Behind Dems’ dishonesty on auto bailout, disaster awaits

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Behind Dems’ dishonesty on auto bailout, disaster awaits

(CCU Faculty) On the last night of the Democratic Convention, former Michigan Governor Jennifer Granholm gave an exuberant speech attacking Republican candidate Romney for not caring about America’s workers, and praising President Obama for supposedly saving the American auto industry. You can watch it on youtube:

Towards the end of my time as governor, Ford closed one of its biggest factories, a factory in Wixom, Michigan. The Wixom plant had employed thousands of middle-class men and women… When the financial crisis hit, things got a lot worse — and fast. The entire auto industry, and the lives of over 1 million hard-working Americans, teetered on the edge of collapse; and with it, the whole manufacturing sector. We looked everywhere for help. Almost nobody had the guts to help us — not the banks, not the private investors and not Bain capital.

Why didn’t banks and private investors “have the guts to help”? Because it was a bad investment. American automobile manufacturers were going bankrupt due to excessive costs brought on by the unions. There has been much debate what autoworkers are paid, but “The Big Three really does spend about $73 on compensation” per worker per hour on wages, benefits, and retirement. However, nonunionized Americans who assemble Hondas and Toyotas in the mid-west and southern states “make in the neighborhood of $45 an hour.” (New York Times, December 2008).

Governor Romney doesn’t want the American Auto Industry to shut their doors, only to file for bankruptcy so that they would be able to renegotiate labor contracts. Governor Granholm, however, didn’t mention that. Instead she sang the praises of Barack Obama:

Then, in 2009, the cavalry arrived: our new president, Barack Obama! … With the auto rescue, he saved more than 1 million middle-class jobs all across America. …in the great state of Michigan President Obama helped save 211,000 good American jobs. All across America, autos are back! Manufacturing is rebounding! Why? Because when Mitt Romney said “Let Detroit go bankrupt,” who took the wheel? Barack Obama! When America was losing 750,000 jobs per month, who gave us a lift? Barack Obama! When American markets broke down, who jump-started the engine? Barack Obama! And when America needed it most, who got us rolling again on the road to recovery? Barack Obama!

Actually, Romney wanted to make those companies profitable again, but Granholm claimed in her speech that Romney made his fortune “at the expense of middle-class Americans” putting “profit before people.” In the real world companies that don’t make a profit go broke, unless a shrewd investor turns it around by making it efficient, which is Mitt Romney’s specialty. Instead Barack Obama took taxpayer’s money and poured it into unprofitable companies, perpetuating inefficiency, and passing the cost on to you and me. The problem hasn’t been solved only postponed. In the end not only may the auto industry go broke, but it could also bring down the entire American economy.

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