Archive for March, 2009
Last November Mitt Romney wrote an Op-Ed that struck a cord with analysts around the country. He said THEN that Detroit should be allowed to go bankrupt, and to bring in new proven leaders - NOT from inside the auto industry. In typical Romney form, Mitt called for innovation and accountability! See the entire Op-Ed here.
Let Detroit Go Bankrupt
November 19, 2008
By MITT ROMNEY
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.
This week Pres. Obama has placed the VP and CEO of GM as the Chairman. Doesn’t sound like “change” or innovation to me. Mitt goes on to call for accountability of Management:
….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.”
Mitt Romney also shares how in his father’s day, management saw trouble and cut costs. Sacrifice for the greater good…
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.
And, finally, Mitt Romney shares that it’s important to recognize government’s role in advocating for research to improve industry. Not that the government should RUN industries…
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.
But today I am excited to mention that I will be on CNN tomorrow! I have been asked to offer the average American response to Pres Obama’s press conference.
How exciting! They are sending a car for me in the AM and everything! I will be on around 10:30 am EST!
***Update - It was a really great experience to be on the CNN morning program. I was on a panel with 2 Democrats who are also small business owners. They asked questions about the status of our businesses and how we are making it through this tough economic time. I was able to report that, as a bookkeeper, my business is booming! All of my clients are also small businesses. My business is in such demand that last September I added a partner, even. The last three months have been the best months I have ever had. (One of the producers told me the Dow went up 30 points during my portion! haha)
Then I let them know that my husband is in construction and cannot find work right now (where are those “shovel ready jobs, Obama?!). He’s been trying to get his grading business off the ground, but with homeowners that cannot get improvement loans, he will need to go back to work. But there are no jobs right now.
Then the other panel members gushed about HOPE and this is “My President!”
I remarked that I was disappointed that in last night’s press conference Pres Obama never mentioned the middle class tax cuts he campaigned on. That, in fact, he was asked if his tax cuts would be included in the budget and he replied that he had yet to see the provisions in the budget. So I said to the panel that I wanted to hear that Pres Obama is fighting for us like he promised! WHY isn’t he making SURE these middle class tax cuts are included?!
Anyway, the last question Heidi Collins asked us is if we will be patient and I just said that I am working! I am also working to further Conservative efforts in my local area.
Oops - didn’t get Mitt in there! I was nervous! ***
***Another Update - I received this from a friend…
I knew one of my brothers would be able to tune in so I emailed him last night and told him to watch around 10:30.
Here is his response: “Heather did good. The 2 other people were Obama supporters. Heather works for her money the other 2 want Obama to help them. Ha!!”
How funny is that? And, sadly so true!***
Here’s a pic of me talking Mitt’s ear off - about 3 days from delivering my fourth child!
Don’t miss Mitt Romney discussing the economy with Larry King tonight!
Thurs, 3/19 at 9:30 EST
AIG, Bain, and Financial Pain [Mitt Romney]
The news that employees at AIG are on the verge of being rewarded $165 million in bonuses at a time when the insurance giant is on the verge of collapse is rightly shocking to taxpayers who have pumped billions into the company to keep it afloat. Of course, the Obama administration was wrong to initially defend the bonuses as contractually obligated. In 1990, I was asked to assume the CEO position at the management consulting firm Bain & Co., then in acute financial distress. The need to restructure was paramount or else the company would fail, leaving 1,000 employees without a job. We renegotiated debt with bankers. We rewrote leases with landlords. We designed a whole new governing system. We also had to convince the founding partners to turn back profits they had already taken out of the company. Of course, we had no legal basis for making such a request, but without a shared sacrifice we couldn’t keep the company alive. Generously, the founders returned the money, putting us on a path to stabilizing the firm and turning it over to new leadership. It’s difficult to understand why the same lesson about shared sacrifice is lost on AIG’s executive team and their government overseers.
Prepare to be shocked, as the Boston Globe has written a relatively (operative word here) sensible and positive piece about Mitt! And, quite honestly, I have noticed a general shift in the tone of news reports on him. I feel the past few years of campaigning have been a valuable experience for Mitt Romney and his supporters. So many rumors and myths dispelled. From The Globe:
…with a more statesmanlike bearing and some measured criticisms of the Obama administration, Romney suddenly seems like the only adult left standing among the 2012 Republican presidential hopefuls.
