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Detroit Counterpoint


On Monday, Cliff Kuang wrote a reasoned plea in favor of a government-sponsored bailout for automakers in Detroit. Today, just for the sake of entertaining the other side of the argument, we'd like to link to a counterpoint penned by the former Massachusetts governor (and GOP presidential candidate) Mitt Romney. He references his father's work at American Motors, a company that was only able to make strides toward success after the total collapse of its stock. The takeaway seems to be that only through hitting bottom will automakers be able to bounce back up. Some excerpts: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.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.Link.Photo via this Washington Times article on a once dramatic GOP nomination race.
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