Mitt Romney needs a primary win. And he's betting that he'll get one in Michigan -- which has the country's highest unemployment rate -- tomorrow. How does he plan to do that? The Boston Globe reports he'll fix Michigan's biggest employer -- the automobile industry -- including General Motors Corporation (NYSE: GM) and Ford Motor Company (NYSE: F).
Last week I did a radio interview in which I was asked how Mitt Romney could turn around his campaign after losses in Iowa and New Hampshire. I suggested that he should figure out what Michigan voters needed in a President and array his strengths against competitors' weaknesses to better meet voters' requirements. What does this mean? As the only candidate with a successful track record as a management consultant and investor, I argued that he could try to win Michigan by appealing to its voters' desire for the good jobs they enjoyed before the U.S. auto industry began losing ground in the 1980s.
As the Globe reported, Romney gave a speech along these lines to the Detroit Economic Club. If he wins the White House, Romney said, "I will roll up my sleeves, and I will personally bring together industry, labor, congressional and state leaders to develop a plan to rebuild America's automotive leadership. Washington should give the auto companies flexibility on higher fuel efficiency standards for vehicles, as well as increase funding for research from $4 billion to $20 billion and provide new tax benefits for research and development."
This sounds good. But Romney's problem in my view is that he appears to believe statements that many people find patently false. For instance, last week it was reported that Romney had pulled his advertisements in South Carolina and Florida to focus on Michigan. During my radio interview, the host read me a statement in which Romney said that he was not aware of the decision to pull these advertisements.
I thought that this statement simply did not pass the "sniff test." I found it impossible to believe that Romney, who is extremely detail-oriented, would not know that his campaign had stopped running ads in South Carolina and Florida. Such a decision is of great strategic importance to his campaign and if he did not know about it, then he is not the skilled strategist that he is trying to portray himself as in Michigan.
Moreover, count me among those who think that after decades of losing to Japanese automakers, Romney's plan is unlikely to enable GM and Ford to start taking market share away from its competitors. The problems that GM and Ford face go far deeper than letting them build cars that guzzle more gas and giving them a few billion dollars worth of government R&D money.
I would hope that the son of an American Motors executive and former Michigan governor could be more realistic and compelling than that.
The polls make it look too close to call. If he wins, Romney will tout his triumph as the beginning of his path to victory. If not, maybe he'll fold up his tent and come back in 2012.
Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.
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Reader Comments (Page 1 of 1)
1-25-2008 @ 3:49PM
Dan said...
If Detroit Auto Executives were to wake up!
They could bring back the all jobs in Detroit and cut our dependence on foreign oil. And Lead the world again
with inovation.
In most all of Europe cars get an average of 40MPG
The current us average is 20MPG
1n 94 - 2000 GM in a joint venture made a car that got an average of 55mpg a geo XFI. In the current US line of Ford and GM If you need to spend 50K on a hybrid to get close. No wonder Toyota sells so many camry's at 13K with 36-42 MPG Americans want an car that they can afford that can get 50 MPG
Detroit already knows how to do this ! So what are they waiting for.
GM has entered a joint venture in warrenville illinois to turn trash into ethanol. If you look into this process and others available it is and has been viable for some time!
Why are we wasting corn! Biomass and Trash is free
The Technoogy is out their!
Put it and Americans to Work!
1-14-2008 @ 7:20PM
A D said...
Michigan more than any other place saved democracy 60 years ago.
Now two words are destroying Michigan.
"Global Economy" is not a valid term. It is not a positive. It is more often an excuse. Ask those that ignore thier neighbors and country mates. For some reason saying "Global Economy" removes all guilt. But for what "GE" is, it is not something that any American can be proud of.
2-05-2008 @ 9:04PM
cc said...
I agree with the GE comment, I wish someone would explain why importing everything and the u.s becoming a service nation is ok
1-14-2008 @ 9:57PM
Winghunter said...
By All Means! Let Romney buy them all up, lay off who isn't already out of a job and turn the company around as he has always done...Don't you folks know who this clown is??
Candidate Research - Know Who You're Voting For ( The Easy Way )
http://sayanythingblog.com/readers/entry/candidate_research_know_who_youre_voting_for/
1-15-2008 @ 12:28AM
Navi Thach said...
why should Romney care about Michigan. First, he seems like the stereotypical pompous asshole Lexus or Mercedes driver, more so Lexus than Benz. Second, Ford, GM, and Chrysler are outsourcing their parts to China, Mexico, Europe, and India - Ford is now using Indian-made parts in their new 3.5L V6 in the Taurus. Third, the Big 3 are building cars in Mexico and Canada while Chrysler is looking towards Nissan and China's Chery for future models.
