“Son Of Detroit”: Mitt Romney Overplayed His Hand In Michigan
In the campaign world, it’s almost a cardinal rule: Undersell your chances, then overdeliver at the ballot box. Former Gov. Mitt Romney never got the memo on this, and he might well pay a severe price for this misstep in next week’s Michigan primary.
After squeaking by in the disputed Maine nominating contest and getting clocked by Santorum in Missouri, Minnesota, and Colorado before that, Romney’s veneer of invincibility was gone and his campaign was left to deal with a harder question: Could he lose his home state of Michigan?
True, Romney was born in Michigan, where his father was a prominent auto executive and later governor. But Mitt Romney is more identified with Massachusetts, where he served as governor, or even with Mormon (like him) Utah, where he rescued the 2002 Winter Olympics.
He could’ve had it both ways. He could’ve acknowledged his family’s deep connection to Michigan without declaring himself “a son of Detroit.” Expectations would’ve been lower, and the connection—for any benefit it may hold next Tuesday—would’ve been solidified.
But he used those exact words—son of Detroit—to describe himself in a widely circulated op-ed in The Detroit News.
This went over about as well as could be expected for the campaign that can’t seem to shoot straight in recent weeks. Poll numbers barely budged. Talk of losing the home state intensified—one Republican U.S. senator said, “If Romney cannot win Michigan, we need a new candidate.” And the campaign had to pull out the checkbook and again try to buy a primary by carpet-bombing the opponents with negative ads.
Then, in hardscrabble Michigan—home to shuttered factories, high unemployment, and one of the weakest state economies in the nation—Romney decided to unleash his secret weapon—Donald Trump. The Donald, who endorsed Romney after his own campaign flamed out, toured the state stumping for Romney and, no doubt, making deep connections with working-class or wish-they-were-working-class voters in the Wolverine State.
At that point, the Obama campaign no longer could resist joining in the fun. A super PAC associated with the president made its own huge ad buy to thwart Romney’s plan for a happy homecoming. It’s like the Fourth of July in Michigan right now—negative ad bombs going off in every direction.
And because Romney could not leave well enough alone, could not underpromise and overdeliver, and could not resist calling himself “a son of Detroit,” his campaign has spent the last two weeks trying to douse the political equivalent of a five-alarm fire.
Romney should’ve focused on Arizona all along. Its primary—the same day as Michigan’s—yields 29 delegates in a winner-take-all format. Michigan’s yields 30, awarded proportionally. If Romney hadn’t spent a dime on Michigan, he probably would’ve ended up with more delegates on the day than his current chief rival, former Sen. Rick Santorum. Santorum lags in the polls in Arizona and didn’t help himself with a poor debate performance in the state on Wednesday night.
Ironically, as we inch closer to the two primaries next Tuesday, Team Romney has begun to lower expectations in Michigan—to say the state is not, in fact, a must-win for his campaign. No kidding.
But the Romney camp could’ve saved itself a lot of money and a giant headache if it had started off trying to shape the narrative rather than becoming beholden to it.
By: Fred O’Connell, U. S. News and World report, February 24, 2012
“Drug-Addled Wrong”: Mitt Romney Condemns The Auto-Industry Rescue
Looking back over the last three years, there’s arguably no better example of a policy Republicans got wrong than the rescue of the American auto industry.
When President Obama launched his ambitious policy in 2009, he was taking a major gamble — not only with the backbone of American manufacturing, but with his presidency and its ability to use the power of government to repair a private industry facing collapse. As First Read noted at the time, “As the GM bailout goes, so goes the Obama presidency.”
We now know the gamble paid off. Chrysler has posted its first profit in 15 years; GM is building new American facilities; and plants are operating at a capacity unseen in a long while. General Motors went from the brink of total failure to reclaiming its spot as the world’s top automaker, and as the Wall Street Journal reported earlier this month, “The auto industry hasn’t just turned the corner. It’s starting to accelerate.”
Had it not been for the Obama administration’s policy, these heartening headlines would have been impossible. And yet, Mitt Romney still isn’t happy.
In a new Detroit News op-ed, the former Massachusetts governor says he’s glad the industry still exists, but proceeds to complain anyway about the way in which Obama rescued GM and Chrysler from an imminent collapse.
