'Meet the Press' transcript for Dec. 14, 2008

GOV. GRANHOLM:  ...collection of things that caused this.

MR. GREGORY:  Well, you actually had some very strong comments about this during an interview on WJR radio in which you talked about why this failed. Let's listen to that.

(Audiotape, Friday)

GOV. GRANHOLM:  What do we elect these people in Congress for if not to protect our citizens?  And all they have been doing, the Republicans in the Senate have been protecting the foreign companies that are in their borders. They're not acting as Americans.

(End audiotape)

MR. GREGORY:  Not acting as Americans.  That's pretty tough language.

GOV. GRANHOLM:  Well, why are other countries helping their auto industry right now?  It's because they see it as a critical national need.  We have a national need in this country--it's not like any other industry.  The auto industry is going to be the industry that enables us to be independent of Middle Eastern oil.  This is a--the industry that's going to lead us to the electric vehicle, to energy independence.  So if we don't have an auto industry that's, that's an American, domestic auto industry, not only does it mean three million jobs lost, not only does it mean that we're going to have to pay the costs of the cleanup of the fail of the bailout--which is, by the way, about $150 billion to the taxpayers, because you'll have more people on unemployment, more people needing health care and all of that.  So not only will you have that, but you also will not have the ability to have an industry that leads us to energy independence.  We'll be replacing our reliance on foreign oil with the reliance on foreign batteries, because it's the battery that's going to be driving the electric vehicle in the future.

MR. GREGORY:  Governor Romney, you, you've been outspoken about this as well, and you've got some personal experience with this.  Your father, of course, an auto executive.  You came out against a bailout.  Are you glad to see that it stalled?

FMR. GOV. MITT ROMNEY (R-MA):  Well, I, I am glad to see that the proposal that was made by the chief executives of the Big Three didn't get accepted. They basically came to Washington saying, "Give us, give us a check so we can continue to fund business as usual." Look...

MR. GREGORY:  Fourteen billion dollars is what they were, what they were...

GOV. ROMNEY:  Well, and originally they wanted a lot more than that.

MR. GREGORY:  Right.

GOV. ROMNEY:  And I'm glad to see there was some progress made over the, the ensuing weeks.  But, frankly, I think all Americans agree that we want a domestic automobile manufacturing sector.  We don't want to see this go away.

MR. GREGORY:  Mm-hmm.

GOV. ROMNEY:  We don't want to lose those jobs.  And we believe, the long term, it's important for General Motors, Ford and Chrysler to survive, to grow, ultimately to thrive and create more jobs.  The question is what's the best way to do that?  Right now, those companies suffer about a $2,000 per automobile cost disadvantage.  Part of that is labor, part is benefits and part is a legacy cost associated with retirees.  As long as that $2,000 disadvantage is on their back, they can't be competitive.  They'll keep losing share, they'll ultimately find themselves, frankly, being potentially liquidated down the road.  So let's get rid of that cost disadvantage.  And I think the reason that Republican senators stood up--and by the way, business executives like Jack Welch stood up and said, "You know what, this may require bankruptcy or something like a, a very powerful czar that could step in and change those contracts, change some of those burdens, get the costs down." If you do those things, we can make these companies competitive long term, they can be successful, they can beat back Toyota, Honda and Nissan making cars right here in the U.S. at a $2,000 cost advantage they have.  We've got to, we've got to make sure...

MR. GREGORY:  Do you want to respond to that quickly, and then...

GOV. GRANHOLM:  Wait.  Let me just jump in quickly because one of the reasons why there is a cost disadvantage is because other countries provide health care for their citizens.  In America, we put that entire business on--burden on business.  Lee Scott's on this--in this conversation.  He has come to the National Governor's Association and said if you want to make us competitive, let's have a uniquely American solution to the cost of health care.  That will significantly reduce that disparity between the U.S. and other countries in terms of competitiveness of the auto industry.

GOV. ROMNEY:  Dave--David, that's a, that's a nice point except it doesn't relate to the companies from overseas that are making cars...

GOV. GRANHOLM:  It's relates entirely to the legacy costs.

GOV. ROMNEY:  ...making cars here, that are making cars...

GOV. GRANHOLM:  You know that.

GOV. ROMNEY:  Hold on just a moment.  That are making cars right here in the U.S.

