View the trailer

The Hugh Hewitt Show

Listen 24/7 Live: Mon - Fri   6 - 9 AM Eastern
Call the Show 800-520-1234
European Voyage Cruise 2017 Advertisement

Mitt Romney explains why he’s against the Big 3 auto bailout, and where the Republicans go after the election

Wednesday, November 19, 2008

HH: Pleased to welcome back to the Hugh Hewitt Show Governor Mitt Romney. Governor, good to have you back, thank you for joining us.

MR: Thanks, Hugh, it’s good to be with you tonight.

HH: I want to start by talking about your New York Times op-ed today, Governor, Detroit Needs A Turnaround, Not A Check. I’m sure this has evoked quite a lot of reaction from your friends in Michigan. What are they saying to you today?

MR: Well, you know, I spoke to the Detroit Economic Club last January, and I said the same thing. I said no bailout, guys, a workout. And of course, folks in Detroit are not happy. I’ve got a lot of friends there. They’d rather see a check. But I really want to see this industry survive and grow and thrive, and I don’t think that’s going to happen if we just write them a check. We’ve got to help restructure the company, to get the excess labor cost and retiree cost out of those cars.

HH: Now I’ve linked your column in the New York Times at One of the things you write is that new labor agreements have to be signed to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota, and that includes retiree benefits being reduced. Do you see that as being something that retirees will willingly go for if they realize that which they’re left with is going to be secure as opposed to unsecure?

MR: You know, I think some would be willing to go on a voluntary basis. It may well be that a restructuring of this nature could be done with an out of court effort. It doesn’t have to necessarily be Chapter 11 bankruptcy. But it’s going to have to happen. It may well need the government to participate in some way to help these folks, because you don’t want to have a dramatic shift in people’s fortunes that have already retired. But what you can’t do is pretend that a car company that suffers $2,000 per car of cost disadvantage is going to be able to compete over the next twenty years with foreign companies that don’t have that disadvantage.

HH: Now in terms of $2,000 dollars per car, how much does that, what kind of a difference does that make in terms of, for example, when you say a Taurus versus an Avalon in your article?

MR: Well, you can think about the manufacturer’s cost of making a car, let’s say you’ve got a $25,000 car that somebody’s making. If one get has an extra $2,000 dollars to spend, he can have just that much better interior, he can have just that much better fit and finish, he can put a CD player or perhaps GPS as standard equipment. He could just have that much nicer of a car such that people who buy the one will say well, this is a little bit better car than the other one. And of course it is. It’s got $2,000 more in it. I mean, $2,000 bucks is real money, particularly at a manufacture to cost basis. And it’s something which our companies have been burdened with for so many years now that they’ve lost share from, well, over 50% of the market now down to about 20% of the market.

HH: Now Governor, you also write that new faces in management need to be recruited from unrelated industries, from companies widely respected for excellence in marketing, innovation, creativity and labor relations. But at the same time, you write you don’t want to lose your salespeople. Don’t fire the best dealers, don’t crush them. So it’s really between a rock and a hard place here. You’ve got to get rid of the top management, but you can’t lose your salespeople.

MR: Yeah, you do want to have some new faces in management, and I don’t know each of the companies well enough to say which guy or gal should stay and which one should go. But in a setting like this, had you or I been managing one of these businesses and seen it lose market share year after year after year to the foreign competitors who make cars right here in the U.S., you’d say you know what? We’ve got to get somebody in here who can do better than you. And with regards to the sales force, I know there’s a temptation to say let’s get rid of a bunch of dealers, but you know, you want those dealers out there selling cars. And so I’d be really careful not to get rid of the best dealers. But of course, some of those that just can’t perform have got to find a better line of work.

HH: Now Governor Romney, last question on the cars before we turn to the Republican Party generally. Your dad was a car company exec before he was Governor of Michigan. And yesterday, Chris Dodd bore in on Rick Wagoner and the other Big 3 CEOs, and asked them what their compensation was. And it’s a pretty big number, it was $12, $20 million, that sort of stuff. Did your dad ever make anything like that when he was running AMC?

