Originally appeared in The Detroit News.
At its recent “analyst day,” General Motors laid out an encouraging vision for the future, a presentation that was warmly received by Wall Street.
That such a session would be occurring at all was certainly in doubt in 2008 and 2009 when General Motors (and much of the auto sector) teetered on the precipice of insolvency and, potentially, shut down.
That’s part of why the current Senate contest between Gary Peters and Terri Lynn Land is so important: If Land’s clearly expressed 2012 view had prevailed, GM would likely have disappeared.
“I’m with him on that,” Land said that August, referring to her support for presidential candidate Mitt Romney’s position on the auto rescue.
The Romney stance would have surely been disastrous for GM, the auto industry and Michigan because Romney opposed any federal financial assistance for GM and Chrysler to help them through the bankruptcy process.
As the headline of Romney’s famous New York Times op-ed article said, his view was to “Let Detroit Go Bankrupt.”
The problem with that approach is that in late 2008 and early 2009, when the two automakers were running out of cash, an uncontrolled bankruptcy of either company would have ended only one way: with liquidation.
Auto suppliers would have collapsed and closed down. Dependent on the supply network, Ford would have temporarily ceased production.
Don’t take my word for it. In 2011, a bipartisan congressional oversight panel concluded that the self-help notion that Romney and Land advocated “did not appear to be an option by late fall 2008, leaving liquidation of the firms as the more likely course of action absent a government rescue.”
Fortunately, President George W. Bush, President Barack Obama and courageous legislators saw it differently. They were willing to buck public opinion that hated bailouts.
Gary Peters was one of those courageous legislators. He consistently pressed Washington for a sensible rescue plan, and just as vigorously pressed the auto companies to maximize their production in America.
So today General Motors, Chrysler and the entire automotive chain is thriving. More than 485,000 jobs in the auto industry have been added since the nadir in 2009. Unemployment in Michigan, which was the highest in the nation five years ago, has dropped to 7.4 percent.
Not only did Land absurdly insist that GM and Chrysler could have gotten loans or investments from the private sector, she also said that GM has become “general government” (whatever that means) with nobody that has the kind of commitment that Bill Ford has to making his eponymous company successful.
Tell that to Ed Whitacre and Dan Akerson, the two chief executive officers who so successfully led General Motors during the early years of its post-bankruptcy life.
Tell that to those who followed me with responsibility for the program in Washington. They successfully wound down the auto rescue investments and left a highly profitable industry behind.
Yes, some money was lost, but with more than a million jobs arguably saved, the auto rescue amounted to one of the most effective government programs in modern history.
So I’ll offer Land the same challenge that I made to Romney: Produce one, just one, credible financial institution that was willing to lend or invest in these companies in the spring of 2009 and I’ll apologize humbly.