Political opponents of Republican presidential candidate Mitt Romney blasted him today for claiming credit for the auto bailout pursued by Democratic President Barack Obama in 2009.
The issue of the auto industry rescue by taxpayers could prove pivotal in Ohio, which has many car, truck, and parts plants, and which is crucial for Mr. Romney to carry in the Nov. 6 election if he hopes to win the presidency.
“The same guy that wanted the auto industry to go under wants to take credit now that it’s back on top, and that’s just incredible,” said Ted Strickland, former Ohio governor and national co-chair of Mr. Obama’s re-election campaign, in a telephone conference call.
The Democratic backlash came a day after Mr. Romney said on a Cleveland television news program that Mr. Obama followed his advice to put the ailing automakers through managed bankruptcy.
But he said that President Obama and the UAW “delayed the idea of bankruptcy.”
Mr. Strickland and Bob King, president of the United Auto Workers union, said Mr. Romney was trying to rewrite history.
Under President Obama, the federal government extended $82 billion in loans and stock purchases to GM and Chrysler, enabling the two to go through bankruptcy reorganization, return to work, and ultimately return to profitability. Most of the money has been repaid.
“The statement is tone deaf and blind to reality,” Mr. King said. “The credit markets didn’t just tighten up, they were frozen solid. There was absolutely no debtor in possession financing. Without government financing behind our companies it would simply have led to a chapter seven liquidation,” Mr. King said.
“Mitt Romney cannot have it both ways. Saying he was for managed bankruptcy without a funding source is like saying he was for medical treatment without any medicine,” Mr. King said.
By contrast, he said Mr. Obama was concerned about workers and took a political risk in backing the industry recovery.
Mr. Romney said in an interview with a Cleveland news station Monday that Mr. Obama followed his recommendation to let General Motors and Chrysler Group LLC go through a managed bankruptcy.
“I pushed the idea of a managed bankruptcy, and finally when that was done, and help was given, the companies got back on their feet,” Romney said in an interview while he was in the Cleveland area for a town hall meeting inside an auto parts factory. “So, I’ll take a lot of credit for the fact that this industry has come back.”
Mr. Romney and his supporters have said that Mr. Romney would have supported government guarantees of private financing, instead of a “bailout check,” which is what Mr. Romney prescribed in his Nov. 18, 2008, guest column in the New York Times, titled (by the newspaper’s editors) “Let Detroit Go Bankrupt.”
Critics said that even President Bush extended bridge loans to GM and Chrysler because of the lack of bank and investor financing during the financial crisis of 2008 and 2009.
In his guest column, Mr. Romney said the domestic auto industry was weighed down by labor costs that were not competitive compared with the market and by failed management.
“Managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs. The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk,” he wrote.
Mr. Strickland called Mr. Romney a hypocrite, and cited other examples of what he said were Romney lies.
In response to Mr. Strickland and Mr. King’s comments, Romney Ohio campaign spokesman Christopher Maloney said, “considering last week’s poor jobs report, it’s no surprise that President Obama’s allies are resorting to false and misleading attacks in an attempt to distract Ohioans from the president’s failed record.
“Mitt Romney proposed the right course for the auto-makers — a structured bankruptcy process to allow them to emerge as sustainable and profitable enterprises. We deserve better from our president than phony attacks designed to cover up record-high unemployment, falling incomes and out-of-control spending and debt,” Mr. Maloney said.
Contact Tom Troy at: firstname.lastname@example.org or 419-724-6058.