which was the cost of the initial outlay. The government has since recovered a lot of that money, but we are still about $23 billion in the hole.

I think it's reasonable to assume that Romney did not intend for the government to finance the bankruptcy, or else he should have mentioned that little detail. If the government had not financed the bankruptcy the companies would have been liquidated. So I think Obama's claim is ultimately true: if Romney had had his way GM and Chrysler would be history. But it is not as clear cut or as simple as Obama suggests.
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Well, I appreciate your failed attempt, actually. ;)

Romney knew that if GM went through full-blown bankruptcy proceedings their debt would have been restructured; they'd have been given ample time to pay down their debt; attract investors; renegotiate union contracts; the factories would have stayed open; labor rates made more competitive; bond holders wouldn't have lost 100% of their holdings; investment firms wouldn't be concerned about holding bonds (since bonds are protected in Chapter 11 bankruptcies -- and, as a result, be hesitant to buy large corporate bonds in the future.

There is no way on God's green earth that GM would have closed shop and disappeared. So now? GM is still in the exact same mess they were in before. Wait for it . . . it'll come around again.
 
MaggieD said:
Well, I appreciate your failed attempt, actually. ;)

Romney knew that if GM went through full-blown bankruptcy proceedings their debt would have been restructured; they'd have been given ample time to pay down their debt; attract investors; renegotiate union contracts; the factories would have stayed open; labor rates made more competitive; bond holders wouldn't have lost 100% of their holdings; investment firms wouldn't be concerned about holding bonds (since bonds are protected in Chapter 11 bankruptcies -- and, as a result, be hesitant to buy large corporate bonds in the future.

There is no way on God's green earth that GM would have closed shop and disappeared. So now? GM is still in the exact same mess they were in before. Wait for it . . . it'll come around again.
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Look, there is simply no way on earth GM and Chrysler could have gone through Chapter 11 without a huge chunk of change from the government. That's what this comes down to. If Romney claims that they could have been saved without a government bailout then he is flat-out lying. Any bankruptcy expert or attorney will tell you that.
 
sorry maggie, but mitt got it wrong and so have you
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. 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.
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clearly. mitt displays his objection to a bailout
and that guaranteed demise ... well, we know that is false
what we do know is that detroit needed a check to achieve a turnaround; private capital was not available after the meltdown despite its being essential to a bankrupt company otherwise facing the prospects of liquidation to have access to outside funding
... this "analysis" above was presented by someone who repeatedly tells us how savvy he has been in business:
From the lessons of that turnaround, and from my own experiences, I have several prescriptions for Detroit’s automakers.
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well, that turnaround he alludes to is about American motors. a company that died
we do not need romney's prescription
... any bailout will only delay the inevitable.
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see what i mean
The federal government should provide guarantees for post-bankruptcy financing ...
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and here is what you seem not to understand
in bankruptcy court, when a firm is not able to show it has access to capital it requires to effectively reorganize, the bankruptcy judge has no other alternative but to convert the case to a chapter seven (straight bankruptcy) matter, where the corporation's assets are sold to (partially) satisfy creditor claims. but for the availability of the FEDERAL bailout, GM was toast
now, i can understand why romney would want to shake his etch-a-sketch, just like his supporters, and pretend he took a sound position rather than the foolish one he originally proposed
and if you continue question that conclusion, let's examine the final sentence of your proffered quote:
In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check.
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my emphasis was added to illustrate that romney was very specifically opposed to the bailout; the bailout which saved GM and its employees, and the many other companies which are part of the supply and dealership chain. this cannot be spun to be something other than what it actually was ... at least not to those who want to examine the facts
 
MaggieD said:
Well, I appreciate your failed attempt, actually. ;)

Romney knew that if GM went through full-blown bankruptcy proceedings their debt would have been restructured; they'd have been given ample time to pay down their debt; attract investors; renegotiate union contracts; the factories would have stayed open; labor rates made more competitive; bond holders wouldn't have lost 100% of their holdings; investment firms wouldn't be concerned about holding bonds (since bonds are protected in Chapter 11 bankruptcies -- and, as a result, be hesitant to buy large corporate bonds in the future.

There is no way on God's green earth that GM would have closed shop and disappeared. So now? GM is still in the exact same mess they were in before. Wait for it . . . it'll come around again.
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…and the American economy is left poorer by the amount of taxpayer money that was dumped into this hole, to delay the inevitable.
 
justabubba said:
sorry maggie, but mitt got it wrong and so have you

clearly. mitt displays his objection to a bailout
and that guaranteed demise ... well, we know that is false
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I don't think that's quite right, and that is part of the confusion. What Romney was objecting to there, specifically, was the bailout proposal that GM put forward. Obama also rejected that proposal.
 
