Auto bailout sticks to GOP, Obama in Michigan

No matter who wins the Republican nomination, President Barack Obama has a ready-made issue to pound every time he visits Michigan, Ohio and Indiana: the bailout billions used, he'll say, to resuscitate General Motors and Chrysler.

And just as likely, the Republican nominee — be it Mitt Romney, Newt Gingrich, Rick Santorum or Ron Paul — will counter that the decision to open the U.S. Treasury to the auto industry was flat-out wrong.

"It will be the defining issue for candidates in Michigan," Democratic political consultant Bob Kolt said.

Obama has signaled his willingness to use the issue, bringing it up in his State of the Union address Tuesday and at previous stops in Michigan. And Romney continues to blast a bailout he openly opposed in 2008 when he called for a forced bankruptcy.

"It is unfortunate that the government first attempted a bailout, which was precisely as unsuccessful as he (Romney) predicted, cost taxpayers billions, and left the government improperly entangled in the private sector," Romney spokeswoman Amanda Henneberg said in an email to The News this week.

Political observers agree Michigan voters can brace themselves for a barrage of rhetoric on the auto bailout. The president will likely mention it during his stop today in Ann Arbor. And just Thursday morning, Obama ally and U.S. Sen. Carl Levin attacked Romney's anti-bailout position as "indefensible."

For traditional Democrats, many in unions, it'll be an easy sale. For most Republicans, the opposite argument will resonate. The key will be the independent Michigan voters, many of whom voted for Obama in 2008 as the economic crisis was unfolding.

"They just think different than partisan Republicans and partisan Democrats," Republican pollster Steve Mitchell said. He said independents won't be easily convinced the Obama administration saved the auto industry. "It is not a slam dunk at all."

All four of the remaining Republican candidates opposed the bailout.

In 2008, Romney wrote an article in the New York Times titled "Let Detroit Go Bankrupt." It angered many in his native state.

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

Gingrich, in 2008, said: "I believe that it would be a mistake for the taxpayers to be forced to bail out Detroit."

Paul called the bailouts "foolish and very damaging to the long-term economic health of our country," and Santorum also opposed the bailouts.

Nearly four years later, the recovery of the two auto giants is not changing many GOP minds. Romney is saying his approach was correct, and the Paul campaign reiterated his opposition in an email to The News.

Ultimately, GM and Chrysler filed for bankruptcy and shed billions in liabilities that helped improve their chances for survival. Romney, the son of a former Michigan governor who once headed American Motors, said the Obama administration should have forced the bankruptcy without offering the bailout.

"Events have proved Gov. Romney exactly right," Henneberg said. "As he said back in 2008, a managed bankruptcy was the right course for the automakers, and he is thrilled to see that they have successfully re-emerged from the bankruptcy process as he expected they would."

In a state that has been home to General Motors and Chrysler for decades, the conventional wisdom might be that everyone would support the bailout. But with billions left unpaid and with broader economic pain still slamming the state, Republicans won't concede an inch, said Stu Sandler, a Republican consultant.

"I think (the Republican nominee) will be happy to talk about the economy with Barack Obama," he said.

mwilkinson@detnews.com

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