Romney called for letting automakers go bankrupt 4 mo. ago

Romney's Alternative Auto Rescue Plan

Thursday, November 20, 2008 | FoxNews.com

This is a rush transcript from "Your World With Neil Cavuto," November 19, 2008. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: Stocks down, as it looks like the prospects for a huge auto bailout are up — the industrials on the day down more than 427 points, their first trip, on a closing level, below 8000 since March of 2003. Back then, it was concerns about a slowing economy. Ditto today.

Bad economic news did not help. What some are calling a bridge loan to nowhere for the auto industry almost certainly hurt. Yet, today, Congressman Barney Frank saying that, if you are not for the bailout, you are not for blue-collar workers.

(BEGIN VIDEO CLIP)

REP. BARNEY FRANK (D), MASSACHUSETTS: There's a double standard here. Aid to blue-collar employees is being judged by a standard different than white-collar employees.

I think the average AIG worker gets a good deal more than the autoworkers, probably not the clerical people, but the people at AIG.

(END VIDEO CLIP)

CAVUTO: So, should lawmakers, now, be guilted into a bailout?

Former Republican presidential candidate Mitt Romney says absolutely not. He joins me right now.

On a day, Governor, we had this huge sell-off, do you think, partly on fears that Washington's out of control?

MITT ROMNEY (R), FORMER MASSACHUSETTS GOVERNOR: Well, I think it's mostly on fears that the economy is out of control. And — and there's real reason for that.

• Video: Watch Neil's interview with Mitt Romney

I think the — the key right now is to make sure that, with regards to the auto industry, we take advantage of a very difficult situation to make sure that we put the auto industry on such a stable footing, going forward, that we have an industry that's competitive, that's viable, that adds jobs in the future, that we don't have to be doing this again and again and again.

And I'm afraid, if we just write Detroit a check, without doing the kind of hard restructuring work that's necessary, why, we will just pay for ongoing loss of market share, unprofitability down the road, and more bailouts.

CAVUTO: All right, so, bailouts aren't the answer, but a bankruptcy filing could be? Could you explain?

ROMNEY: Well, the right — the right procedure, typically, for helping a country — excuse me — a company restructure is by either having a Chapter 11 bankruptcy, where you stay in the court's guidance, or you can that on an out-of-court settlement, where the parties come together and agree a restructuring. That would be preferable, of course.

It's a managed setting, where you say to the various participants that are part of the GM, or Ford, or Chrysler story, that they're all going to come together; they're going to reduce the burdens on the companies so they become more competitive with the transplants that have come here from overseas, or with the foreign imports, and that we have an auto industry that's competitive.

But, until we actually take out some of the costs, the excess labor costs, the legacy costs of retirees, the excess real estate costs — until we take those out, these companies are going to see ongoing years of more and more trouble. continue...