Romney, Granholm clash on TV

On Meet the Press this morning, Michigan Governor Jennifer Granholm made her case for temporary loans to domestic automakers hit by a combination of slow sales and a credit freeze, at a time when all three were in the midst of retooling for a new generation of vehicles. 

Mitt Romney, former governor and presidential candidate, whose father was once CEO of AMC, followed his party’s line, saying that bankruptcy was the most desirable solution, claiming that it would erase a $2,000 per vehicle cost difference.

According to media, industry, and union figures, much of the labor cost difference between domestic and foreign vehicles (including those built in the U.S.) is due to pensions and health benefits paid to former employees, who traded wages for deferred compensation. 

Granholm pointed out that a major cost advantage of foreign automakers is due to their domestic health insurance, which is provided at no cost to employers. This provides cost benefits in expensive areas such as engineering and design even if their vehicles are assembled in the United States.

Granholm said she wanted the nation’s leaders to inspire confidence and spur Americans to buy again. Romney said he wanted to see more tax cuts and stimulus spending.

The U.S. budget deficit is currently $10.6 trillion, or roughly $35,000 per person. It was around $20,000 per person in 2002.