Can You Trust Mitt Romney?

Let Detroit Go Bankrupt: Mitt Romney 2008

Should You Listen to Mitt Romney?

By MITT ROMNEY
Boston

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.

I love cars, American cars. I was born in Detroit, the son of an auto chief executive. In 1954, my dad, George Romney, was tapped to run American Motors when its president suddenly died. The company itself was on life support — banks were threatening to deal it a death blow. The stock collapsed. I watched Dad work to turn the company around — and years later at business school, they were still talking about it. From the lessons of that turnaround, and from my own experiences, I have several prescriptions for Detroit’s automakers.

First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.

That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon. Of course the Avalon feels like a better product — it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable.

Second, management as is must go. New faces should be recruited from unrelated industries — from companies widely respected for excellence in marketing, innovation, creativity and labor relations.

The new management must work with labor leaders to see that the enmity between labor and management comes to an end. This division is a holdover from the early years of the last century, when unions brought workers job security and better wages and benefits. But as Walter Reuther, the former head of the United Automobile Workers, said to my father, “Getting more and more pay for less and less work is a dead-end street.”

You don’t have to look far for industries with unions that went down that road. Companies in the 21st century cannot perpetuate the destructive labor relations of the 20th. This will mean a new direction for the U.A.W., profit sharing or stock grants to all employees and a change in Big Three management culture.

The need for collaboration will mean accepting sanity in salaries and perks. At American Motors, my dad cut his pay and that of his executive team, he bought stock in the company, and he went out to factories to talk to workers directly. Get rid of the planes, the executive dining rooms — all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat.

Investments must be made for the future. No more focus on quarterly earnings or the kind of short-term stock appreciation that means quick riches for executives with options. Manage with an eye on cash flow, balance sheets and long-term appreciation. Invest in truly competitive products and innovative technologies — especially fuel-saving designs — that may not arrive for years. Starving research and development is like eating the seed corn.

Just as important to the future of American carmakers is the sales force. When sales are down, you don’t want to lose the only people who can get them to grow. So don’t fire the best dealers, and don’t crush them with new financial or performance demands they can’t meet.

It is not wrong to ask for government help, but the automakers should come up with a win-win proposition. I believe the federal government should invest substantially more in basic research — on new energy sources, fuel-economy technology, materials science and the like — that will ultimately benefit the automotive industry, along with many others. I believe Washington should raise energy research spending to $20 billion a year, from the $4 billion that is spent today. The research could be done at universities, at research labs and even through public-private collaboration. The federal government should also rectify the imbedded tax penalties that favor foreign carmakers.

But don’t ask Washington to give shareholders and bondholders a free pass — they bet on management and they lost.

The American auto industry is vital to our national interest as an employer and as a hub for manufacturing. A managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs. The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk.

In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check.

Mitt Romney, the former governor of Massachusetts, was a candidate for this year’s Republican presidential nomination. 2008.

So Who Was Right? OBAMA!

Why Are Arizona Republicans So Intolerant

Arizona Governor Jan Brewer

Down in Arizona, governor Jan Brewer and Sheriff Joe Arpaio are doing everything possible to make the state a hell for the mainly Hispanic illegal alien population and gay couples. The supreme court's decision to strike down key parts of Arizona's immigration law that authorized state authorities to actively hunt for illegals has not deterred the immigrant loathing pair, but has given the governor some breathing space to look for more minority groups to target. And she has now chosen to go after the state's gay and lesbian population.

Governor Brewer, a Tea Party champion had worked earlier in her term with Republican legislators to deny benefits to same sex partners of state employees in 2009. A federal court had declared the move illegal, but that has only infuriated the governor who is bent on ensuring that same sex couples lose all health care and other benefits they get from their partners. In a move aimed at continuing her discriminatory policies against the states gay and lesbian population, she has appealed the federal court's decision to the US supreme court, essentially asking the supreme law interpreters of the land to join the tea party discrimination bandwagon against gays and other minorities.

Tea Party republicans frequently bring these agenda cases to the US supreme court which is currently dominated by Justices Like Antonin Scalia and Clarence Thomas who never vote against conservative causes, causing the court to be viewed by many as growing increasingly partisan, agenda driven and losing its neutrality.

On July 17th popular Hispanic hating Sheriff Joe Arpaio has vowed to release a bombshell document that proves once and for all that President Barack Obama was  born out of America and secretly smuggled into the country by his mother, who somehow foresaw that he will one day be president, and decided to keep his birthplace secret, so that she will not spoil his chances of one day leading the United States of America.
The question that comes to mind after hearing all what is going on in Arizona  is whether there are any sane people left in that state.

Tea Party Sheriff Arpaio
The Sheriff of Birthers