In a Detroit News op-ed on Tuesday, Mitt Romney offers a defense of his 2008 declaration, offered in a New York Times op-ed, that if the auto industry received bailout money, “you can kiss the American auto industry goodbye.”
“The president tells us that without his intervention things in Detroit would be worse,” he writes in Tuesday's op-ed. “I believe that without his intervention things there would be better.”
Romney explains that he was arguing for a managed bankruptcy: "[That] may sound like a death knell," he writes. "But, in fact, it is a way for a troubled company to restructure itself rapidly, entering and leaving the courtroom sometimes in weeks or months instead of years, and then returning to profitable operation.”
In the case of GM and Chrysler, Romney writes, both companies were weighed down by extra labor, pension and real estate costs. Romney said the Obama administration needs “to divest itself of its ownership position in GM” by selling its shares and passing on the proceeds to taxpayers.
At the time of the crisis, in fall of 2008, economists and advisers to then-President George W. Bush said liquidation would be the likely outcome of private bankruptcy proceedings because the frozen credit market meant the companies could not get loans to carry them through restructuring.