Since General Motors and Chrysler announced last year that they were paying the federal government back for their loans, Obama and his reelection campaign have tried to turn the once-unpopular auto bailouts into a political winner for the president. The turnaround story will play well, they argue, in economically hard-hit Midwestern states Obama has traditionally struggled to earn voters’ support in.
Critics of the bailouts note the United States 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, but Obama declared in his State of the Union address Tuesday night that “the American auto industry is back.
“We bet on American workers,” he said in the State of the Union. “We bet on American ingenuity.”
Obama struck similar themes Wednesday in his speech in Cedar Rapids, Iowa.
“We stood to lose a million jobs,” he said. “Not just in the auto industry, but all the suppliers, all the related businesses. So I refused to let that happen.”
Obama also contrasted his handling of the auto bailouts with former President George W. Bush’s, saying, “[k]eep in mind, that the administration before us, they had been writing some checks to the auto industry with asking nothing in return.
“It was just a bailout, straight — straightforward,” he said of Bush.
“We said we’re going to do it differently,” he continued. “In exchange for help, we also demanded responsibility from the auto industry. We got the industry to retool and to restructure. We got workers and management to get together, figure out how to make yourselves more efficient.”
The most likely star of the clips, Obama said Wednesday, is former Massachusetts Gov. Mitt Romney, who is one of the leading contenders for the GOP presidential nomination. Obama and other Democrats have targeted Romney for his 2008 op-ed in The New York Times in which Romney argued against the federal government assisting General Motors and Chrysler, and they promise more fire on the issue if Romney is ultimately the GOP nominee.
The article was titled “Let Detroit Go Bankrupt,” and in it Romney said giving the auto companies financial assistance in 2008 would be worse for them than allowing them to go bankrupt.
“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 in the article. “It won’t go overnight, but its demise will be virtually guaranteed.”
Romney has since defended his position, saying that the conditions that were eventually placed on the federal government's assistance by the Obama administration mirrored his proposals.