If that is the case, I essentially agree with you.

It also means that US jobs aren’t - in the foreseeable future at least - threatened by Ford and GM being replaced by Honda and BMW, so why even worry about it, much less bail them out?

I’m still a bit skeptical of the ‘blame the unions’ rhetoric though. It’s not as though Ford couldn’t try to hire more nonunion workers.

The reason that, for the same price, Detroit produces a lower quality product than Toyota is that it pays higher salaries and gives more benefits to its employees. Thus, of the money you pay for that car, more goes to the worker and less goes to the car itself. These higher salaries and benefits were pushed for by unions, even though they make the Detroit auto makers less competitive. Romney is arguing that the tax payer should not be on the hook for this poor business decision.

Furthermore, you assume that BMWs, Toyotas, Nissans, etc, are built in Germany and Japan. A majority of “foreign” cars are actually built in America by non-union workers, because labor costs in their home countries are too high due to, you guessed it, strong unions.

It sounds to me like this is an argument specifically about the relative quality of two categories of product, followed up by blaming unions for the fact that one is lower quality. I don’t really feel like making an argument about the overall efficacy of unions, but I think in this specific instance unions are a scapegoat for a problem (the relative success of foreign cars) that cannot be explained by the presence of unions (since foreign labor is even more unionized).

If that is the argument, I’m not sure it is congruent with reality. Japan and Germany both have more unionized workforces than the US.