Auto/Economy
2:06 pm
Thu June 9, 2011

Was Mitt Romney wrong about the auto industry?

Mitt Romney's visit to Michigan has sparked a debate over his views on the federal bailouts of the auto industry.

Democrats have been working to make political hay out of statements Romney made prior to, and after the restructuring of GM and Chrysler under Chapter 11 bankruptcy - restructuring that was made possible with loans from the U.S. and Canadian governments.

On his Facebook page, Congressman John Dingell said he "hopes Governor Romney has answers for Michigan's working families he abandoned two years ago when the American auto industry was in its worst crisis ever."

In 2008, Romney wrote an opinion piece in the New York Times titled "Let Detroit Go Bankrupt."

Two and half years later, with Chrysler and GM rising from the ashes, the title of his opinion piece makes it look as though he was wrong.

The Democratic Party put out this video attacking Republicans, including Romney, for their stance on the auto industry bailouts. The title of Romney's opinion piece is heavily featured in the video - (the video includes a soundtrack with dark, foreboding music for the Republicans, and happy music for the Democrats).

But in the opinion piece, Romney argues for a plan that was similar to the plan ultimately adopted by the Obama Administration.

It led the Romney campaign to recently say that "Mitt Romney had the idea first."

This from a May article in the New York Times:

Eric Fehrnstrom, a Romney spokesman [said] “You have to acknowledge that. He was advocating for a course of action that eventually the Obama administration adopted.”

But Mr. Fehrnstrom also accused Mr. Obama of wasting billions of dollars “propping up” the auto companies as part of the government’s restructuring plans for the industry.

“Mitt Romney argued that instead of a bailout, we should let the car companies go through a restructuring under the bankruptcy laws,” Mr. Fehrnstrom said.

In a blog post published yesterday, titled Mitt Romney Waffles on Cars, Steven Rattner, who worked in the Treasury and led the Obama administration’s efforts to restructure the auto industry, said Romney's points in his 2008 opinion piece were "eerily similar to the plan that President Obama’s Auto Task Force ultimately designed" (Rattner went on to say that several details of the plan ended up being constructed differently).

Rattner said the opinion piece showed that Romney was "for President Obama’s rescue of the auto companies before he was against it."

Rattner said a "restructuring under bankruptcy" is exactly what President Obama did.

From Rattner's blog post:

Apparently, Romney would bridge the seeming contradiction by arguing that General Motors and Chrysler would have gone through their “managed” bankruptcies without any interim support from Washington (although with the aforementioned loan guarantees upon exit). That, at least, doesn’t reflect flip flopping on Romney’s part; it reflects pure ignorance. By late 2008 the two companies were flat broke and absent government support by Presidents Bush and Obama, would have closed their doors and liquidated, costing the industrial Midwest one or two million jobs. If that’s the Romney plan, it’s a good thing that neither President bit.

In his recent swing through Michigan, the Associated Press reported that Romney said he loves the auto industry and American cars:

Speaking during a Thursday morning campaign swing in Detroit and a nearby suburb, the Michigan native defended his opposition to bailing out General Motors and Chrysler two years ago. He says they needed to go through bankruptcy as they did but shouldn't have gotten the federal bailout.

So what do you think of Romney's stance on the auto industry? Could the auto companies have gone through bankruptcy without the government loans?

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