MaggieD said:
I wasn't aware of this, actually. Romney was correct. Obama was wrong. His campaign lied. Romney NEVER said, “Let GM fail.”

Mitt Romney's op-ed piece that started it all:



OBAMA AND HIS CAMPAIGN HAVE LIED ALL ALONG. ​Conservatives, we should have caught this. Or maybe everyone did but me...

Thoughts?
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Right like how Romney keeps saying Obama took money out of medicare to pay for Obamacare.
 
Bob Blaylock said:
…and the American economy is left poorer by the amount of taxpayer money that was dumped into this hole, to delay the inevitable.
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The American economy would imploded if GM and Chrysler had gone under at the height of the recession. The stock markets would have tanked worse than they did when Lehman went under and over a million people would have been put out of work. The government would have been on the hook for many of those employees' pensions and of course they would have ended up paying out huge additional sums in unemployment compensation. In the end it would have cost us far more to let them fail than it has to save them.
 
Bob Blaylock said:
…and the American economy is left poorer by the amount of taxpayer money that was dumped into this hole, to delay the inevitable.
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You are right. And take a look at the used car market these days. It is booming - if you have one to sell. Until the last few years, we would shop around for deals on used cars, clean them up / fix them up and re-sale them for a profit. Now days, there are many less cars in the used market because not near as many people are buying new. And what is out there, is priced up because that is what a lot of folks are buying. Most Americans can't even afford new cars but be assured that we are manufacturing them. Doesn't matter that we make so many that won't sell...that it drives the value down and a $20,000 is a $5,000 in three or four years.
 
MaggieD said:
Oh, stop it.
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Also I really don't see how this defends Romney. Last sentence seemed to only say "well protect the consumers" but not much about saying GM.

justabubba highlighted some very good points here. His tone is hinting towards "let gm go bankrupt"

Romney likes to sugar coat things and cover his true meaning. But if you're a good reader you'd realize he's opposed to a bailout.

Romney also loves carrots and sticks. Like how he says lower rates and close loopholes. When what he really means is cut taxes for himself and raise taxes on the middle class. Talk about smoke and mirrors.

I'll bet you anything Romney loves using that term because he's heard people say that about himself so often.

After all thats how he made all his money.
 
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AdamT said:
I don't think that's quite right, and that is part of the confusion. What Romney was objecting to there, specifically, was the bailout proposal that GM put forward. Obama also rejected that proposal.
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i can't agree
it was clear from my reading of maggie's cite, that mitt was opposed to a federal bailout
not any particular one


in fact, it was the shrub who authorized the bailout. it was up to Obama to establish a system to monitor GMs actions once it had the funds and to assure repayment
 
MaggieD said:
I wasn't aware of this, actually. Romney was correct. Obama was wrong. His campaign lied. Romney NEVER said, “Let GM fail.”

Mitt Romney's op-ed piece that started it all:



OBAMA AND HIS CAMPAIGN HAVE LIED ALL ALONG. ​Conservatives, we should have caught this. Or maybe everyone did but me...

Thoughts?
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Not a lie at all. There is a major difference between the government providing direct debtor-in-possession financing before the bankruptcy, as Bush-Obama did, and offering to provide loan guarantees for a post-bankruptcy financing, particularly at a time when investment banks were frozen and could no such investing. The first approach was one certainty and decisiveness and the alternative somewhat theorhetical, if not pie-in-the-sky.

Sorry, if you remember 2008-09, no one was investing in anything. The banks were all insolvent and without leadership, in most cases. No single bank or consortium of banks was in a position to loan $50-70B on moments notice. The fact was, it was the government or it was nothing... in the interim, the confidence GM and Chrysler (and even Ford) was rapidly eroding. Time was of the essence. There was no one to invest and no time to put that investment together. It was government making a direct investment or it was letting the industry fail. (Not to mention that loan guarantees generally offer tax payers all the risk and none of the reward; and the private sector almost risk-free profit).
 
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AdamT said:
The government already provides tons of money for basic research, but I agree that they could invest more.
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Some of that tons of money could get spent more wisely.....IMO, NASA should spend less on space programs and more on energy research.
 
MaggieD said:
No offense, Adam, but I think that a guy who put companies back together (and took them apart) for a living recognized that GM was never EVER going to be liquidated.
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Maggie,

The op-ed makes clear that Romney wanted Detroit to survive (and saw Detroit as "vital" to the nation's economy) and offered a well-reasoned plan. His point about structured bankruptcy as a mechanism for achieving necessary restructuring was spot-on. However, Adam is right about the state of the credit markets at the time. They had broken down. Even blue-chip corporations such as GE had to use the Fed's corporate paper facility, as they were unable to raise funds on their own. In that environment, it is not likely that government guarantees would have induced the private sector to provide funding for GM or Chrysler.

