Romney Takes Credit for Auto Industry Turnaround, Reignites Bailout Debate

May 8, 2012 12:32pm
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LANSING, Michigan – Just hours before making his return to his native state of Michigan where he will deliver a speech at a local university here, Mitt Romney reiterated his claim that he should be given credit for the resurgence of the auto industry, reigniting the debate over how the auto industry should have been helped and inviting criticism from Democrats, one of whom dubbed the claim a “new low in dishonesty.”

“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 ABC News’ Cleveland affiliate WEWS on Monday.  ”He took them through bankruptcy. That was the right course I argued for from the very beginning. It was the AW and the President that delayed the idea of 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, so I’ll take a lot of credit for the fact that this industry’s come back,” Romney told WEWS.

President Obama’s National Campaign Co-Chair – and member of the “Obama for America Truth Team” – former Ohio Gov. Ted Strickland responded to Romney’s claim, writing in a statement, “Mitt Romney may think he can fool the American people by hiding his belief that we should ‘let Detroit go bankrupt,’ but the American people won’t let him. His comments today that he will ‘take a lot of credit that the [auto] industry has come back’ are a new low in dishonesty, even for him.”

“At the time the loan was extended, auto industry leaders were saying that they couldn’t keep the industry alive without a lifeline from the federal government,” said Strickland. “And so, the President did something politically unpopular at the time and he gave them a lifeline to restructure and because of his decision to do so, the industry is prospering and spurring growth across the nation.”

Romney has suggested before that the managed bankruptcy that the auto giants went through was his own idea, and did so explicitly in his controversial 2008 New York Times oped titled, “Let Detroit Go Bankrupt,” in which he argued that a so-called “managed bankruptcy” would have resulted in a faster turnaround.

The auto bailout was funded with Wall Street bailout funds and begun under the Bush administration. Romeny’s 2008 oped opposing it hasn’t always played well with Michigan residents, many of whom were relieved to see the industry saved, regardless of the means in which it was done.

But Romney has not backed down from his 2008 position. Just a a few days prior to the Michigan primary earlier this year, he wrote another oped in the Detroit News that echoed many of those same messages.

“Managed bankruptcy may sound like a death knell,” Romney wrote in the February piece. “But in fact, it is a way for a troubled company to restructure itself rapidly, entering and leaving the courtroom sometimes in weeks or months instead of years, and then returning to profitable operation.”

“In the case of Chrysler and GM, that was precisely what the companies needed. Both were saddled with an accumulation of labor, pension, and real estate costs that made them unsustainable,” wrote Romney.

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