Speaking Monday on "CBS This Morning," General Motors CEO Dan Akerson said that presumptive GOP presidential nominee Mitt Romney's stance against the auto bailout was "short-sighted," contrasting Romney's position with the "wisdom" of the Republican and Democratic administrations that aided the auto industry.
Asked by Charlie Rose if GM would have survived without the bailout, Akerson said, "I don’t believe so, for one simple fact: There was no risk capital at the depths of the Great Recession that would have been put into what was viewed as a pretty risky investment at the time."
Romney opposed government intervention as the auto industry foundered in 2008, going so far as to pen an op-ed piece for The New York Times entitled "Let Detroit Go Bankrupt." Now that the industry has been revitalized, Romney has found himself needing to defend his anti-bailout position, arguing that he merely wanted the auto makers to go through the managed bankruptcy process that they ultimately went through.
But as Akerson and others have pointed out, GM likely never would have made it through managed bankruptcy without government intervention, since so few lenders in the private sector would have been willing to extend capital at the time. The bailout was started under President George W. Bush in December 2008 and expanded under President Barack Obama.
In his Times piece, Romney wrote, "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."
Akerson said that such a position would have hurt the broader economy.
"When you step back and look at the bailout, there were two separate presidents, President Bush and President Obama, two treasury secretaries, two administrations that saw the wisdom of how important this industry was to America and its economy," Akerson said. "We comprise, the auto industry, three to three and a half percent of the total GDP of this country. To have essentially ceded the basic manufacturing infrastructure of this country and this industry, I think, would have been a very short-sighted decision."
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