The article attempts to drag out the last months of the 2008 campaign, but I think none of us care about that. We know that Mitt Romney worked diligently through his Free and Strong America PAC to campaign for Republicans all over the country - not just McCain. Which is more than some former Presidential Republican candidates can say.
Looking to the future, this report points out the obvious - that this country is still looking to Mitt Romney for guidance during this economic crisis:
…the focus on economic issues that followed the campaign actually played to Romney’s strengths. The former head of a private-equity firm, Romney has been one of the few Republicans to go beyond anti-pork rhetoric and talk in depth about economic issues.
Like the title of this post suggests, somebody just might be on the chopping block over at the Globe. I hope not - we need folks who are actually paying attention and report in a fair and balanced manner. In our current day where newspaper agencies are on their way out, they should consider that being fair and balanced just might save them.
I hear many folks asking the question - what would Mitt have done about America’s economic crisis?
There are many reasons why Americans are asking this about him. Take a look at the past successes of Mitt Romney and why he’s that man with the plan!
Governor Romney is a leader that brings many talents to the table. None of the current presidential candidates can touch the Governor’s corporate experience and leadership. He is known for stepping out of the box with innovative ideas and energizing concepts. His touch is like gold and he has made many companies successful. Here is a segment from his Wiki entry:
Mitt Romney Wikipedia Entry
After graduating from Harvard, Romney went to work for the The Boston Consulting Group, where he had interned during the summer of 1974. From 1978 to 1984, Romney was a vice president of Bain & Company, Inc., another Boston-based management consulting firm. In 1984, Romney left Bain & Company to co-found a Bain & Company spin-off private equity investment firm called Bain Capital. During the 14 years he headed the company, Bain Capital’s average annual internal rate of return on realized investments was 113 percent, making money primarily through leveraged buyouts. He invested in or bought many well-known companies such as Staples, Brookstone, Domino’s, Sealy Corporation and The Sports Authority.
In 1990, Romney was asked to return to Bain & Company, which was facing financial collapse. As CEO, Romney managed an effort to restructure the firm’s employee stock-ownership plan, real-estate deals and bank loans, while increasing fiscal transparency. Within a year, he had led Bain & Company through a highly successful turnaround and returned the firm to profitability without layoffs or partner defections.
CEO of the Salt Lake Organizing Committee
Romney served as president and CEO of the 2002 Olympic Winter Games held in Salt Lake City. In 1999, the event was running $379 million short of its revenue benchmarks. Plans were being made to scale back the games in order to compensate for the fiscal crisis. The Games were also damaged by allegations of bribery involving top officials, including then Salt Lake Olympic Committee (SLOC) President and CEO Frank Joklik. Joklik and SLOC vice president Dave Johnson were forced to resign.
On February 11, 1999, Romney was hired as the new president and CEO of the Salt Lake Organizing Committee. Romney revamped the organization’s leadership and policies, reduced budgets and boosted fundraising. He also worked to ensure the safety of the Games following the terrorist attacks of September 11, 2001 by coordinating a $300 million security budget. Despite the initial fiscal shortfall, the Games ended up clearing a profit of $100 million, not counting the $224.5 million in security costs contributed by outside sources.
Last week, Governor Romney talked about his economic vision for America. This is truly impressive and I challenge any other candidate to come up with a plausible, comprehensive, CONSERVATIVE plan. The Associated Press wrote this about Romney’s plan:
Republican Mitt Romney says Washington must act to open more foreign markets to American products, and he wants the president to have new authority to negotiate such agreements.
The Republican presidential candidate proposes what he calls a “Reagan Zone of Economic Freedom” that would include U.S. free-trade partners such as Europe who commit to opening up markets and “playing by the rules.” Such an alliance could operate inside and outside the World Trade Organization to push for trade agreements as well as labor, environmental and other reforms.
“Governor Romney would seek to expand these efforts to include the European Union and other nations that agree to meet these standards, while challenging China and others advancing agreements that exclude America,” the plan says.
In it, Romney, who amassed a vast personal fortune as a venture capitalist, says a president who is going to expand the economy through new trade agreements needs his kind of experience. He also calls on Americans to “reject the Democrats’ policies of retreat from the world.”
“Denying America the ability to negotiate to open markets while our competitors gain advantages is no strategy,” the proposal says.