Chrysler Sends Jeep Manufacturing to China
The Romney campaign is getting some heat for pointing out that Chrysler is sending some Jeep manufacturing to China. But I think there’s a valid point there, and people in Michigan shouldn’t buy the spin that Romney’s claim was without merit.
Chrysler sold 33,463 jeeps in China this year, thru September. Chrysler hasn’t built any jeeps in China since 2009. And now Chrysler wants to start manufacturing in China. That means lost American jobs, obviously.
Chrysler’s plans will help the company, will benefit shareholders, and will help consumers in China. Which is all fine, and the way free markets work. Except that the Obama administration has lost over a billion of U.S. taxpayers’ dollars to Chrysler that ain’t coming back, after a 12.5 billion dollar bailout. In exchange for the bailout, Obama could have insisted that Chrysler not expand overseas manufacturing for some period of time. Instead, Chrysler got our tax money, and U.S. workers who have been building jeeps for export to China will get the shaft. Don’t imagine that the new plants in China won’t be exporting cheap jeeps throughout other countries in Asia, too.
Mitt Romney argued for a managed bankruptcy for Chrysler, accompanied by federal loan guarantees. Obama finally realized that a managed bankruptcy was a good idea, but rejected the idea of loan guarantees, instead opting for direct taxpayer assistance to Chrysler. Romney’s idea was better. The loan guarantees would have had to be sufficient to reduce the risks involved in the loans, and then private banks would have loaned the money to Chrysler with sensible conditions. The government would not have gotten into the car business, private market forces would have made Chrysler more productive than it is now with more American jobs, and taxpayers would not have lost over a billion dollars.