And at the same time, Toyota and Honda are pouring money into the US - mostly in non-union strongholds and their parts suppliers are coming in, too. Ironic.
1-15-2008 @ 1:53AM
Gumby said...
Romney saying "I will personally bring together industry, labor, congressional and state leaders to develop a plan to rebuild America's automotive leadership" should be seen as an insult to shareholders. Why is it every time shareholders are being left out? Everyone is out to protect the consumers and workers and forgot all about shareholders. Shareholders are not exactly your kind of greedy do no gooders. Shareholders has 401K or IRA accounts or trade for extra earnings and are an important source of jobs.
Romney's father was an executive of American Motors that was later sold to Chrysler for its Jeep division.
1-16-2008 @ 8:31AM
Richard said...
Some say Romney is a clown because he wants to help Detroit to start leading in the Auto industry which incidentally are on their way of accomplishing that on their own. One has to ask themselves, are we ready to lose another vital industry to foreign countries? The answer is - "no". McCain is not very optimistic about getting jobs back. His reaction is like holding his arms up in the air and giving up. Romney is optimistic and is the one who I think can lead this country out of our mess!!!
1-15-2008 @ 11:54AM
jpdr1100 said...
McCain is a the realist. Romney is pandering for votes by telling Michigan what he thinks it wants to hear.
A few billion $$ of my tax dollars for alt-fuel research is not going to push Detroit ahead of the rest of the world. It may help advance the technology, but that technology can be utilized by any company, located anywhere. And even if Detroit gets it first, they'll just use it on the vehicles they build in Mexico, Canada, India, China.....
1-15-2008 @ 2:34PM
Alan Crane said...
McCain HAS NO RECORD OF SUCCESS.
Can anyone show a list of John McCain's accomplishment in congress over the last 25 long years? If you dig into it, you will find he has only involved himself in a whole bunch of controversial issues with no significant results. Troop surge was proposed by the military leaders, not from a senator. He only supported it. As far as improving the economy goes, you can say he hasn't done much. His military service can hardly translate to real life management success, simply because you basically have to follow order in the military and "Yes, Sir!" is your only acceptable reply to your senior.
McCain at 71 years old, is a very decent and honorable man, no question about it. But what is questionable is his ability to lead, manage the federal government and the biggest economy of the world. He has ridden his Vietnam war hero status for a long time as a CAREER POLITICIAN. I have no confidence in him defeating the Democratic nominee, let along being the next president.
1-16-2008 @ 8:59AM
Richard said...
Who said our tax dollars should go to help the domestic auto companies? I certainly didn't! I don't believe our tax dollars should help them out, but our government needs to get off their butts and start doing something to help build the infrastructure for alternate energy. This should be a high priority, but they have no clue. They are great to put the burden on the auto industry when it is not only the auto industry that's at fault. GM has recently bought a company that will produce alternate fuel because they can not depend on the do nothing government.In all my life I have never seen a do nothing government like we have.
Mitt Romney is an optimist and a doer. Check his record in MA.
McCain said those job will never come back. I hate people how think that way. I've seen it too many times when people like that were wrong.
1-18-2008 @ 8:03AM
jpdr1100 said...
Who said tax dollars should go to help the auto industry? ROMNEY DID! I don't know which Mitt Romney you are listening to but the one I heard said exactly that.
http://www.freep.com/apps/pbcs.dll/article?AID=/20080114/NEWS15/80114052
As for the government handling only the infrastructure, did the government pay to build the first gas stations? Or did the economics make sense on their own, thus making them attractive to the private sector to do?
And I don't need to "check" Romney's record in Mass, I live in Mass. Mitt was the 4th republican governor in a row for us. After him the state went democratic. He got elected by telling us he was pro-gay rights and would support abortion rights. He basically did nothing for his short term, until he decided not to run again, but to run for president. Then he suddenly became anti-gay, anti-abortion, and pass a very democratic universal health care program.
Anything more you want to know?
1-19-2008 @ 3:09AM
joe said...
firstly, the jap govt gives tons of subsidies to the jap 3. How is detroit to compete with a socialistic jap and her companies? Alsowhat differs from detroit and the jap companies is a small amount that maes a huge difference. Also make note that one big three company has invested more in the us in the past couple years than ALL FORIEGN auto companies combined have in the past quarter century* according to. Levelthplayingfield.org
1-22-2008 @ 7:02PM
jpdr1100 said...
And the US government has handed billion$ to the Detroit automakers, which the narrowminded Japan-bashers all seem to overlook.
You probably don't want to googling USCAR or PNGV and educate yourself, because those erroneous opinions of yours are in danger of being exposed.