Romney: Earlier GM bankruptcy would have saved billions for taxpayers

By Joseph Williams, Globe Staff

WASHINGTON -- Former Massachusetts Governor Mitt Romney, whose father was an auto executive during the industry's post-World War II heyday, today called GM's bankruptcy "a sad day" for the nation as well as "a son of Detroit" like himself.

Romney, who made millions as a venture capitalist and whose business acumen helped rescue the Salt Lake City Olympics in 2002, also offered an "I told you so" to the Bush and Obama administrations, blaming both for wasting "billions upon billions" of taxpayer dollars trying to save the nation's largest auto manufacturer.

Rather than spend vast sums to keep it afloat, Romney said, the White House under Bush should have followed his prescription from last year's GOP primaries and pointed GM to bankruptcy court, which would have saved money and put the corporation back on the road to recovery much sooner.

Instead, Romney added, the federal government wasted money and time, and allowed the United Auto Workers to "overreach" in its negotiations with management, gaining expensive concessions that would have been unlikely in bankruptcy court.

"It was a course I recommended months ago," Romney said during a speech on national defense at the conservative think tank, the Heritage Foundation. When GM took federal money, it knowingly "put the government in the driver's seat" and accepted tens of billions of dollars that it perhaps knew it could never pay back, he said.

Though he expects GM's long-term prospects will be helped by declaring bankruptcy, "as a boy from Detroit I'm saddened by that," Romney said.