Romney Cites Bankruptcy as Primary Reason for General Motors' Success
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Romney Cites Bankruptcy as Primary Reason for General Motors' Success

February 29, 2012


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After previously criticizing President Obama for the much-maligned bailout of the auto industry, Mitt Romney is now praising General Motors's recent success after filing for bankruptcy a few years ago.

A few hours after General Motors announced that the company had its most successful year ever in 2011, as measured by its profits, the Republican presidential candidate said he was "delighted" that the car company had achieved such success, according to a report from ABC News.

In addition to his delight, Romney also took a bit of credit for the bankruptcy process that aided General Motors in its efforts to improve the company, as he claimed that he had recommended bankruptcy "from the very beginning."

Romney's remarks came during a brief talk in Michigan, in which he claimed to "love the businesses of the state" and expressed his desire to see the auto industry "thrive and grow."

Romney was campaigning in Michigan for the Republican presidential primary in the state, where his father once served as governor. Romney hasn't lived in Michigan for decades, but he still maintains that he has a close emotional connection with the state. Romney won the popular vote by a small margin, and will likely end up splitting the delegates with rival Rick Santorum.

While Romney was critical of the $80 billion bailout for the auto industry that included billions of dollars in payments authorized by both President Bush and President Obama, Romney praised General Motors' decision to undergo a "managed" bankruptcy process.

During its bankruptcy filing, the company was able to restructure some of its contracts and shed a significant amount of debt, while also lowering its business costs. After being left for dead in 2008, General Motors reportedly earned $7.6 billion in 2011, which represents a 62 percent increase from its profits in 2010.

The company's remarkable improvement was undoubtedly aided by its bankruptcy, but most neutral observers would think it odd to imagine that the recovery could have occurred without the bailout money, as well.

Thus, some have criticized Romney for labeling the auto bailouts "crony capitalism" while also praising the company's decision to file for bankruptcy, which takes place in federal courts and is a clear example of debt relief that is aided, at least in part, by government intervention.

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