NLPC Associate Fellow Mark Modica was a guest Wednesday night on Fox Business Network’s Willis Report. Here’s a transcript:
Gerri Willis: Tonight growing concerns that many US manufacturing jobs are at stake. Take a look at this Romney campaign ad slamming President Obama.
Romney Ad: Obama took GM and Chrysler into bankruptcy and sold Chrysler to Italians who are going to build Jeeps in China. Mitt Romney will fight for every American job.
Gerri Willis: And the left came out swinging today claiming that the ad is inaccurate including Joe Biden who today called it quote flagrantly dishonest. But my next guest says Romney has it right. Here to explain is Mark Modica, Associate Fellow for the National Legal and Policy Center. Great to have you back Mark.
Mark Modica: Hi Gerri.
Gerri Willis: Always a pleasure to have you on the show. You know this all came out of a report in Bloomberg.
Mark Modica: Right.
Gerri Willis: Let me read you what they wrote and get your response. They wrote to counter the severe slump in European sales Fiat CEO Sergio Marchionne is considering building Chrysler models in Italy, including Jeeps, for export to North America. Now is that true or is that false?
Mark Modica: That is absolutely true. Prior to that there was a Bloomberg report that did say that Fiat was going to be building Jeeps in China – possibly all Jeeps. So that is where Governor Romney got that information. Now there was one slight inaccuracy on the Romney ad where he said the Obama Administration sold Chrysler to the Italians. He didn’t. He gave it to them. The only thing Fiat paid up front was some technology they transferred. They didn’t even pay any money for it.
Gerri Willis: So you are saying.
Mark Modica: Then they did go on to buy a majority stake.
Gerri Willis: So you are saying that possibly the ad is too kind?
Mark Modica: It is. It is true. The China part of it is true. But was was a little unclear was the original Bloomberg article said that they might build all Jeeps in China. That doesn’t appear to be true. They are going to build some Jeeps for the Chinese market. But there is still a risk that they are going to export these things. The Italian story is probably a little more concerning because they need to get some cars built in those factories that are under-utilized in Italy. And during the conference call Sergio Marchionne, the CEO for Fiat made clear that they want to be building Jeeps in Italy. Now this story is about to become more complicated.
Gerri Willis: Come on now. You know I hear you say that and as an American I think, Jeeps in Italy. Really? Are we going to move our production there? I meant that makes no sense to me. Are these Jeeps going to be sold in the US?
Mark Modica: They are saying that they want to export them. In fact Marchionne is negotiating with the Italians to get tax rebates on the exports to help them export to America.
Gerri Willis: Arrgh.
Mark Modica: Now they are going to say yeah, you know they are still going to build Jeeps and Chryslers here. This is a new Jeep. This is going to be a new smaller Jeep. It is going to be sold in Europe, but also exported here. So just because it is a new Jeep, people are going to be apologists and say oh well that is a new one, they don’t have to build that one here, that is a new vehicle they can build that one over in Italy. But you know these are potential jobs lost. The care could have been built here. The care could have been built here and exported, instead of built in Italy and exported here. So absolutely a truthful ad by Romney and you know it is very clear from the Bloomberg article and the conference call. Another thing on that conference call that I noted and I wrote about on the NLPC.ORG website today. Marchionne said the benchmark to outsource Chryslers and Jeep should be a savings of at least one dollar.
Gerri Willis: Gasp.
Mark Modica: Chrysler should pay to produce these cars elsewhere if the savings are at least one dollar.
Gerri Willis: Come on.
Mark Modica: It is clear they are considering it. So for now it is just a few cars, but you know what happened was we gave an American company to the Italians. We have to expect that Fiat has an obligation and loyalty to its own citizens, to its investors and if they want to protect their manufactures there.
Gerri Willis: We have got to keep jobs in this county. You know, Mark. That is my bottom line. And if you want to save your dollar, go save somewhere else. Mark thanks for coming in.
Mark Modica: No problem.
Gerri Willis: Really appreciate your help. I obviously could go on and on. I was listening to you for a long time. Thank you. I appreciate it.
Mark Modica: Thank you.