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.
By: This article originally appeared in The New York Times on November 18, 2008, written by none other than Op-Ed Contributor, Willard Mitt Romney, a current candidate for the GOP Republican Presidential Nomination
My email inbox has been flooded over the last three days with messages of outrage over Susan G. Komen for the Cure’s surprise metamorphosis into a purveyor of right-wing culture wars – a change that the organization is now frantically trying to undo. Americans have been shaken by the news of a formerly respected and loved organization with a trusted brand turning on many of the low-income women who it had previously taken pride in serving.
I too am angry at Komen’s decision to put right-wing ideology ahead of its purported public health mission. But our deeper anger should be directed at someone else: the Republicans in Congress and GOP leaders who consistently make the same choices involving many times more money, and many times more women’s lives. The shock of the revelation of Komen’s new policies only highlighted how numb many of us have become to the larger, unrelenting attacks on women’s health by right-wing elected officials.
The grants to Planned Parenthood that Komen would have severed totaled $680,000 over the last year – a total that the organization thankfully made up in two days from contributions that have poured in in response to the Komen betrayal. Let’s put that in perspective. Last year, the House GOP voted to zero out the entire $317,000,000 Title X family planning budget – including about $75 million that would have gone to Planned Parenthood’s preventative care and treatment programs for low-income women.
Deciding that this plan wasn’t disastrous enough, the House also passed an amendment to eliminate all federal funding to Planned Parenthood, an estimated total of $363 million, much of which goes to care for the Medicaid patients who make up almost half of Planned Parenthood’s clientele. The amount that Komen would have cut from Planned Parenthood’s women’s healthcare was significant– but the amount that House Republicans were prepared to cut was 500 times larger.
The right wing understands this. Anti-choice groups have rejoiced over the Komen decision, seeing it as a stepping stone to what has always been their ultimate goal: eliminating women’s reproductive rights and destroying Planned Parenthood along the way.
Those who value comprehensive women’s health care need to make the same connection. What Komen did was wrong. What the Republican Party tries to do every chance it gets is hundreds of times worse.
I doubt that Mitt Romney will dare to take a stand on the Komen controversy. But it doesn’t matter. We know where he is on this issue — and not just because we know how he feels about poor people. Last year, Romney supported the amendment that would have eliminated 500 times as much money from Planned Parenthood’s health care services, cutting off a million and half of its most needy patients. So did Newt Gingrich. So did every other major GOP presidential candidate. So did all but seven House Republicans.
The Komen decision was shocking to so many because, in part, we expect more integrity from a nonpartisan women’s health organization than we do from our politicians.
But the stakes from our politicians are bigger. Planned Parenthood provides critical services to millions of American women each year. In 2010, it provided nearly 750,000 breast exams and 770,000 Pap tests to women seeking critical cancer screening. It provided more than four million tests and treatments for STIs. It provided affordable contraception to low-income women, preventing an estimated 584,00 unintended pregnancies. Planned Parenthood estimates that one in five American women has received care from the organization in her lifetime.
Without Komen’s funding, Planned Parenthood would have rallied. Without federal funding, nearly half of its 3 million patients – including many from disadvantaged neighborhoods and rural areas – would lose their care.
Yes, we should be angry at Komen for the Cure. But, like the Right, we need to recognize that this is ultimately a symbolic fight in a much bigger battle.
Today, Komen gave in to the overwhelming response it received from Americans who value women’s health over partisan politics. Our elected officials should face just as much pressure. Take the email you sent to Komen and copy Mitt Romney, Newt Gingrich, John Boehner and Mitch McConnell. They need to hear the same message, and face the same backlash, five hundred times over.
By: Michael B. Keegan, President-People for the American Way, Published in The Huffington Post, February 3, 2012
In 1989, Bain Capital purchased controlling interest in Damon Corp., a medical testing company located in Needham, Massachusetts.
During the time that Bain held its ownership of the company, Mitt Romney personally sat on the Board of Directors. And during that same period, Damon Corp. was busy submitting fraudulent reimbursement claims to Medicare to the tune of millions of dollars charged for unnecessary blood tests.
According to federal government prosecutors, Damon was misleading physicians into ordering unnecessary blood tests, assuring the doctors that the testing would be covered by Medicare.
By the time Damon Corp. pleaded guilty to defrauding the United States Government of $25 million—and paid a total of $119 million in what was, at that time, the largest penalty of its kind in Massachusetts history—Bain was long gone having sold the company in 1993 to Corning, Inc.
Inasmuch as neither Romney nor Bain was ever implicated in the fraud, it would be reasonable to conclude that while the illegal activity was going on under Mr. Romney’s nose, Romney would, himself, bear only some responsibility for perhaps not being as on top of things as one might hope for a company’s director to be.
