Is auto bailout Romney's Achilles' heel?

LAKE ORION, MICHIGAN - Brad Glende is a team leader on the assembly line at the General Motors plant in Orion, Michigan. He is one of 1,800 workers at a plant that stood idle two years ago during the depths of the economic downturn. Now the plant north of Detroit churns out 800 cars a day on two shifts, and Glende credits the federal government bailout of GM.

"Morale is fantastic. People are really glad to be back to work and building a great product," Glende said during a CBS News visit to the plant this week. His previous manufacturing job with the company disappeared four years ago when the GM plant in Janesville, Wisconsin, closed.

"I had to pack up my family, and we moved over here to Michigan. I didn't know what to expect," said Glende, who has worked at GM for 16 years. "'Would the company survive?' 'Am I gonna have a job?' 'Do I want to continue my career with GM?'"

Because he did, like all GM employees, Glende will receive a $7,000 bonus next month as part of the company's profit-sharing plan. The automaker this week reported record annual profits of $7 billion in 2011.

At Orion, where 500 small Chevrolet Sonic sedans and hatchbacks and 300 Buick Veranos roll off the assembly line daily, plant manager Steve Brock credits the Obama administration's emergency financing - around $80 billion in loans to the industry in 2009.

"The support of the government is much appreciated by all of us in General Motors," Brock said in an interview. "It enabled us to comeback, and we're gonna work hard each and every day to prove the point that it was worthwhile and a good thing to do for the people here within General Motors and also the U.S."

Still, some business and political leaders opposed it, like Mitt Romney, who was contemplating another presidential run at the time. Romney, a Detroit-born son of an auto company CEO who became a Michigan governor, penned a November 2008 Op-Ed in the New York Times declaring "You can kiss the American automotive industry goodbye" if the government bailout went through. "Its demise will be virtually guaranteed," Romney wrote.

Glende said, "I'm glad the Obama Administration didn't listen to them, you know. I think there's a lot of job opportunities that would have been lost."

Bill Jennings, a United Auto Workers representative who spend 17 years in the GM paint shop, says the profit sharing will pay dividends beyond the Orion plant.

"I'm able to put my daughter through college, because I have a job. Central Michigan University has another student. And it goes on and on," Jennings said. "It worked for our community, our plant, our state, and many other states."

Automakers have added 14,500 jobs in Michigan since 2009, according to Michigan's Department of Technology, Management, and Budget. Each auto job is believed to support another nine jobs in the state, according to the Center for Automotive Research, in Ann Arbor.

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"I don't think it's just the engine for Michigan. I think it's the engine for the country," said Dwight Carlson, the CEO of Coherix, an Ann Arbor-based company that makes machines that let manufacturers check parts and their assembly with three-dimensional imagery. Automakers are the source of half his revenue.

"Had General Motors and Chrysler had gone out of business, they would have taken the supply base out, and they would have taken Ford Motor Company out also," Carlson said. "It was critical to keep those companies in business."

With the rebound of the restructured car companies, Coherix has added twenty high-tech jobs in the past year. The company's chief technical officer, Doug Davidson, said, "It is certainly possible, without the bailout, a large number of automotive suppliers would have gone out of business, and we certainly would have been one of them."

A Republican who said he's never voted for a Democrat, Davidson said he can't vote for Romney, because the former governor opposed the auto industry bailout.

"I am looking for the manufacturing candidate, and Rick Santorum has talked more about manufacturing and making it more important in the United States than the other candidates," Davidson said.

Santorum, who like Romney was not in office at the time, also opposed the bailout of GM and Chrysler. But Santorum said this week Romney was inconsistent, because Romney supported the bailout of Wall Street firms and banks.

"My feeling was that...the government should not be involved in bailouts, period," Santorum said in a speech at the Detroit Economic Club on Thursday. Of the auto industry, Santorum added, "If we had just stayed out of it completely and let the market work, I believe the market would have worked."

  • Phil Hirschkorn

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