Fact Check: Artful swerves on auto bailout

President Obama shakes hands with Ford President and CEO Alan Mulally after announcing new fuel efficiency standards to curb auto emissions for US cars alongside leaders of worldwide automakers and members of his Cabinet in the Rose Garden of the White House in Washington on May 19, 2009.
SAUL LOEB/AFP/Getty Images

WASHINGTON - Michigan has become squirm central for Republican presidential candidates who are trying to explain their opposition to the auto bailout before the big primary in the home of automakers. Their tale is terribly tangled, and President Obama isn't telling it straight either.

Obama, in taking credit, and Republicans, in assigning blame, have ignored one driving force behind the love-it-or-hate-it bailout: George W. Bush in the waning days of his presidency. Moreover, GOP rivals Mitt Romney and Rick Santorum would have people believe the United Auto Workers union runs General Motors and the government "gave" it away, neither true.

The issue is a particularly nettlesome one for Romney, Detroit-born son of a Michigan governor and auto company chief executive. His provocatively headlined 2008 article, "Let Detroit Go Bankrupt," has made for tortured explanations in the campaign for the Feb. 28 primary - though the prescription he preached back then is not wholly at odds with what the government finally did.

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Then again, Romney is hardly out on a Republican limb. Santorum opposes the bailout on similar grounds. As for the other candidates, Newt Gingrich raised the wild idea that Washington might force people to buy GM cars, and Ron Paul believes the market should let companies rise or fall without the government's intervention.

A look at some of the persistent claims about the bailout and how they compare with the facts:

ROMNEY: "If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won't go overnight, but its demise will be virtually guaranteed." - Nov. 18, 2008, New York Times op-ed article.

SANTORUM: "If they'd have gone through the orderly bankruptcy process, gone through a structured bankruptcy, they'd have come out in the same place, only we would have kept the integrity of the bankruptcy process without the government putting its fingers into it." - June 13 New Hampshire debate.

THE FACTS: No one can know what would have happened absent the bailout. But it's a distinctly minority view that the private sector, raked then by the financial crisis, would have nursed Detroit back to health without a massive infusion of federal aid. In late 2008, banks weren't making many loans, much less to companies that were out of cash. The Bush administration moved fast because it saw no time to let an orderly bankruptcy unfold, even if banks had the money and the will to steer automakers through the process.

Romney's grim prognosis, before GM and Chrysler took the aid, is in stark contrast with the turnaround that followed. Last week GM reported a record profit for 2011, two years after the company's near-collapse, and said 47,500 union workers will get $7,000 profit-sharing checks, the most ever.

Despite the bold headline - now making headlines of its own - Romney laid out some nuanced ideas, including substantial federal aid.

He called for the government to guarantee post-bankruptcy financing and to back up warranties so people would not be afraid to buy cars from the fragile companies. And he proposed a fivefold increase in federal research spending on energy.

OBAMA: "On the day I took office, our auto industry was on the verge of collapse. Some even said we should let it die. With a million jobs at stake, I refused to let that happen. In exchange for help, we demanded responsibility. We got workers and automakers to settle their differences. We got the industry to retool and restructure. Today, General Motors is back on top as the world's No. 1 automaker. Chrysler has grown faster in the U.S. than any major car company. Ford is investing billions in U.S. plants and factories. And together, the entire industry added nearly 160,000 jobs. We bet on American workers. We bet on American ingenuity. And tonight, the American auto industry is back." - Jan. 24 State of the Union speech.

THE FACTS: Lost in Obama's victory lap was the fact that Bush passed him the baton.

Pushing against a reluctant Congress, Bush steered $17.4 billion in emergency loans to GM and Chrysler in his final weeks in office, on condition they shrink debt, negotiate wage and benefit cuts with workers and submit plans to achieve "long-term viability, international competitiveness and energy efficiency."