But, according to Romney, such a conclusion would be wrong.
When Mitt Romney was confronted with the matter during his campaign to become the Governor of Massachusetts, Romney acknowledged that he did have some awareness of the funky things going on at Damon.
According to The Deseret News–
More than a decade later, when Romney was in pursuit of the Massachusetts governorship, his Democratic opponent Shannon O’Brien accused him of lax oversight at Damon and failing to report the fraud.
Romney replied that he had helped uncover the illegal activity at Damon, asking the board’s lawyers to investigate. As a result, he said, the board took “corrective action” before selling the company in 1993 to Corning Inc.
So, then, the future Governor and candidate for his party’s nomination to run for the presidency, did fulfill his obligation as a great American and did report the fraud to the proper authorities, right?
According to the court records, “…the Damon executives’ scheme continued throughout Bain’s ownership, and prosecutors credited Corning, not Romney, with cleaning up the situation.”
But there is an explanation – it turns out that the Damon experience was a foreshadowing of the Mitt Romney to come as he engaged in one of his now infamous episodes of flip-flopping.
You see, before Romney indicated that he was involved in conducting an investigation while he was on the board of directors, he said that he was completely unaware of any investigation.
Here’s another shocker. While the company eventually went bankrupt, with thousands losing their jobs, Bain Capital walked away with a $12 million profit—a little over $400,000 of that money ending up in Mitt’s pocket.
Expect to hear a lot more about this in the coming days as AFSCME has spent close to one million dollars in advertising buys throughout the state of Florida to highlight this misadventure.
By: Rick Ungar, Contributing Writer, Forbes, (Originally published, January 21, 2012).
Hard as I try, I can only conjure up two words to describe the decision on the part of Susan G. Komen For The Cure to pull its support of Planned Parenthood.
For years, Komen and Planned Parenthood have worked together to improve the opportunities for women to discover and get treatment for one of the most insidious of diseases—women’s breast cancer. And they’ve made a great pair. Together, these organizations have done an enormous amount of good when it comes to bringing the illness to the public’s attention and providing the services that have, undoubtedly, saved a great many lives.
Today, this partnership has been torn apart and, contrary to what one might have anticipated just twenty-four hours ago, it is not Planned Parenthood who finds itself struggling to make up the lost funding. The organization has benefitted from a massive inpouring of contributions since the news broke.
Rather, a review of the Susan G.Komen Facebook page makes it all too clear that their own organization is likely in line for a very bad year on the fundraising front given the large number of people who are deeply offended and distressed by the decision and have sworn to cut off their contributions to the group.
While it is tempting to say that the ‘good guy’ in this sad tale has emerged victorious, nothing could be further from the truth.
You see, the big loser in this story will be future breast cancer victims who may not get the diagnostic services or treatment required to save their lives as a result of what is sure to be a drop in funding for the Komen effort.
That is a true tragedy and one that certainly never had to be.
Despite the severe backlash being heaped on Komen For The Cure by one-time supporters, the organization continues to argue that there was nothing political about its decision. But nobody is buying this because it’s simply too hard to swallow.
Komen is sticking to the story that they had no choice but to pull the funding once Republican Congressman Cliff Sterns, a long-time opponent of Planned Parenthood, began a Congressional investigation to determine if Planned Parenthood has violated the rules that prohibit them from spending taxpayer money on abortion services. The Komen group argues that their governing principles do not permit them to contribute money to any entity under Congressional investigation.
But stupid is as stupid does. And, as noted, Komen For The Cure has behaved with shocking stupidity.
If Komen believes that Planned Parenthood provides a valuable service to the women Komen seeks to help and believed that PP did so before the investigation commenced last fall, why in the world would they permit such a congressional investigation—and one that has no time limit and could drag on until Democrats return to power and take over the investigating committee—to interfere with something as important as helping women with breast cancer? At no time has Komen suggested that Planned Parenthood was failing to use the money provided by Komen for the intended purpose. Had this been their position, their decision would have made a great deal more sense.
Are Komen’s rules of operating more important than the very purpose of their existence? If they believed that Planned Parenthood played an important role in helping women with breast cancer before, why would they do anything to interfere with that work, let alone use an investigation into whether or not PP is misusing taxpayer money for abortions – not breast cancer services—as a reason to withdraw their aid?
What if Rep. Sterns’ investigation does turn up some instances of Planned Parenthood breaking the rules? Does this mean that the work they do in support of women with breast cancer no longer ‘counts’? Are women who are in danger of losing their lives suddenly not deserving of help because some others may have received an abortion with some taxpayer money?
Anyway you look at it, this is an illogical and remarkably (here’s that word again) stupid decision.
I understand that there are many people who vehemently oppose abortion and that this would lead them to have a big problem with Planned Parenthood for providing the same.
