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Romney would have “let Detroit go bankrupt”

November 09, 2011 at 9:00 P.M.

Tonight, Mitt Romney said, “I care about this state and auto industry like no one else on this stage.” But Romney should explain to voters why, when the jobs of 1.4 million American workers were on the line, he turned his back on them.  Romney opposed the loan the President extended to the auto industry and instead proposed “letting Detroit go bankrupt” in an op-ed in the New York Times. And earlier this year in Detroit, Romney said that the President was "out of touch" for encouraging young people for pursuing manufacturing jobs. But this should come as no surprise - he's been turning his back on workers and middle-class families throughout his career.  

REALITY: GM & CHRYSLER FACED LIQUIDATION WITHOUT GOVERNMENT ACTION, CAUSING MASSIVE JOB LOSS AND ECONOMIC DAMAGE

The Congressional Oversight Panel For TARP Said That GM & Chrysler “Faced Bankruptcy And Probable Liquidation” In December Of 2008. “By the beginning of December 2008, GM and Chrysler could no longer secure the credit they needed to conduct their day-to-day operations. The CEOs of Chrysler and GM appeared before Congress and appealed for government assistance to help them remain in business, but they were unable to muster sufficient congressional support to get a rescue bill through the Senate.  Unless they could raise billions of dollars in new financing from private investors, they faced bankruptcy and probable liquidation.” [COP January Oversight Report, 1/13/11]  

Mark Zandi Of Moody’s Analytics: “Without Any Government Help, The Big Three Will Quickly End Up In Bankruptcy And Be Effectively Liquidated, Resulting In Hundreds Of Thousands Of Layoffs At Just The Wrong Time.” “Without any government help, the Big Three will quickly end up in bankruptcy and be effectively liquidated, resulting in hundreds of thousands of layoffs at just the wrong time. They would file for Chapter 11, a restructuring, but it would likely turn into a Chapter 7 liquidation. Their factories and other operations would be shut down and their assets sold to pay creditors. Given the collapse in the financial system and resulting credit crunch, debtor in possession, or DIP, financing would be all but impossible to get.” [Chief Economist Mark Zandi Of Moody Analytics, Testimony To U.S. Senate Banking Committee, 12/4/2008]  

CEO Of Ford Motor Company: “If GM And Chrysler Had Gone Into Freefall Bankruptcy” They Would Have “Taken The Industry Down Plus Maybe Turned The U.S. Recession Into A Depression.” “The government’s intervention was absolutely key to helping create a chance for GM and Chrysler going forward. That’s why I testified on behalf of GM and Chrysler, as you know. The reason we did was that we believed—like two presidents [Bush and Obama]—that if GM and Chrysler would have gone into freefall bankruptcy, they would have taken the supply base down and taken the industry down plus maybe turned the U.S. recession into a depression.” [CEO Of Ford Motor Company  Alan Mullaly, 10/16/2010]  

 

Center For Automotive Research Chairman: “The Whole [Auto] Industry Was At The Edge Of Collapse” And “Had That Occurred It Would Have Taken The Economy Very Likely Into A Depression” So Romney’s Opposition To The Auto Bailout Shows He “Didn’t Understand The Circumstances.”  “Asked about that statement, David Cole, the chairman of the Ann Arbor-based Center for Automotive Research, said, ‘The whole industry was at the edge of collapse. This was before the bankruptcy. Had that occurred, it would have taken the economy very likely into a depression.’ Cole added of Romney: ‘He sounds like most of the people from Washington. They really didn’t understand the circumstances. They talk without knowledge. I would vote for him, but he is off base. He doesn’t understand the details here.’” [Detroit News, 2/24/10]  

Fiat-Chrysler Head Said Romney Must Have Been “Smoking Illegal Material” When He Argued The US Auto Industry Could Have Been Resurrected Without Federal Assistance. “The head of Fiat-Chrysler said today that Republican presidential contender Mitt Romney must have been ‘smoking illegal material’ when he argued in 2008 that the US auto industry could be resurrected without federal financial assistance.” [Boston Globe, 6/3/11]  

Fiat-Chrysler CEO Sergio Marchionne Attacked Romney’s “Managed Bankruptcy” Without Federal Assistance Theory Saying “The Government Stepped In, As The Actor Of Last Resort. It Had To Do It Because The Consequences Would Have Been Just Too Large To Deal With.”  “During an interview with CNN, Sergio Marchionne, chief executive of Fiat and Chrysler, said government support was pivotal. The comment contrasted with a 2008 op-ed column in which Romney urged the federal government not to provide an industry bailout but instead force automakers into a ‘managed bankruptcy.’ Marchionne told CNN: ‘Whoever told you that is smoking illegal material. That market had become absolutely dysfunctional in 2008 and 2009. There were attempts made by a variety of people to find strategic alliances with other car makers on a global scale and the government stepped in, as the actor of last resort. It had to do it because the consequences would have been just too large to deal with.’” [Boston Globe, 6/3/11]  

The Economist Said That Without The Auto Rescue “It Is More Likely GM Would Have Been Liquidated, Sending A Cascade Of Destruction Through The Supply Chain…” “Had the government not stepped in, GM might have restructured under normal bankruptcy procedures, without putting public money at risk. Many observers think this unlikely, however. Given the panic that gripped private purse-strings last year, it is more likely that GM would have been liquidated, sending a cascade of destruction through the supply chain on which its rivals, too, depended.” [The Economist, 8/19/2010]  

The Center For Automotive Research Said “Loans And Other Financial Assistance Provided To General Motors And Chrysler…Averted Certain Economic Catastrophe Had The Companies Been Allowed To Fail.” “Across the globe, federal, state and provincial governments stepped in to provide aid to the Detroit-based automakers with operations in their countries. These loans and other financial assistance provided to General Motors and Chrysler by the U.S. and foreign governments averted certain economic catastrophe had the companies been allowed to fail.” [Center For Automotive Research, 12/17/2010]  

Center For Automotive Research: “Providing Government Assistance To General Motors And Chrysler Through Quick And Structured Bankruptcy Proceedings Avoided The Worst Case Scenario.” [Center For Automotive Research, 12/17/2010]   

The Center For Automotive Research: The Auto Industry Rescue Saved More Than 1.4 Million Jobs, Including 1.14 Million Jobs In 2009 And 314,400 Jobs In 2010. [Wall Street Journal, 11/17/10]  

The Center For Automotive Research Reported That If The Auto Industry Had Undergone An Unstructured, Disruptive Bankruptcy, Michigan Would Have Lost Over 337,000 Jobs Reliant On The Auto Industry In 2009 And 2010. [CAR Automaker Bankruptcies Report, 5/26/09]  

CNN: “Doing Nothing” For GM Chrysler “Could Have Cost More Than Twice As Much” As The Auto Rescue, Which Prevented More Than $28 Billion In Lost Tax Revenues And Assistance To The Unemployed. “Saying the U.S. taxpayer "lost money" is probably the wrong perspective, considering that spending no money at all likely would have meant a financial catastrophe for millions of Americans far in excess of a mere $14 billion. Had GM and Chrysler collapsed, it would have cost the federal government about $28.6 billion in lost tax revenues and assistance to the unemployed in just the first two years alone, according to the Michigan-based Center for Automotive Research. In other words, doing nothing could have cost more than twice as much the bailout.” [CNNMoney, 7/22/11]

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