Republican presidential candidate Mitt Romney is being criticized by the United Automobile Workers (UAW) union for having opposed the government bailout of Chrysler and General Motors in 2009. On a campaign for the Feb. 28 Michigan primary election, Romney has asserted that what he wanted for Chrysler and GM was a "managed" private sector bankruptcy reorganization.
Bailout experts such as former Obama auto czar Steven Rattner don’t agree with Romney's position, explaining that there was no private funding for bankruptcy reorganization at the time and that the effort would have basically resulted to the liquidation of GM and Chrysler.
In a statement, UAW President Bob King said that Romney is "misleading voters" when it comes to the bailout issue. King said that Romney is attempting to “rewrite history” as he hits President Obama and the UAW for having saved the auto industry. The UAW said that concessions have been made since 2005, foregoing pay increases, overtime pay and holidays.
They also agreed to a lowered pay and benefit structure for new hires. A November 2010 report by the Center for Automotive Research in Ann Arbor, Mich. concluded that due to this plan, over 1.4 million jobs and $96 billion in personal income nationwide were saved.
King said that the rescue loans had aided the auto industry in surviving "the darkest hour of its history." He referred to those who worked at Chrysler's Sterling Heights, Mich., assembly plant who were faced with a plant closure before Chrysler received its loans.
This plant rolls out the Chrysler 200 and Dodge Avenger intended for the U.S., as well as the Lancia Flavia, the European variant of the 200. In this UAW statement, Jeff Klayo, a member of UAW Local 1700 at the plant, described Romney's remarks to be "an attack on American workers." He said that whether the company succeeds or takes a downturn, its workers are locked to the same fate.
On April 30, 2009, Chrysler and certain subsidiaries filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code at the United States Bankruptcy Court of the Southern District of New York. A month later on June 1, 2009, General Motors Corp. and certain subsidiaries filed similar petitions also at the Bankruptcy Court of the Southern District of New York.
Chrysler emerged from bankruptcy on June 10, 2009, receiving around $4 billion from the US government's Troubled Asset Relief Program (TARP). The US government, through the US Department of Treasury, initially owned 6 percent of the new company (Chrysler Group LLC).
Meanwhile, GM emerged from bankruptcy on July 10, 2009, and received $14.3 billion from TARP. In its emergence from bankruptcy, the US government owned 60.8 percent of the carmaker.