Dems seek political edge on GM, Chrysler rescues

What's good for General Motors and Chrysler could be good for President Barack Obama.

What's good for General Motors and Chrysler could be good for President Barack Obama.

With the two Detroit automakers rebounding after near-fatal bankruptcies, Democrats have started hammering Republican presidential hopefuls Mitt Romney and Tim Pawlenty for opposing the U.S. auto industry bailouts, and Obama, himself, is highlighting the turnarounds as an example of a tough — and unpopular — call he made that paid off.

The president and his Democrats sought political advantage from the Tuesday announcement that Chrysler had repaid most of the $10.5 billion in taxpayer money that saved the company from financial disaster just two years ago. GM previously announced that it had repaid a little more than half of the $50 billion it received in federal aid. And both have emerged from quick bankruptcies.

"Supporting the American auto industry required making some tough decisions, but I was not willing to walk away from the workers at Chrysler and the communities that rely on this iconic American company," Obama said in a written statement as he traveled in Great Britain. "I said if Chrysler and all its stakeholders were willing to take the difficult steps necessary to become more competitive, America would stand by them, and we did."

Back home, his top campaign surrogates underscored that message in a conference call that the Democratic National Committee organized to coincide with the Chrysler announcement.

"People are working today who would be unemployed if the president hadn't taken decisive action," said former Ohio Gov. Ted Strickland, a key Obama backer in an important battleground state.

On the call and in press releases, party officials highlighted the GOP's opposition to the bailouts, which occurred in Obama's first year as president.

In November 2008, Pawlenty, a former Minnesota governor whose home state includes a Ford Motor Co. truck plant slated for closure, opposed nationalizing the companies, arguing that it would create a "slippery slope" that would prompt other industries to seek bailouts. That same month, Romney, a former Massachusetts governor whose father, former Michigan Gov. George Romney, led American Motors from 1954-1962, said that the auto companies needed to restructure themselves and shouldn't receive a blank check. He said that if they received a federal bailout, "you can kiss the American automotive industry goodbye."

Noting such statements, former Michigan Gov. Jennifer Granholm said: "People really need to ask if that's the judgment we want in the Oval Office."

"If Mitt Romney and these other Republicans had their way, Michigan families and Midwestern families would have been left out in the cold and would have lost their jobs and their way of life," she added. "These voters aren't going to forget who stood with them when they needed it."

It's a preview of a difficult-decisions-paying-dividends strategy Democrats are likely to employ in the 2012 presidential campaign on other issues as well as they seek to put a positive spin on presidential policies that haven't sat well with the electorate — like the health care overhaul or the economic stimulus package — while drawing bright lines between Obama's actions in office and the statements of Republicans competing for the chance to challenge him.

Obama's steering of Chrysler and GM through bankruptcy, for one, is certain to become a common refrain when he promotes his economic record in Michigan, Ohio and other hard-hit Midwest states with large pockets of auto workers and large numbers of electoral votes he'll need to win re-election. It's unclear whether taxpayers will receive all their money back but proponents say Obama's efforts saved about 1 million auto-related jobs.

The two companies were on the verge of collapse in the final days of the Bush administration after Congress failed to approve an emergency loan package. Bush's administration gave the companies $17.4 billion in loans and required them to develop a restructuring plan by mid-February 2009.

Obama's administration pumped billions more into the car makers later that spring but won concessions from industry stakeholders, allowing them to push GM and Chrysler through bankruptcy court in the summer of 2009.

Many Republicans opposed the bailout — assailed as "Government Motors" — arguing that government should not have intervened in private industry. Many car dealers protested the efforts to shutter dealerships and some conservatives saw the bailout as a sellout to the United Auto Workers union. Bondholders and shareholders also complained that the bankruptcies wiped out most of their investments.

On Tuesday, Romney spokeswoman Andrea Saul said the Obama administration eventually followed the restructuring path her boss had recommended but that it should have acted more swiftly. "If they had done it sooner, as Mitt Romney suggested, the taxpayers would have saved a lot of money," Saul said.

Similarly defending his boss, Pawlenty spokesman Alex Conant said there was a need "to be honest about the fact that the federal government is out of control, and that we shouldn't be bailing out big businesses. President Obama is kidding himself if he thinks his policies have strengthened America's economy."


Ken Thomas can be reached at

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