MR: No, he did not make that kind of money, and I remember his pension was roughly, if my memory holds correctly, was about $65 dollars a month was his pension. It was a very different time. Executives were not looking to get fabulously rich, although my dad did just fine, but nothing like the kind of money they’re making today, of course. And you know, his was a time, when he came in, he cut his pay. The other executives cut their pay. They got rid of their perks. He bought stock in the company with the money he had saved. He went out to the workers and talked about how we’re going to build a successful company together. I mean, it’s that kind of a team approach that I think you have to see in Detroit. The old enmity between labor and management cannot persist in the 21st Century if you want to survive.

HH: Is it fair, then, for Congress to go after executive pay? I mean, you made a lot of money in the marketplace, a lot of these people on Wall Street had made a lot of money in the marketplace, and Congress is targeting it. Is it fair for them to do so?

MR: Well, you don’t go after folks that are being successful, and that are investing in their own businesses, and that are making those investments. That’s the free market at work. But if somebody comes and says hey, I made a huge mistake, and if I go under, I’m going to pull a lot of other people with me, and they try and convince government to help out, well you sure don’t want that guy to say oh, and by the way, I want $20 million dollars a year. You say hey look, you made a mistake and you want our help? Then we’re going to expect you to be compensated in a far more frugal manner befitting a company that’s in trouble like yours.

HH: Now Governor, let’s turn to the Republican Party. We haven’t talked since the election results. Why did the GOP get hammered at the polls again in 2008?

MR: Well, you know, a whole series of events converged upon the party as you know. The economic downturn, which is frightening and severe, was understandably blamed on the guy that was at the top of the nation, the President. And his party suffered, and that hurt John McCain without question. And of course, there was probably a desire for change anyway, just the natural give and take, the flow of politics. But the combination of those things, plus the ongoing conflict in Iraq, I think, made people say they wanted a change. And that, well frankly, you know, given all the things that were going against Senator McCain, the size of the tide against him, I think he did pretty darn well.

HH: Now you had a lot of young voters in your primary campaign, and the Republicans lost that demographic 66-32%. Any ideas on how they reestablish credibility with that under 30 generation of voters so important to Barack Obama’s win?

MR: Well one, I think we’ve got to go to campuses. I think Republicans have to go to campuses and talk about what it is that makes America so strong, and what our party stands for, and make it in a very clear and convincing way. I mean, we are a party that believes in strength and freedom. And when I say freedom, I mean we believe in free markets, of course regulated appropriately, but we believe in free markets. We believe people should be free to choose the health care they want, free to choose the school they want for their kids. We believe people should be free of excessive taxation. We’re a party that believes in freedom. And I think describing to young people why it is the principles of the Republican Party are right for them and for the country is something we can do and we’ve got to do. But you know, we missed out really doing that this time, and I think we’ve got to do a better job.

HH: A second demographic, George W. Bush got 44% of Latino-American voters in 2004. That number dropped precipitously this year. What’s behind that collapse of confidence in Latino-Americans in the Republican Party? How do you repair it?

MR: Well, you’ve obviously got to campaign aggressively for Latino votes, and communicate again why it is that the principles that our party proposes and represents are principles which will favor the entrepreneurial spirit and the family values of the Latino population. We didn’t do that very well, and we’ve got to do a much better job of communicating with voters who I think would be our natural base in some respects. So now of course, at the same time, we find some people who want a government handout. That’s going to be true any time. We’re not going to do well with that group, because they want to see higher taxes, because a higher tax means more for them. But we’re going to lose those to the Democrats, but we’ve got plenty of others who ought to be on our side.

HH: Was there a technology gap, Governor Romney?

MR: You know, I know that it’s widely viewed that the Republican Party was behind the Democrats in terms of technology, and I do believe that was the case. But I think more than the technology was the fact that a lot of young people, and a lot of anti-war activists, just ran to Barack Obama’s camp. And frankly, when he was running his primary, he was the most liberal of the major contenders in the Democratic race, by far the most liberal. He took extreme positions. And then as soon as the primary was over, he moved very aggressively to the middle. As a matter of fact, he was almost indistinguishable from a Republican when he was running the general election. And yet those very liberal supporters hung with him and supported him. So I think it was more the message than the technology.

HH: And did the McCain-Palin ticket swing hard enough at Barack Obama, in your view?

MR: You know, I wouldn’t fault the campaign for not having swung hard enough. I would say that it’s important that we as a party, and each of our candidates, make it very clear what we stand for. And I know, I’m not going to make any criticism of any one campaign, but I know in my own campaigns, when they’re all over, the only thing I regret is that I didn’t make sufficiently clear exactly what I’m going to do, what I stand for, in a way that people remember. And I’m sure every candidate feels the same way. It’s a burden we’ve got.

