Former Massachusetts Governor: Detroit Should Go Bankrupt!
Romney says the US-based manufacturers would have to reorganize themselves in case the Government does not approve the $25 billion loan. Otherwise, all three companies will keep the same trend, which will do nothing more than to get them closer to bankruptcy, Romney said in an article posted in the New York Times.
“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,” he wrote.
In addition, Mitt Romney also mentioned a bunch of advises for US-based carmakers that could help them minimize loses and get out of the global recession while keeping their future safe.
“First, their huge disadvantage in costs relative to foreign brands must be eliminated,” he said, explaining that US companies should adopt similar market strategies to those used by European or Japanese companies which are usually based on reduced costs but with better results. This is actually one of the most important consequences of the crisis, more and more buyers turning their eyes to European cars which became popular for fuel economy combined with high engine performance, detrimental to American vehicles that are often criticized for their enormous fuel consumption.
“Second, management as is must go,” Romney added. “New faces should be recruited from unrelated industries — from companies widely respected for excellence in marketing, innovation, creativity and labor relations.”
But even so, Detroit 3 will likely get the $25 billion funding package as soon as late 2008, which could allow them reorganize the business straight from the beginning of the next year. Still, there is one major issue: the three giants need a fresh start and until now, no sign of such a thing.