Having said that, given his past work in business and his pragmatic approach to governing in Massachusetts, I believe Romney would ultimately have agreed to direct government financing once convinced that neither GM nor Chrysler could raise private funds even with government guarantees. However, that would have been a last resort so to speak. His campaign comments that he would not have allowed Detroit to fail suggests that he would likely have pursued additional measures. However, he still believes that had his approach been pursued early on, direct government intervention would have been unnecessary.
 
AdamT said:
The American economy would imploded if GM and Chrysler had gone under at the height of the recession. The stock markets would have tanked worse than they did when Lehman went under and over a million people would have been put out of work. The government would have been on the hook for many of those employees' pensions and of course they would have ended up paying out huge additional sums in unemployment compensation. In the end it would have cost us far more to let them fail than it has to save them.
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geez man, wake up. they would not have gone under. GM has billions in valuable plants and equipment. they would have been on the market at bargain prices after a bankruptcy proceeding. The would have been snapped up and new companies would have been started. it would have been great for the economy and the car industry.

the loser would have been the UAW since those new companies would have had union representation votes and the UAW might have lost a lot of paying members---and obama would have lost a lot of union money and votes. thats what this was about---saving the UAW.
 
UtahBill said:
Some of that tons of money could get spent more wisely.....IMO, NASA should spend less on space programs and more on energy research.
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OH, but it is. Obama has NASA working on muslim outreach.
 
smb said:
Big key there Post-Bankruptcy guaruntees....There was not capital to allow a post-bankruptcy without DIRECT Federal funds. Please put your spin somewhere else. Romney stated directly that he did NOT support direct Federal funds for the auto industry. He believed private capital should be used. If no private capital then the company fails. The post-bankruptcy would have been AFTER the GM and Chrysler went OUT OF BUSINESS. There was NO PRIVATE CAPITAL available. Sell your spin somwhere else. Romney, like almost every issue, is trying to have it all ways to anyone willing to buy is crap. If you buy crap you get crap.
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The difference is that Romney understands how this works using private funds and govt guarantees, and you don't. Don't try to tell me you know more about this than a man who did this kind of thing for years. Obama is a lawyer, not a businessman. Whatever decision he made was based on advise from people around him, Romney actually knows how this stuff works.
 
MaggieD said:
From the transcript:
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But that isn't the claim you made. At no point does Obama claim Romney said those words. Are you retracting your OP? Because you put the words "Let GM fail" in quotes, as if Obama made the claim that Romney used those exact words.
 
UtahBill said:
Some of that tons of money could get spent more wisely.....IMO, NASA should spend less on space programs and more on energy research.
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Energy research is not their mission. WTF are you talking about? DoE has the energy mission. Spending money wisely everyone agrees on. If you want NASA to spend less on space, then they should focus on aeronautics, but not energy.
 
MaggieD said:
You don't understand bankruptcy. This is where the Obama got the fodder that he wanted GM to fail. That's not what Romney wanted at all. And not what would have happened. Please don't pretend to be knowledge about that which you obviously know nothing.

I'd always agreed with the logic of Romney to let GM go through bankruptcy...but I didn't know that at the same time he'd supported government loan guarantees. I've been bamboozled by the spin!! ;)
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Romney did support bankruptcy (chapter 11), and financing from the private sector with government guarantees. The problem arises when determining whether GM could have qualified for chapter 11. My understanding has always been that GM would have not qualified for chapter 11, and couldn't have gotten private financing, which would have resulted in a chapter 7 liquidation.

The part of Romney's plan that I didn't agree with, however, is the part where he advocates paying for GMs issues by draining pensions and labor costs. This treatment of labor and pensions is reminiscent of his Bain capital methodologies, where the shareholders push a big portion of the loss onto employees. Investment works on the premise of "risk begets reward". As I've said many times, these days the risk is passed off to others, while the rewards are retained by investors.
 
American said:
Energy research is not their mission. WTF are you talking about? DoE has the energy mission. Spending money wisely everyone agrees on. If you want NASA to spend less on space, then they should focus on aeronautics, but not energy.
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To be fair, powering spaceships does require specific energy research.
 
American said:
Energy research is not their mission. WTF are you talking about? DoE has the energy mission. Spending money wisely everyone agrees on. If you want NASA to spend less on space, then they should focus on aeronautics, but not energy.
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That's not entirely accurate. Part of the mission of NASA includes research into various types of energy sources for propulsion of their space vehicles.
 
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