HH: Now in terms of how a loyal opposition ought to conduct itself, if you’re sitting down with John Boehner and Mitch McConnell, the leaders of the Republicans in the House and the Senate respectively, what’s your counsel to them on how to conduct the first half-year, first year of the Barack Obama administration?

MR: Well, first comment is don’t come out attacking. Hopefully, this guy will, meaning our new president, will do a good job. I mean, hopefully, because this is our country. He’s our president. We want him to do well. And if he governs in the middle, and he doesn’t take the left views that were part of his primary and part of his record before he was president, if he governs towards the middle, why we can work with him, and we can hopefully see him do some good things. On the other hand, if he takes some very leftist postures on judges or on, let’s say, card check, this unionization being imposed on businesses, if he does some of those things, why then we’re going to have to jump and shout from the very beginning and say halt, that’s taking us in the wrong direction. But I hope he’s more centrist. We’ll see very, very soon.

HH: Now Governor Romney, you’ve had to deal with Democrats a lot when you were the Governor of Massachusetts. In terms of which part of their party dominates their legislative process, do you expect that centrist Democrats will be running the Congress, or their hard left activists?

MR: Well, you know, I think what you’re going to hear is the hard left activists are going to say hey, now is our time, let’s put through all the stuff we’ve been wanting to do, and particularly the financial base of the Democratic Party, the organized labor, the trial lawyers. They’re going to say hey, now is our turn, put through all of our favored little programs. But Barack Obama is going to have to say whoa, guys. If I do that, I’m going to hurt the country, I’m going to hurt my chances of getting reelected, and he’s going to, if he’s wise, he’s going to say no, no, no, I’m not going to bow to the demands of the legislators who are going to want to give into these extreme voices within the Democratic Party.

HH: In terms of the early appointments that we’ve got, Secretary of State elect Clinton, Attorney General elect Holder and Health And Human Services Secretary Daschle, what’s your opinion of those, Mitt Romney?

MR: Well you know, I don’t know which ones we’ll finally see. Frankly, I’d rather have a Hillary Clinton as Secretary of State than Barack Obama, because her responses to issues like who’d she meet with if she were president and so forth, and her posture on Iraq was more moderate, and I thought more well-considered than was Barack Obama’s. So she may not be as attractive to me as Colin Powell, but she’s better than we might have expected from Barack Obama. You know, time will tell where they are. Rahm Emanuel is a very effective leader-manager. I don’t know where he’s going to take the President, but we can cross our fingers.

HH: Last couple of questions, Mitt Romney. I know you’ve been down in Georgia working for Saxby Chambliss, trying to keep the Republicans at at least 41 votes in the United States Senate. Have your paths crossed yet with Mike Huckabee, and have you read his new book where he takes a number of shots at you?

MR: No, I really haven’t had a chance to look at that, and probably won’t. I’m frankly less interested in looking back, and rather more interested in looking forward for our party, for the country. We face some extraordinary challenges right now, and we’re on the cusp of a very serious economic condition. It’s already very serious for a lot of people, for almost all people, frankly, in this country. And so I’m not trying to rehash what’s happened in the campaign. I’m looking instead on how we get America in the right posture going forward.

HH: If Barack Obama reached out to you, Governor, and said hey, join the team, I’ve got a job for you, would you accept such an invitation?

MR: (laughing) I can’t imagine the circumstances under which he’d do that, and I was actually asked whether I would be willing to join the McCain administration, and I said that’s not something I’d want to do. I’d certainly not want to do it under the Obama administration, either. If he asked me to come be Secretary of State, why, it sure would be hard to refuse him, but I don’t think that call’s going to be coming.

HH: All right, last question, then. What do you plan on doing in ’09 and ’10, Mitt Romney?

MR: Well, I’m going to continue to fight for the things I believe in, and I’m probably going to be doing some writing and doing some speaking, and support candidates particularly in ’10 who I think have a good shot at bringing more balance to Washington. I’m not going to be giving up on the country, and on the ability to fight for things we believe in.

HH: Mitt Romney, always a pleasure, thanks for joining me.

MR: Thanks, Hugh.

End of interview.

Advertise With UsAdvertisement
Sierra Pacific Mortgage
Back to Top