MR. GREGORY:  All right.  Let's...

GOV. ROMNEY:  The companies across the ocean have come here, made plants in the U.S.--Nissan, Toyota and Honda.  They're able to make cars...

GOV. GRANHOLM:  I hope...

GOV. ROMNEY:  ...at $45 an hour, labor costs plus benefits and legacy costs.

MR. GREGORY:  All right, let me...

GOV. ROMNEY:  Our cost is $73 with...

GOV. GRANHOLM:  It is not!  That is--that has been totally--Mitt Romney, now, you know that...

GOV. ROMNEY:  ...with--I'm sorry.

GOV. GRANHOLM:  ...because it's not...

MR. GREGORY:  I want to break, I want to break in here because this debate, this debate will go on.

GOV. ROMNEY:  Labor costs, labor costs, legacy costs--labor costs and legacy costs and benefits are $73 an hour.

GOV. GRANHOLM:  That's not accurate.

MR. GREGORY:  This part of the debate's going to go on.  I want to bring Eric Schmidt in here.  You have said, as CEO of Google, that innovation will power us out of almost everything.  And, Carly Fiorina, that's something that you agree with.  Even the GM letter this week saying that, "We acknowledge we have disappointed you," the ad said this week.  "At times we violated your trust by letting our quality fall below industry standards and our designs have become lackluster." They failed in the innovation game.  Isn't that behind the failure of the bailout?

MR. ERIC SCHMIDT:  But they can fix that, because America is a place where innovation drives huge business outcomes.  It drives job creation, it pays our taxes, it has created the wealthiest society on Earth.  We forget, in the middle of all this doom and gloom, that we have the strongest universities, the most creative people, people coming all around the world to come here. There's every reason to think that we can take the money the federal government's going to provide in this stimulus anyway and solve our fundamental energy and transportation issues relatively quickly, and with American jobs and with American expert-oriented industries.

MR. GREGORY:  Lee Scott, you're stepping down as CEO and president of Walmart.  It's been suggested by some hometown press that you might like to take over one of the auto companies.  Is that something you're thinking about?

MR. SCOTT:  No, it isn't anything that's crossed my mind at, at this point. The great thing is I'm a retailer.

MR. GREGORY:  Mm-hmm.

MR. SCOTT:  And, and I've, I've got a feeling that this is a lot less complex business than what you're talking about.

MR. GREGORY:  How so?

MR. SCOTT:  Well, in our business we're focused on customers, we're focused on everyday needs of middle-class America, working people.  And so what we are is in touch with what's happening out there in this economy on an everyday basis.  An example would be we're seeing right now these Walmart moms, they're spending their money against their children's needs and their family's needs and deferring their own purchases.  We're seeing people buy more and more food, particularly frozen food.  In our Sam's Clubs, we're seeing the small business, particularly the restaurant owner, who's visiting the club multiple times a week as yesterday's cash flow allows them to purchase...

MR. GREGORY:  Mm-hmm.

MR. SCOTT:  ...for tonight's business.  So that's the business we're in is everyday real life, real people kind of business.

MR. GREGORY:  Let, let, let's do that, and Carly Fiorina I want to bring you into this.  But I want to share some information.  As we pull back and look at the broader economy, we've compiled some statistics that we, we think are revealing.  Look at the economy compared to a year ago.  You look at the Dow, down 35 percent.  It was up over 13,000, now it's at 8630.  Unemployment is up two full percentage points, 43 percent increase.  That's two million jobs that have been lost in a year.  Home foreclosures up 28 percent.  This is how the Associated Press reported on the employment picture this week.

"Employment shrank in virtually every part of the economy - factories construction companies, financial firms, accounting ...  [and] retailers.  ... The United States - already in recession for a year, may not be out of it until the spring of 2010 - making for the longest downturn since the Great Depression of the 1930s, economists are now saying."

This also struck me, Ms. Fiorina.  During the Depression, 1933, there was 25 percent unemployment.  That was about 11 million workers.  At 6.7 percent unemployment, we're already talking about 10.3 million workers because the work force is so much bigger now.  Are we actually headed for a depression?

MS. CARLY FIORINA:  I don't think so.  But I think all of those statistics are an important reminder.  While we have been focused in Washington on big companies...

MR. GREGORY:  Mm-hmm.

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