Romney: Auto bailout enriched unions

WASHINGTON -- President Obama used the bailout of U.S. automakers to enrich union supporters, marring the industry's recovery, Republican presidential candidate Mitt Romney said Tuesday in an op-ed column in the Detroit News.

As part of Mr. Obama's plan to save Chrysler Group LLC, the United Auto Workers' trust fund received a 55 percent stake in the Auburn Hills, Mich.-based company while Chrysler's secured creditors got "short shrift," Mr. Romney wrote.

Mr. Romney, whose father, George, was president of the former American Motors Co. from 1954-62, also said the Obama Administration should sell government-owned shares of General Motors Co. and turn the profit over to taxpayers.

"The President tells us that without his intervention things in Detroit would be worse," Mr. Romney wrote. "I believe that without his intervention things there would be better."

Mr. Obama has made the taxpayer bailout of Detroit-based General Motors and Chrysler, which is majority-owned by Fiat SpA, a theme in his re-election campaign. Mr. Romney is vying for support in Michigan's presidential primary on Feb. 28, seeking to fend off a challenge from Rick Santorum in the Republican race.

In his article, Mr. Romney described Steven Rattner, who headed the government's auto task force, as a "politically connected and ethically challenged Obama-campaign contributor" whose role in managing the bailout was part of "crony capitalism on a grand scale."

Mr. Rattner, in an interview, called the column "one of the most remarkable pieces of retroactive hallucination that I've seen in a while." He said that without the action Mr. Romney decried, the car companies would have died.

Mr. Rattner said the "managed bankruptcy" Mr. Romney advocated instead of a government rescue package wouldn't have been possible, and he contended that the Obama Administration demanded more concessions than George W. Bush's Republican administration had sought when the first round of bailout loans for automakers was approved in late 2008, while Mr. Bush was still in office.

"We asked for more sacrifice from the stakeholders than the Bush administration had asked," said Mr. Rattner, who is now with Willett Advisors.

Michigan Democrats said Mr. Romney's approach would have worsened the state's economic downturn.

"The Romney path would have meant the end of one and perhaps two of our major industries," U.S. Rep.Sander Levin told reporters on a conference call sponsored by the Democratic National Committee. "He can't have it both ways. There was no private entity to provide the financing."

Mr. Romney, who was born in Michigan, is "pandering to a national audience," said former Michigan Gov. Jennifer Granholm. "He comes from Michigan and he knows better," she told reporters. "The bailout worked."

Automakers are increasing production after U.S. light-vehicle sales rose at least 10 percent for two straight years for the first time since 1984.

GM announced last month that it had regained the title as the top-selling global automaker, which it lost to Toyota Motor Corp. as GM slid into bankruptcy.

The column by the former Massachusetts governor was published a day after the release of two surveys showing him running behind Mr. Santorum, a former Pennsylvania senator, in the Michigan primary.