Three years ago, in the midst of an economic crisis, a newly elected President Barack Obama stepped in with a bailout for the auto industry. The indisputable good news is that Chrysler and General Motors are still in business. The equally indisputable bad news is that all the defects in President Obama’s management of the American economy are evident in what he did.
Instead of doing the right thing and standing up to union bosses, Obama rewarded them…. By the spring of 2009, instead of the free market doing what it does best, we got a major taste of crony capitalism, Obama-style.
It takes a fair amount of chutzpah to face a crisis, get it wrong, then whine about the way in which the other guy got it right.
This is a subject Romney would be better off ignoring. After all, in 2009, he famously urged policymakers to “let Detroit go bankrupt.” Romney was so certain Obama’s policy would fail, he said Americans could “kiss the American automotive industry goodbye” if Obama’s policy moved forward in 2009. Indeed, at the time, Romney called the administration’s plan “tragic” and “a very sad circumstance for this country.” He wrote an April 2009 piece in which he said Obama’s plan “would make GM the living dead.”
With the benefit of hindsight, we now know all of Romney’s warnings were wrong. For him to double down today on the virtues of letting Detroit go bankrupt is just bizarre.
I’m reminded of this clip, which Democrats gleefully put together last summer.
Of particular interest is the last quote in the clip, in which a Chrysler executive responded to a Romney quote by saying, “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.”
In other words, Romney wasn’t just wrong; he was drug-addled wrong.
To be sure, the former governor wasn’t the only Obama critic whose predictions now look foolish, but Romney is the one who still likes to pretend he was right.
Even the complaints themselves are strange. As Marcy Wheeler explained, Romney’s “basically complaining that the bailout preserved the healthcare a bunch of 55+ year old blue collar workers were promised. He’s pissed they got to keep their healthcare. He’s also complaining that banks took a haircut.”
I haven’t talked to the White House about this, but I suspect if 2012 comes down to a debate over who was right about the auto-industry rescue, Obama likes his chances.
By: Steve Benen, The Maddow Blog, February 14, 2012
“A Detroiter In His Own Mind”: Mitt Romney And The Automobile Industry
One of Mitt Romney’s problems is that he lays it on too thick. He’s not just a conservative, he’s a “severe conservative”. He feels your pain because he too is “unemployed”. And he understands America’s car industry because he’s a Tigers-cheering motorhead, a true “son of Detroit”.
That last assertion comes in an op-ed Mr Romney wrote for the Detroit News today. And it’s not untrue, per se. The candidate was born in Detroit, though he grew up in Bloomfield Hills, one of America’s wealthiest cities. He probably cheered for the Tigers as a kid, but his position has since evolved. And cars may really be “in my bones”, as he claims, but he advocated letting Detroit go bankrupt in 2008.
The purpose of Mr Romney’s op-ed is to clarify his position on the auto bail-out ahead of Michigan’s primary on February 28th. And the piece rivals Cirque du Soleil in its display of contortions. Mr Romney seems loth to gush about the success of the bail-out, noting only the good news that “Chrysler and General Motors are still in business”. He certainly doesn’t mention that 2011 was the best year for America’s carmakers since the financial crisis, with each of the big three turning a solid profit. But he does imply that this achievement is a result of his own advice. “The course I recommended was eventually followed”, Mr Romney writes.
As with much of Mr Romney’s excessive rhetoric, there is some truth to this statement. Following the bail-outs, the president eventually forced Chrysler and GM into bankruptcy, a step Mr Romney thought should occur naturally. And the government oversaw painful restructurings at both companies, which were largely in line with Mr Romney’s broad suggestions. But the course Mr Romney recommended in 2008 began with the government stepping back, and it is unlikely things would’ve turned out so well had this happened.
Free-marketeers that we are, The Economist agreed with Mr Romney at the time. But we later apologised for that position. “Had the government not stepped in, GM might have restructured under normal bankruptcy procedures, without putting public money at risk”, we said. But “given the panic that gripped private purse-strings…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.” Even Ford, which avoided bankruptcy, feared the industry would collapse if GM went down. At the time that seemed like a real possibility. The credit markets were bone-dry, making the privately financed bankruptcy that Mr Romney favoured improbable. He conveniently ignores this bit of history in claiming to have been right all along.
