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20th November 2008

Agreeing with Mitt

posted in National issues, Uncategorized |

It feels strange to be agreeing with Mitt Romney, but I have to second his opinion (in yesterday’s New York Times) that Congress should not bail out the Auto Industry. First, you have the ludicrous example of the three top Execs from Ford, GM and Chrysler all flying to Washington in their (separate) private jets. Representative Gary Ackerman (D. NY) is being quoted all over the web today with his witty comments, the clever analogy to a guy in a soup kitchen wearing a tuxedo as well as:

“Couldn’t you have downgraded to first class or something, or jet-pooled or something to get here?” Ackerman asked the executives at a hearing held by the U.S. House Financial Services Committee.

Rep. Brad Sherman (D. California) also chided the industry execs, but added:

“I also, though, must recognize that you’re in trouble mostly because of the economic downturn.”

I think it’s more than that. Romney calls for a total restructuring of the way the auto industry does business, something that a managed bankruptcy process would make possible. He calls for a collaboration between labor and management to end “the huge disadvantage in costs relative to foreign brands” as well as “accepting sanity in salaries and perks.” In The Economist last week, they agree that Chapter 11 is the solution:

The United States created Chapter 11 precisely to help companies that need protection from their creditors while they restructure their liabilities and winnow out the good business from the bad….The stigma of Chapter 11 (held up by the industry as poison for their business) would fade, obscured by price cuts, advertising and most of all news that the car companies were tackling their remaining problems…In many ways, Chapter 11 is more stable and predictable than depending upon the government.”

There are currently 2 responses to “Agreeing with Mitt”

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  1. 1 On November 20th, 2008, Lynne said:

    I don’t completely agree with Mitt – he’s wrong about some things. Yes, the Big Three are a collective dinosaur, but it’s not the unions and the worker liabilities doing it. Maybe the unions get a little more than most US workers but not as much as the media seems to portray it, with their “average $70 wage” lie they’ve been touting on the teevee.

    Read this comment on Blue Mass Group which sums up my feelings on the matter. Romney is anti-worker; make no mistake. What needs scrubbing at GM is the management class, and their way of doing things – like private jets and bonuses. If there’s going to be a reorg via bankruptcy, it should NOT be done Mitty’s way, but in a sane way. Yes, ask for SOME concessions from the unions, but the management has much more to answer for, as does the inefficiency of the way they run the business.

    From the above comment: “Get rid of the management as step one. There are lots of steps to take to make the industry reasonably healthy again. But class warfare against working people should not be one.”

  2. 2 On November 20th, 2008, Margaret said:

    Thanks for the BMG link; obviously there’s a lot more to the issue than Romney touches on, but he also says, “Management as it is must go.”

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