Contrary to the liberal media, GM and Chrysler went bankrupt under Obama’s leadership. However, a structured bankruptcy does not mean a company is going out business. In fact, the point of a structured bankruptcy is to keep the business going. Both Obama and Romney supported a structured bankruptcy for GM and Chrysler, neither wanted those companies to go out of business, and both wanted to help them stay in business.
But a bailout need not be a sellout, and that’s the difference between Obama and Romney on saving these two companies. Obama disregarded bankruptcy law, and structured a sellout to the UAW in which property was redistributed from creditors, bondholders, and stockholders to the UAW. Everyone else lost, and now the UAW is one of the biggest stockholders in GM. That was wrong, and that’s what Romney opposed.
The simple fact is that those companies could not afford to stay in business while paying the excessive wages and benefits required by their UAW contracts. Had the structured bankruptcy followed the rule of law used in prior bankruptcies, then an unbiased judge (clearly not Obama) would have opened those contracts and reduced the wages and benefits to a point where GM and Chrysler could become highly competitive again. This would have been done without stripping creditors and bondholders of all their property, senior citizens who had their pensions and IRAs invested in those company bonds would not have lost everything, and the surviving companies would be in far better shape to build competitively priced autos than they are today.