The CEO of the company newly formed from the merger of Chrysler and Italian-automaker Fiat said Friday that Republican presidential candidate Mitt Romney was "smoking illegal material" when he opposed bailing out the Detroit automakers in 2008.
Romney, who declared his candidacy for the 2012 Republican presidential nomination this week, penned an op-ed in the New York Times in November 2008 titled "Let Detroit Go Bankrupt" in which he argued that assisting the American automakers was a bad idea.
A day after Fiat purchased the federal government's shares of Chrysler, which said this week it was paying back most of the money it borrowed ahead of schedule, the new combined company's CEO, Sergio Marchionne, was asked about Romney's 2008 op-ed. Marchionne said "whoever told you that is smoking illegal material."
"That market had become absolutely dysfunctional in 2008 and 2009," Marchionne said in an interview with CNN Friday. "There were attempts made by a variety of people to find strategic alliances with other car makers on a global scale. Chrysler shopped a variety of other sources before it came to this conclusion and the government stepped in as the actor of last resort. It had to do it because the consequences would have been just too large to deal with."
In his 2008 op-ed, Romney said "without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses.
"Detroit needs a turnaround, not a check," the Republican presidential hopeful wrote on Nov. 18, 2008.
Marchionne vehemently disagreed.
"I think it was a phenomenal deal for U.S. taxpayers," he said. "When you look at the consequences of a failure of Chrysler as an entity, just to pick up the pieces of what would have been left, the impact of the supplier base, unemployment levels here in Michigan and other states, it would have been a real mess."
With an eye toward reelection, the president has begun touting the resurgence of the U.S. car companies in campaign speeches. The bailouts were initated under former President George W. Bush, but because he managed them, President Obama has borne the burnt of the criticism for them.
Friday, he visited a Chrysler plant in Toledo, Ohio to take full credit.
"What would it be like here in Toledo if you all didn't make these cars?" Obama asked. "You know, two years ago, we came pretty close to finding out."
Meanwhile, Romney said in an interview this week with CBS's Today Show that what ended up happening to Chrysler and General Motors is similar to the structured bankruptcy he was calling for his in his op-ed piece.
"When I wrote that the auto industry was asking for a bailout, we are unwise to send billions of dollars [to companies], instead - finally - the president recognized I was right, and finally took the company, in the case at General Motors, the company finally went through bankruptcy and went through a managed bankruptcy, came out of bankruptcy and is now recovering," Romney said in the interview.
Obama disagreed, saying Friday that he "could have done what a lot of folks in Washington wanted to do" when GM
and Chrysler were on the verge of collapse, "which is nothing."