Democrats continue to pounce on Republican presumptive nominee Mitt Romney’s claim that he can “take a lot of credit” for the comeback of the U.S. auto industry, given his strong opposition to the federal bailout of General Motors and Chrysler in late 2008 and early 2009.
President Obama is betting that the decision to give direct loans to the automakers, who are now doing well, many help politically in areas where suppliers to the auto industry employ hundreds of thousands of people, including Michigan, Ohio and western Pennsylvania.
“Mitt Romney has made a long list of absurd statements, but this may be at the top,” Michael Lamb, Pittsburgh city controller, said Wednesday on a conference call with reporters organized by the Obama campaign. “It’s tone deaf and blind to reality…He’ll say anything to get elected.”
At the time the plan was being put together in the George W. Bush and Obama administrations, Romney opposed the idea, arguing that GM and Chrysler should be reorganized under a managed bankruptcy process. “Let Detroit Go Bankrupt,” he wrote in an oft-quoted New York Times op-ed in 2008.
But on Monday, Romney claimed paternity of the auto bailout idea.
“My own view, by the way, was that the auto companies needed to go through bankruptcy before government help, and frankly that’s finally what the President did,” Romney said during an interview with WEWS-TV, the ABC News Cleveland affiliate.
Romney’s approach, however, would have relied on capital markets infusions of money into the two automakers rather than government loans. “We can’t forget what the financial market was like in December 2008 and January 2009,” Lamb said. “There was no private financing available.” Without government aid, he contended, the result would have been the “liquidation” of GM and Chrysler rather than reorganization.
Georgia Berner, president and CEO of the family-owned manufacturing firm Berner International in New Castle, Pa., said that the steps Obama took to help the auto industry had boosted demand for the air doors it makes and helped it maintain 60 jobs. General Motors is one of the firm’s customers, she said.
“A few years ago the auto industry dropped off the radar, they disappeared for us,” Berner said. “I did not initially support the (bailout) decision, but it turned out to be a good decision.”