Mitt Romney, former Massachusetts governor and candidate for this year’s presidential election makes excellent points in his opinion editorial “Let Detroit Go Bankrupt.” Romney just wrote what everyone else was thinking.
The Big 3 has been riding the wave of short term quarterly gains for investors and executives for years now and Mitt Romney pointed that out. So it is no surprise that the seed of mismanagement has grown into a flowering binder of red tape. Faced with the inability to meet financial obligations next month, GM is burning through more money per day than most people can grasp. The concept of letting Detroit go bankrupt is not a far fetched idea.
If the Big 3 goes bankrupt and files Chapter 11 protection, then that will be better than the federal government bailing them out of a mess they created. Chapter 11 will allow the Big 3 to restructure themselves and their management processes. New ideas, technologically innovative ones need to find their way into the Big 3. As Mitt Romney wrote, “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.”
That last line Mitt Romney writes, “…Detroit needs a turnaround, not a check,” is so profound. It is similar to a life lesson I give my daughter frequently, “you need to change your life, not my money.” The Big 3 will not be able to save itself with a big check from the federal government, but they will save themselves if they have to work it out from bankruptcy.
(you can read Mitt Romney's entire Op-Ed for the NYTimes by clicking here.)
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