Republicans Have Stern Words for Auto Industry

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Senior Republicans gathered here aren’t too happy with the U.S. auto industry’s pleas for bigger federal loans — up to $50 billion — supposedly to finance a switch to more green vehicles.

“We don’t want our automobile industry to go down, but on the other hand, they’ve made a lot of bad choices,” said Utah Sen. Orrin Hatch. “It’s a worry about how large the help from the federal government has to be.”

Mitt Romney, the former Massachusetts governor who has deep ties to Michigan where his father was governor and chairman of American Motors Corp., said the last thing the federal government should be considering is spending “dumb money” to bail out the auto industry. “Having come from a world of business, you’re always looking for what we called dumb money, somebody who would put their money in and not ask for anything in return,” Romney said in an interview Thursday. “I’d be careful never to have the government become dumb money.”

Romney, who made a fortune as chief executive of management consultancy Bain & Co., and then as co-founder of private equity house Bain Capital, offered this approach: sit down with all the players — labor unions, management, shareholders and bondholders, federal and state governments — to figure out how to put the U.S. domestic auto industry back on an even keel.

Rep. John Shimkus of Illinois, a member of the House Energy & Commerce Committee that has oversight of the auto industry, was more direct: “As a conservative Republican, if you believe that risk ought to be rewarded, which I do, then you also have to believe that risk has its penalties. And the taxpayer shouldn’t be on the hook.”

In passing the sweeping energy bill last December, Congress approved a $25 billion loan facility that auto makers could draw upon to invest in the development of cleaner cars, such as battery-operated vehicles. With the credit crunch and weak sales, senior executives at the Big Three auto makers recently said they plan to ask Congress to double the amount.