LaHood defends Obama's handling of auto bailouts

Transportation Secretary Ray LaHood said Monday that President Obama's insistence on helping the U.S. auto companies was the key to the industry's turnaround.

LaHood was in Detroit, which is home to Ford, Chrysler and General Motors, for the North American International Auto Show. The Detroit Free Press reported that while he was there, he stood up for the Obama administration's decision to use government money to bail out Chrysler and GM in 2008 and 2009.

"Each of the Detroit automakers is yielding a profit for the first time since 2004," the newspaper reported LaHood said. "Each gained market share last year for the first time since 1988."

Since they were offered by former President George W. Bush in 2008 shortly after the election of President Obama, the auto bailouts have emerged as a hot political issue between the parties. Republicans accused Obama of being a socialist who wanted to take over the auto industry, derisively referring to General Motors as "Government Motors." Democrats countered that Obama stood fast in the face of GOP criticism to save the city of Detroit, which relies heavily on the auto industry, from ruin.

Republican presidential front-runner Mitt Romney penned a widely cited op-ed for the The New York Times in the fall of 2008 that argued against assisting General Motors and Chrysler titled “Let Detroit Go Bankrupt.”

Democrats have made clear they think Obama's stance will contrast favorably to Romney in Midwestern swing states in a hypothetical general election matchup between the two. The president himself has said in stump speeches that "could have done what a lot of folks in Washington wanted to do" when GM and Chrysler were on the verge of collapse, "which is nothing."

LaHood tried to drive that point home Monday, saying in Detroit according to the newspaper report that the auto industry "will create 60,000 jobs next year."

---