Republican presidential candidate Mitt Romney, the son of former Michigan governor George Romney, defended his 2008 column in the New York Times opposing Detroit's autos bailout with an op-ed in yesterday's Detroit News. Calling the $85 billion bailout — of which the government expects to lose around $24 billion — a "sweetheart deal" to autoworker unions, Romney said he would have allowed the companies to undergo a managed bankruptcy without government dollars. A private bankruptcy would have allowed secured creditors and salaried employees to take less-severe haircuts, and a UAW trust fund wouldn't have received a 55% stake in Chrysler. Romney called on the Obama administration to release its remaining shares in GM.
Opponents responded today. Former Obama administration auto czar Steve Rattner, whom Romney called "politically connected and ethically challenged," said the notion of finding private capital to fund a government-free bankruptcy for GM and Chrysler was "utterly fantastical," The Detroit News reports. Said Rattner: "At that moment, with the stock market in free fall and the economy shedding 700,000 jobs a month, no one — I repeat, no one — had the slightest interest in funding these companies on any terms."
J.D. Power and Associates' Vehicle Dependability Study, which rates dependability for 3-year-old (2009 model year) vehicles, said overall dependability improved 13% this year over last year's 2008 model year ratings. Twenty-five of 32 brands improved, six dropped and one stayed even, J.D. Power reports. Lexus, Porsche, Cadillac and Toyota were the top-ranked automakers, with Chrysler, Dodge, Jeep and Ram at the bottom. Chrysler responded, saying the automaker has orchestrated major changes in product development since 2009.
Volkswagen Group's global sales, which include VW, Audi and six other global brands, rose 0.1% in January, Automotive News reports. Emerging markets like Russia and India saw substantial improvements, but Europe's sovereign debt crisis continued to weigh on consumer confidence and auto sales, while an early Chinese New Year had Chinese consumers taking vacations — and not buying cars. Sales in both regions, VW's two largest, fell in January.
Indian automaker Tata, which owns Jaguar and Land Rover, had a record stock surge on strong profits in the final quarter of 2011, outpacing analysts' expectations by 31%, Bloomberg News reports. The profits came from strong sales for the two luxury brands in China and Russia over the final months of 2011, which outpaced slower growth in developed markets.