ROMNEY: SELL U.S. BAILOUT STAKES IN GENERAL MOTORS AND ALLY FINANCIAL
Washington – Mitt Romney says he will quickly sell the government’s stakes in General Motors, Ally Financial and others that received bailouts if he is elected president. In a Detroit News interview Friday, the Republican presidential candidate and Michigan native harshly criticized President Barack Obama’s record on jobs and called his economic policies “an abject failure.” “I don’t like the government owning American businesses,” Romney said by telephone. “The government’s interest in these companies should return to shareholders, a board of directors, to employees and to management.” The weak stock market has delayed the Treasury Department’s exit from GM, where it holds a 26.5 percent stake as part of a $49.5 billion bailout. A planned initial public stock offering of Detroit-based Ally Financial, in which the Treasury holds a 74 percent stake as part of a $17.2 billion bailout, is also on hold. Romney said that Republican President George W. Bush should not have given $25 billion to GM, Chrysler and their finance companies in his final weeks in office. Instead, Bush should have required automakers to file for bankruptcy, as Romney had proposed. “They needed to move into a managed bankruptcy process rather than getting money up front by President Bush or President Obama,” Romney said. “They wasted a lot of money.” Last month, the Treasury upped its estimate of predicted losses on the $85 billion auto bailout to $14.3 billion. Since then, GM’s stock has fallen sharply — and the government could lose $15 billion on its GM bailout. Romney said he doesn’t want to hold onto government stakes to maximize taxpayer returns. “That’s not consistent with free enterprise,” he said. Government could have played a role in standing behind warranties — or in bankruptcy financing. “If government is needed to get the DIP, the debtor in possession financing, that’s something you look at,” he said. Critics of Romney’s approach say automakers were unprepared for bankruptcy in late 2008 — and that without an immediate government help they would have been forced into an uncontrolled bankruptcy or collapse. Last month, former Obama auto czar Ron Bloom said that without government financing, GM and Chrysler would not have survived. “Under ordinary economic circumstances, I would say this is the price that failed companies must pay, and I would not favor intervening,” Bush said in December 2008. “But these are not ordinary circumstances. In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action.” The Obama administration repeatedly has said it wants to sell its GM stock “as soon as practicable,” but hasn’t laid out a timetable for a complete exit. The government sold its remaining Chrysler stake in July, booking a $1.3 billion loss on its $12.5 billion bailout. Obama has noted more than 1 million auto jobs could have been lost if the industry collapsed. Romney dismissed the Obama administration’s Midwest campaign pitch touting how the auto bailout helped revive the industry. “If the Democrats are going to point to the economy as a reason to vote for the president, he’ll be out of office,” Romney said. Romney noted that the August jobs report released Friday showed no net gain of new jobs. “He’s on track to be the first president in modern history to have an entire term without any job gains,” Romney said, asserting Americans “have zero confidence in a president that’s created zero jobs.” The White House said Friday the private sector has added jobs for 18 straight months, for a total of 2.4 million jobs over that period. The employment rate remained at 9.1 percent in August. Romney, whose father George Romney was chief executive at American Motors and a Michigan governor, wanted to be an auto executive when he was growing up. “That was my dream,” said Romney, who spent a summer in college working for Chrysler Corp. and owns a 2005 Ford Mustang convertible. He rejected the idea that Republicans were willing to let the auto industry die. “I’m happy to stand up next to anybody in my affection for the auto industry and my conviction that America can compete in automobiles — at home and abroad,” Romney said. “My plan of a managed bankruptcy was essential to getting the auto companies on their feet.” Obama is in Detroit today to address workers, including thousands of members of the United Auto Workers. Romney vows to boost travel to Michigan as the Michigan primary gets closer next year. “I love Michigan and Detroit and I can assure you I will do everything in my power if I’m president to get Michigan, Detroit, the auto industry and manufacturing across this country going again,” he said. Romney praised Michigan Gov. Rick Snyder, a former businessman, as “the best hope to get Michigan back on track. He’s reining in the scale of government and making Michigan business-friendly again, and that’s essential.” The former Massachusetts governor is laying out a jobs plan at a speech this week in Nevada. “We cannot say goodbye to manufacturing,” he said. “The success of the auto industry is evidence of my conviction that American manufacturing does not have to retreat in the face of China. American manufacturing can succeed. … The idea that we have to see more and more products move from our shores to China is unacceptable.” He said his jobs plan “will get America on track to win.” Obama will offer his own jobs plan to a joint session of Congress on Thursday. |
