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Published: Tuesday, 11/8/2011

Bailouts of Detroit automakers to cast shadow on GOP debate

ASSOCIATED PRESS

LANSING — The Republican presidential candidates scheduled to debate Wednesday in Michigan agree on at least one thing: They wouldn’t have helped bail out the Detroit automakers two years ago.

The issue is a potent one in Michigan, where the auto industry’s long slide stuck the industrial state in a decade-long economic slump that pushed the jobless rate past 14 percent after the financial meltdown hit in late 2008.

After getting government bailouts and going through bankruptcy, General Motors Co. and Chrysler Group LLC are making money and hiring again, points President Obama made last month during a stop at GM’s small-car assembly plant in Orion Township near Pontiac.

But all eight Republicans attending Wednesday’s debate at Oakland University in Rochester say they wouldn’t have offered government loans to save GM and Chrysler, whose sprawling Auburn Hills headquarters is just a short drive from the university’s campus 35 miles north of Detroit.

Former Massachusetts Gov. Mitt Romney, who won Michigan’s 2008 GOP presidential primary, explained during Detroit-area campaign stops in June that his opposition to the bailouts wasn’t about hurting the auto industry, but about keeping the U.S. taxpayer off the hook. “Some people believe in bailouts. I believe in the process of the law,” said Mr. Romney, whose father — George Romney — led American Motors before becoming Michigan governor in the 1960s. “The idea of just writing a check, which is what the auto executives were asking for, was not the right course. ... It would have been best had the auto companies gone through the bankruptcy process without having taken $17 billion from government.”

Obama Campaign Manager Jim Messina told reporters Monday in a conference call that Michigan voters will remember the Democratic President helped the faltering automakers, protecting middle-class jobs.

“Not only did the President extend the loan and restructuring packages that saved 1.4 million jobs up and down the auto supply chain, but he’s made investments in innovative technologies like advanced batteries that are creating jobs and new products to export from Michigan,” Mr. Messina said.

But Michigan GOP Chairman Bobby Schostak said many Republican voters see the federal bailout as a mistake, even though both GM and Chrysler have repaid most of the money and the government has been able to sell most of its investment in the two companies. He claims the federal government could have offered government loan guarantees and let the automakers go through a traditional bankruptcy.

“Don’t become the lender. That’s not the place for the federal government,” Mr. Schostak said.

Michigan Democratic Chairman Mark Brewer doesn’t buy the argument the automakers would have survived without the federal funds. He expects voters will be listening closely Wednesday to the 90-minute CNBC-sponsored debate to see what the GOP candidates say.

“It seems to me, issue No. 1 is for them to explain, as they hold a debate in the shadow of Chrysler headquarters — the building that now would be a vacant hulk if they all had their way — why they opposed the very successful rescue of the domestic auto industry,” Mr. Brewer said.

Michigan has the nation’s third-highest unemployment rate at 11.1 percent, well above the national rate of 9 percent. Four years ago, when GOP candidates gathered for a presidential debate in Dearborn, Michigan had the highest jobless rate among the 50 states: 7.4 percent.

The candidates want to make a good impression in Michigan, which will hold its GOP presidential primary Feb. 28, the same day as Arizona. Mr. Romney is expected to have an edge in his birth state, but it’s not a winner-take-all contest, so others could come away with Michigan delegates if they have a strong enough showing.

Many of the leading candidates are gearing up their Michigan campaigns with that in mind, even though Mr. Obama won Michigan by 16 points in 2008. The last Republican to win Michigan’s presidential contest was then-Vice President George H.W. Bush in 1988.



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