But these people claim that they are ‘right to lifers’, devout in their desire to protect life. This, once again, causes us to wonder why these folks would take so strong a position when it comes to the lives of the unborn yet are unwilling to take such a position on behalf of a woman who has walked on the planet for a few years already. I simply don’t understand why right to life organizations everywhere are not imploring Susan Komen For The Cure to reinstate the funding to Planned Parenthood so that lives of affected women can be saved – just as they want to save the lives of the unborn.
While Rep. Sterns has taken the time to deny any involvement with Komen’s decision, and I take him at his word, why has he not acknowledged that, while he may be seriously opposed to abortion services, he can still support the work of Planned Parenthood—and Komen’s contribution to that work—when it comes to helping women facing a deadly disease? It is, after all, saving lives that Congressman Sterns proclaims himself to be all about.
Shame on the Susan G. Komen For The Cure for forgetting their mission and the reason so many people have financially supported their efforts and walked so many miles in support. Shame on Congressman Sterns along with any other opponent of Planned Parenthood’s involvement in abortion who cannot see the sheer hypocrisy of hating PP for taking lives while remaining unwilling to stand up for the services of PP that save lives.
I can’t think of a better example of how far afield we have gone when a charity devoted to fighting cancer allows politics to become its guiding force.
By: Rick Ungar, Contributing Writer, Forbes, February 1, 2012
Now that Mitt Romney is well and truly inevitable, it is becoming imperative for conservatives to begin the arduous work of explaining why his Massachusetts health care plan is in no way similar to the evil, bureaucratic, freedom-destroying Obamacare monstrosity. Ann Coulter gives it a go, as do Yuval Levin and Ramesh Ponnuru in National Review.
The latter brush aside any purported similarities by quickly noting that “policy experts of various political stripes have claimed that Obamacare is essentially Romneycare taken national.” Right, one of those policy experts is Jonathan Gruber, the guy who designed Romney’s health care plan and then designed Obama’s. Let’s see what he has to say:
He credited Mitt Romney for not totally disavowing the Massachusetts bill during his presidential campaign, but said Romney’s attempt to distinguish between Obama’s bill and his own is disingenuous.
“The problem is there is no way to say that,” Gruber said. “Because they’re the same fucking bill. He just can’t have his cake and eat it too. Basically, you know, it’s the same bill. He can try to draw distinctions and stuff, but he’s just lying.
Any attempt to explain why Romneycare is so vastly different than Obamacare really ought to explain why the economist who designed both plans thinks they’re the same fucking bill.
Coulter, Levin, and Ponnuru all defend Romney by arguing that he was operating within the constraints of a distorted federal system. “There’s not much governors can do about the collectivist mess Congress has made of health care in this country,” writes Coulter. But of course Obama was also operating within the confines of a distorted system, including many interest groups and voters deeply resistant to change.
Levin and Ponnuru urge Romney to vigorously press the argument that his plan has no resemblance to Obama’s. Their advice centers on the one area of difference:
So what, then, should Governor Romney say, if he is the nominee and President Obama suggests that his health-care plan is modeled on the one the Republican enacted? Something, we suggest, like the following:
“Nice try. Your health-care plan, Mr. President, spends a trillion dollars on yet another uncontrollable federal entitlement program and on a massive expansion of a failing Medicaid system. It has an unconstitutional rationing board cut hundreds of billions from Medicare without being answerable to the public, without giving seniors more options, and without using the money to shore up the program or reduce the deficit. It raises hundreds of billions in taxes on employment, investment, and medical research; and after all of that, it wouldn’t even reduce the growth of health-care costs, which is the heart of the problem. And your defense of all that is that it was based on a state program that doesn’t actually do any of those things?
But that is what Romney is already saying, right down to the “nice try.” And what it’s saying, basically, is that Obama was fiscally responsible. Romney, owing to a quirk of federal funding, was able to finance his plan with a windfall grant from Washington, meaning he didn’t need to come up with any painful cuts to cover his insurance expansions. Obama raised taxes and found inefficient spending within the Medicare system to finance covering the uninsured. And one of the biggest elements of his tax increase was a reduction in the tax deduction for expensive private plans – basically, the strongest version Obama could get through Congress of a staple idea urged by conservatives, which is to eliminate the tax code’s favoritism for employer-sponsored insurance.
Now, you could argue that this should go even further, and I’d agree. If you had Republicans willing to continue advocating the health care principles they used to advocate before Obama tried to implement them, you could form a stronger political coalition for tearing up the status quo and combining market pressure with universal coverage. But rational reform is pretty hard when the opposition party is able to convince itself that anything you do, including things they favored just the other day, are the death of freedom.
By: Jonathan Chait, Daily Intel, February 2, 2012