In other areas of his op-ed Mr Romney is more accurate. Unions did win some special favours in the bail-out deals, though they are not as egregious as the candidate claims. For example, a health fund for retired workers was unfairly favoured over secured bondholders at Chrysler. But an issue like that is unlikely to resonate in Detroit. So Mr Romney must find a way to re-write history, lest he fall further behind Rick Santorum in his state of birth. Mr Santorum didn’t support the auto bail-out either, but he evinces a genuine compassion for blue-collar workers. And he didn’t pen an op-ed predicting, “If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye.” That’s a difficult statement to walk back.
By: The Economist, Democracy in America, February 14, 2012
“Half-Time In America”: It Isn’t Political, It’s American
Many Republicans want President Obama to fail. That’s completely understandable and defensible, if one is talking about success or failure in his re-election campaign. It’s stunning when that’s extended to the performance of the economy as a whole or any of the nation’s job-supplying industries.
Thus we have uber-political operative Karl Rove complaining about how offended he was by a Super Bowl TV ad, sponsored by Chrysler, which extolled the recent resurrection of the nation’s auto industry. The ad featured tough-guy actor Clint Eastwood talking about the remarkable comeback of the auto industry, and underscoring the qualities which truly characterize the best of America—resilience, optimism, sacrifice, and hard work. The script of the commercial, “Halftime in America,” is as inspiring as any speech made by an actor in a movie or a political candidate in a campaign:
It’s halftime in America, too. People are out of work and they’re hurting. And they’re all wondering what they’re going to do to make a comeback. And we’re all scared, because this isn’t a game.
The people of Detroit know a little something about this. They almost lost everything. But we all pulled together, now Motor City is fighting again.
I’ve seen a lot of tough eras, a lot of downturns in my life. And, times when we didn’t understand each other. It seems like we’ve lost our heart at times. When the fog of division, discord, and blame made it hard to see what lies ahead.
But after those trials, we all rallied around what was right, and acted as one. Because that’s what we do. We find a way through tough times, and if we can’t find a way, then we’ll make one.
All that matters now is what’s ahead. How do we come from behind? How do we come together? And, how do we win?
Detroit’s showing us it can be done. And, what’s true about them is true about all of us.
This country can’t be knocked out with one punch. We get right back up again and when we do the world is going to hear the roar of our engines.
Yeah, it’s halftime America. And, our second half is about to begin.
Really, could anyone have a problem with that ad? It featured scenes of Detroit, and of middle-class people, working hard in a struggling economy and trying to make their city and their lives better.
Yes, Rove had a problem with it. He said he was “offended” by the spot, adding on Fox News:
I’m a huge fan of Clint Eastwood, I thought it was an extremely well-done ad, but it is a sign of what happens when you have Chicago-style politics, and the president of the United States and his political minions are, in essence, using our tax dollars to buy corporate advertising.
Rove seems to be referring to President Obama’s bailout of the auto industry, and suggesting that somehow that money was used to pay for a thinly-disguised campaign ad for the Obama re-election campaign. A lot of Republicans were opposed to the bailout, saying the companies should be subject to the rules of capitalism. GOP presidential contender Mitt Romney famously penned a New York Times op-ed entitled “Let Detroit Go Bankrupt.”
What is it about Detroit that so many conservatives despise? That it’s a still-breathing example of the “old economy?” Is it Motown music they hate, or the fact that it’s full of labor union members? Is the distaste for struggling Detroit so pronounced that people actually want the city to fail?
Had the auto companies indeed failed despite the bailout, Rove and Romney would have looked brilliant. But the companies are recovering nicely, paying back their loans (with interest), and making profits, in part because of concessions made by the labor unions so despised by conservatives.
There is surely a legitimate philosophical argument to be made that the government should not bailout out big businesses (an argument not often extended to include huge tax breaks for profitable industries). Pure capitalism indeed stipulates that businesses should succeed or fail on their own. Critics can legitimately argue that government should not prop up any industry, no matter what the implications for employment. They can be angry that the auto bailouts happened, but it’s unconscionable to be angry that the bailouts worked. Comebacks—as the New York Giants proved, winning the Super Bowl after an uneven season—are about as American as it gets.
By: Susan Milligan, U. S. News and World Report, February 7, 2012
“Let Detroit Go Bankrupt”: Mitt Romney In His Own Words
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
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