Friday, December 12, 2008

Romney: Bailout is not the solution


VAN SUSTEREN: I think, you know, most Americans, you know, do want to see the auto industry, you know, survive and (INAUDIBLE) because it has so much -- there's so many collateral effects to it, as well. No one wants to see people tossed out of jobs. The big question tonight is the House -- the House now has passed this bill. It's still got to go to the Senate. Are you in favor of giving or lending the auto industry $15 billion now, telling them to come back in January with a plan for restructuring, or do you think that this should first -- that this would be better off going to a bankruptcy court for restructuring?

ROMNEY: Well, the preference is to make sure that there is a restructuring because if you've got a $2,000 per car cost disadvantage, the American domestic manufacturers are not going to be able to compete either with the transplants -- those are the foreign guys who come and build factories here -- or with imports. And so you're going to have to see that restructuring.

If the car czar, which exists in the current bill -- and I haven't read the current bill, so I can't be too specific in that regard. But if that car czar doesn't have the authority to actually reduce the costs in the industry and make these companies competitive, then we will just be throwing good money after bad.

And the right thing to do here is to make sure that we do restructure these costs. That happens in bankruptcy. There are some down sides in bankruptcy, too. They could be alleviated by government participating in the process, either through a pre-packaged bankruptcy, they call it, where you agree to terms beforehand, go through bankruptcy to dot the I's and cross the T's. Or it could be done through a special piece of legislation, giving -- giving this car czar real authority.

We did that in our state, for instance. Our third largest city, Springfield, got in severe financial distress. The legislature and we worked together to put a control board in place. We gave support to the city, but we were able to open up the contracts, make them reasonable and save the institution.

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