Dems see Romney vulnerability on autos

Democrats think Mitt Romney’s opposition to the auto bailouts could help President Obama beat him in a general election.

While the bailouts are unpopular with GOP primary voters and the nation as a whole, the administration sees the auto industry as a bright spot on the president’s economic record, given a surge in U.S. auto sales. Companies have also been hiring workers and adding shifts.

The White House thinking is that Obama’s decision to help the auto companies — and to impose tough terms on their refinancing, including the forced resignation of GM CEO Rick Wagoner — will be popular in Michigan and other rust-belt swing states.

{mosads}The administration thinks this issue could particularly hurt Romney because he strongly opposed the auto bailout, even after backing the bailout of the nation’s banks under the Troubled Asset Relief Program.

In the fall of 2008, Romney wrote a widely read op-ed in The New York Times titled “Let Detroit Go Bankrupt.” Romney argued that helping the companies when they were on the verge of going bankrupt would be worse for them in the long run than the consequences of bankruptcy itself.

“If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye,” Romney wrote. “It won’t go overnight, but its demise will be virtually guaranteed.”

Chrysler and General Motors eventually did get a government bailout. Ford did not take government money but supported the bailout for the other two companies.

The op-ed received a lot of attention because of Romney’s family history in Michigan. Romney’s father, George Romney, is a former Michigan governor who was the CEO of American Motors, which he helped turn around in the 1950s and early 1960s.

Democratic strategist Jamal Simmons said Obama will do everything he can to remind voters in recession-racked states like Ohio and Michigan of the op-ed if Romney is the GOP nominee.

“Romney’s approach was to let them go bankrupt,” Simmons said in an interview with The Hill. “He wanted them to have an orderly bankruptcy, which was impossible given where the credit markets were in 2008.

“That’s going to very helpful to the president in Michigan, Ohio and Wisconsin, states where there are a lot of parts suppliers,” he said.

The auto bailout hasn’t been discussed much in this year’s GOP debates, though in last week’s debate in New Hampshire, Romney stood by his criticism.

“Should they have used the funds to bail out General Motors and Chrysler?” he said. “No, that was the wrong source for that funding.”

In the same answer, Romney defended the much-aligned assistance to the banks through the TARP program — a comment that could become controversial given the ongoing Occupy Wall Street protests across the country against economic inequality.

“But this approach of saying, look, we’re going to have to preserve our currency and maintain America — and our financial system is essential,” he said.

Simmons said one reason Republican candidates might not be talking a lot about the auto bailout, as opposed to the bailout of banks, is the Michigan primary, which is likely to take place in February next year.

Simmons said Romney could survive the bailout remarks in a GOP primary, but his words could come back to haunt him in a general election.

“He’ll do fine in the primary,” Simmons said. “But in the general election, it’s a killer.”

Obama has made clear he sees his support for the auto industry as a political winner and is making it a central part of his campaign argument.

“One of the first decisions I made as president was to save the U.S. auto industry from collapse,” Obama said during a speech last week at a General Motors plant in Orion Township, Mich.

“Today, I can stand here and say the investment paid off,” Obama continued. “The hundreds of thousands of jobs saved made it worth it … taxpayers are being repaid, and plants like this are churning out groundbreaking fuel-efficient cars like the Chevy Sonic.”

Earlier this year, General Motors and Chrysler announced they were paying the federal government back for their loans, though critics noted the U.S. was unlikely to recover its outstanding $1.9 billion investment in Chrysler and its investments in GM beyond the $6.7 billion loan it gave the company.

A failure by GM and Chrysler to repay the government could hurt Obama with voters upset about government help to the private sector.

Perhaps with that in mind, conservatives rallied last month around a Ford commercial that played up the fact that the company had not accepted a bailout.

“I wasn’t going to buy another car that was bailed out by our government,” a Ford customer said in the commercial. “I was going to buy from a manufacturer that’s standing on their own, win, lose or draw. That’s what America is about.””

The White House was accused of pressing Ford to pull the ad, which both the company and the administration denied.

Republican strategist Al Cardenas said the sentiments of that commercial could resonate with voters next year, even in states with a heavy auto company presence.

“The response (from Romney or one of the other Republicans) is going to be Ford Motor Co. proved they didn’t need your help,” Cardenas said in an interview with The Hill.

Obama does not seem to think it will be so easy to counter — last week, he cast his decision as an unpopular but tough decision that is paying off. He said the success the companies have experienced in 2011 would not have happened if Romney and other Republicans’ advice had been followed.

“There were a lot of politicians that said it wasn’t worth the time or wasn’t worth the money, and some still say that,” he said in his speech in Michigan. “They should come tell that to the workers here, because two years ago it looked like this plant was going to shut its doors … and I refused to let that happen.”