Romney vows to sell U.S. stake in GM promptly
 | "There is no reason for the government to continue to hold (its GM stake)," Romney told The Detroit News. |
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DETROIT -- Mitt Romney, the presumptive Republican presidential nominee, plans to quickly dispose of the federal government's remaining stake in General Motors if he wins the November election.
Romney, a frequent critic of the U.S. government's rescue of the auto industry, told The Detroit News in an interview that he would also review the Obama administration's plan to nearly double fuel economy targets.
"There is no reason for the government to continue to hold" its GM stake, Romney, a Michigan native and son of former American Motors CEO George Romney, told The News in an interview published today.
In the interview, Romney criticized President Obama for not selling off the stock, even at a loss.
"The president is delaying the sale of the shares to try and avoid the story that the taxpayer took another loss," Romney said. "I would get the company independent from government and run for the interests of the consumer and the enterprise and its workers -- not for the political considerations of government officials."
The U.S. Treasury bailed out GM with nearly $50 billion in 2008 and 2009, and has held a 26 percent stake in the automaker since the company's initial public offering in November 2010.
GM shares closed Tuesday at $21.25 in New York Stock Exchange trading, well below their IPO price of $33 a share. The Treasury would lose billions of dollars on the bailout if the shares were sold today.
Tim Massad, the assistant treasury secretary in charge of the U.S. stake in GM, told The News last month that the administration has not decided when it will sell the stake.
"We have to balance maximizing recovery for the taxpayers with the speed of exit," he told the paper.
Obama oversaw the bulk of the government's controversial restructuring of GM and Chrysler Group, and defends the industry's $80 billion rescue because it saved thousands of U.S. jobs and a core part of American manufacturing.
A spokesman for the Obama campaign told The News Romney is the last person who should be offering advice about the future of the auto industry.
"The last time Governor Romney weighed in on the future of the auto industry," the spokesman told The News, "it was to suggest that we let Detroit go bankrupt, a betrayal no Michigander is likely soon to forget."
GM officials are also eager to see the U.S. government unload its stake while shedding a stigma that has often pulled the automaker into political crosscurrents.
Company officials also complain that government-imposed executive pay caps are undermining executive retention and recruitment.
'Best approach'
Romney also told the paper he plans to seek "a better way of encouraging fuel economy" than tougher corporate average fuel efficiency requirements "as the sole or primary vehicle."
The Obama administration has proposed nearly doubling fuel-efficiency requirements for light vehicles to 54.5 mpg by 2025.
The more stringent rules -- negotiated between the White House and most automakers -- will cost the industry $157.3 billion and add about $2,000 to the cost of an average car, government studies show.
It will also save motorists $1.7 trillion at the pump, the White House estimates.
"The best approach is to try and build vehicles that people want, rather than having the government telling the companies what they must make," Romney told The News.
"I would work with the manufacturers to find ways to encourage fuel economy on the part of the consumer. But trying to have the manufacturer push the product on the consumer -- that the consumer doesn't want -- is not the right approach."
Romney also suggested he would revisit the federal government's financial support -- championed by the Obama administration -- of the fledgling electric-vehicle industry.
The government has doled out billions of dollars in loans to renovate U.S. assembly plants to build more fuel-efficient cars and light trucks and encourage the construction of EV battery plants.
The Obama administration has spent $2.4 billion as part of a goal to place one million electric vehicles on U.S. roads by the end of 2015. And in his 2013 budget proposal, Obama is seeking an increase in federal tax credits to encourage more EV demand.
But several EV startups have already collapsed or been forced to suspend operations for lack of funding or adequate sales.
The government, Romney told The News, is attempting "to force a market to adopt a technology that people aren't interested in."
You can reach Adam Rubenfire at arubenfire@crain.com.
